Thursday October 17 2019, Weekly News Digest

LendingClub

News Comments Today’s main news: Zopa launches tool to compete with credit bureaus. KBRA assigns preliminary ratings to Marlette Funding Trust 2019-4. OnDeck Capital financial results. ID Finance raises 1.7M euro on Crowdcube in minutes. Canada’s fintech adoption rate has doubled since 2017. Today’s main analysis: LendingClub account performance (A MUST-READ). LendingTree’s Personal Loan Offers Report […]

The post Thursday October 17 2019, Weekly News Digest appeared first on Lending Times.

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News Comments

United States

United Kingdom

European Union

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News Summary

United States

KBRA Assigns Preliminary Ratings to Marlette Funding Trust 2019-4 (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Marlette Funding Trust 2019-4 (MFT 2019-4). This is a $326.27 million consumer loan ABS transaction.

Preliminary Ratings Assigned: Marlette Funding Trust 2019-4

Class

Preliminary Rating

Initial Class Principal

A

AA (sf)

$260,298,000

B

A (sf)

$30,117,000

C

BBB- (sf)

$35,854,000

On Deck Capital Inc. Financial Results Comparing With Consumer Portfolio Services Inc. (Mesa Weekly), Rated: AAA

On Deck Capital Inc.’s volatility measures that it’s 85.00% more volatile than S&P 500 due to its 1.85 beta. Consumer Portfolio Services Inc. on the other hand, has 1.53 beta which makes it 53.00% more volatile compared to S&P 500.

Earnings & Valuation

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
On Deck Capital Inc. 3 0.12 45.93M 0.45 7.99
Consumer Portfolio Services Inc. 4 0.55 13.97M 0.50 7.37

Profitability

Net Margins Return on Equity Return on Assets
On Deck Capital Inc. 1,349,850,114.62% 12.2% 3.1%
Consumer Portfolio Services Inc. 396,042,410.84% 7.6% 0.6%

Global cooling; Upgrade Card (PeerIQ), Rated: AAA

In industry news, Upgrade led by CEO Renaud Laplanche released the “Upgrade Card”. The product is a cross between credit card and an installment loan. How does it work? Every month any new charges on the card transition into an installment loan of 12, 24, or 36 months. Customers can select the default payback period when applying for the card and they have the option to change the term for new charges at any time. Upgrade Card offers true risk-based pricing with a range of 6.49% to 29.99%. LendIt Co-Founder Peter Renton has a nice summary here.

In macro news, the Fed is expected to cut rates for a third time later this month to a range of 1.5% to 1.75%.

Source: OECD Interim Outlook Projections, Blackstone, PeerIQ
Source: WSJ, Cantor Fitzgerald, PeerIQ

New LendingClub Account Performance (Lend Academy), Rated: AAA

In April 2018, LendingClub provided us with $5,000 to open a brand new account. Since then we have been chronicling the status of the account on a quarterly basis. Below are links to the full series of blog posts in chronological order:

Source: Lend Academy
Source: Lend Academy

Personal Loan Offers Report – September 2019 (LendingTree), Rated: AAA

At 1,270 basis points, the spread between the highest and lowest offered APRs offered to the same consumers were especially stark for high-score borrowers.

  • The average spread for those with scores of 760 or higher was 1,270 basis points, amounting to a difference of 58.5% on the average loan amount offered for a three-year personal loan.
  • Consumers with scores between 720 and 759 saw an average offer spread of 1,145 basis points, representing a 49.9% difference in interest paid.
  • For those with scores between 680 and 719, the average spread was 971 basis points, representing a 37.3% difference in interest paid.
  • Borrowers with scores between 640 and 679 had an average spread of 860 basis points, representing a 28.2% difference in interest paid over the three years of the loan.
Source: LendingTree

Kiva Lending Team: Lendio Gives (Kiva), Rated: A

Lendio has provided over 10,000 Kiva microloans through its

Source: Kiva

There’s Never Been a Better Time to Consolidate Credit Card Debt (Credible), Rated: AAA

According to data collected by the Federal Reserve, borrowers who were assessed interest on their credit card accounts paid 16.97% on average during the three-month period ending Sept. 31. But the average rate on personal loans was only 10.07%.

That’s a spread of 6.9 percentage points — an all-time high in Federal Reserve records dating back to 1998.

Apple and Goldman Sachs aren’t reporting Apple Card information to credit bureaus (MarketWatch), Rated: A

Apple and Goldman Sachs have yet to start reporting consumers’ payment information for the Apple Card to the major credit bureaus, a source close to Goldman Sachs confirmed to MarketWatch on Monday. The source later said that the companies will begin reporting to the credit bureaus later this quarter.

Goldman Sachs CEO says Apple Card is the most successful credit card launch ever (CNBC), Rated: B

“In three short years, we have raised $55 billion in deposits on the Marcus platform, generated $5 billion in loans, and built a new credit-card platform and launched Apple Card,” Solomon said, adding “which we believe is the most successful credit card launch ever.”

Rise of fintech weakens law to prevent lending discrimination (Roll Call), Rated: AAA

As online banking threatens to make in-person banking at brick-and-mortar branches as archaic as video rental stores, it may do the same to a 1977 law created to counteract decades of underinvestment in minority neighborhoods.

Fewer branches, more online

While that includes some wholesale banks or limited purpose institutions, like credit card banks, online banking is driving the sector’s growth.

At the same time, the number of bank branches with an obligation under the CRA to provide loans and other services is falling. Branches have declined every year since a peak in 2010, at 99,550, according to data from the Federal Deposit Insurance Corporation. Banks closed 1,700 branches in 2018, dropping the total number to 86,375.

After steadily rising to a peak of $505 billion in 2016, the number of CRA-compliant loans that banks issued dropped in 2017 to $482 billion, according to the Office of the Comptroller of the Currency.

CNB Bank Moves to Revolutionize its Retail Lending with nCino (PR Newswire), Rated: A

nCino, the worldwide leader in cloud banking, today announced that Pennsylvania-based CNB Bank will utilize nCino’s Bank Operating System to digitize its retail lending process from end-to-end to enrich the customer experience.

California has reformed consumer loan interest rates. But will lenders find loopholes? (Cal Matters), Rated: A

Gov. Gavin Newsom has signed into law Assembly Bill 539 by Assemblywoman Monique Limón, Santa Barbara Democrat. The measure sets an annual interest rate cap of roughly 36% on consumer loans from $2,500 to $10,000 made by non-bank lenders.

For the prior 34 years, under state law, the sky was the limit on rates charged for such loans. Last year, 333,416 non-bank consumer loans in the $2,500 to $10,000 range had annual percentage rates of 100% or higher. That represented 40.7% of such loans. In the $2,500-$4,999 range, the triple-digit APR ratio was 55.5%.

DrawBridge Lending CEO Discusses Risk and Compliance for Lending Capital to Bitcoin Holders (Crowdfund Insider), Rated: A

Earlier this month, DrawBridge Lending (DBL Digital), a digital asset lending, borrowing and investment management firm, partnered with Kingdom Trust, a qualified custodian providing a self-directed IRA incorporating several digital assets with property and traditional asset investments.

To be eligible to invest, investors must be eligible contract participants (ECPs), which means they should have a minimum net worth of $1 million. The minimum investment in Drawbridge Lending’s series fund is $1 million, which can be met with the contributions of multiple investors.

There are more than 600,000 millennial millionaires in the US, according to report (CNBC), Rated: A

There are 618,000 millennial millionaires in the U.S. and their wealth is only expected to grow.

Currently, 93% of millennial millionaires have a net wealth between approximately $1 million and $2.5 million, according to the report. Nearly 60% live in either California or New York and they are investing more in real estate than their elder-millionaire counterparts.

The Pros and Cons of Using Peer-to-Peer Lending When Investing in Real Estate (The Motley Fool), Rated: A

Today’s real estate investors have many financing options at their disposal. There are traditional options like government-backed loans, home equity lines of credit (HELOCs), and investment property mortgages. But on top of those, you also have new-age choices like crowdfunding and peer-to-peer (P2P) lending platforms.

Real Estate Earnings: What To Watch For This Quarter (Seeking Alpha), Rated: A

The “REIT Rejuvenation” of 2019 has restored the coveted NAV premium for most sectors, giving these REITs the currency to re-open the acquisition pipeline. This valuation premium has allowed REITs to kick-start external growth, which has historically been responsible for more than half of FFO per share growth across the REIT sector. REITs were net buyers again in 2Q19, buying $12.5 billion in assets while disposing of $6.6 billion. The $5.9 billion in net acquisitions was the largest quarterly “buy” since 4Q17, and we expect this trend to continue into 2020 given the favorable valuation environment. We break down the acquisition activity for each of the REIT sectors later in this report.

Source: Seeking Alpha

AMERICAN FINANCIAL RESOURCES AND FINICITY PARTNER TO SIMPLIFY THE MORTGAGE EXPERIENCE (Finicity), Rated: B

American Financial Resources, Inc. (AFR) announced today it is working together with Finicity—a provider of real-time financial data access and insights, to provide its business partners and their borrowers with a faster, simpler and more secure way to verify assets and income while originating loans.

Roofstock Accelerates Innovation with New Chief Product Officer at the Helm (Yahoo! Finance), Rated: B

Roofstock, the marketplace for investing in real estate, announced the addition of Ketan Babaria to the fintech’s leadership team as Chief Product Officer. Formerly the Head of Product for LifeLock and Capital One’s D3 incubation unit, Babaria will enhance Roofstock’s current offerings and introduce new, creative ideas to accelerate the fintech’s growth and make real estate investing radically accessible.

Director of Operations Joins Fintech Startup LenderClose (DS News), Rated: B

Des Moines fintech startup company LenderClose has welcomed Andrew Deignan as Director of Operations. Deignan will manage the Operations and Vendor Relationships group, ensuring LenderClose delivers the highest level of service to its credit union and community bank lender users.

United Kingdom

Zopa launches tool to dispel “mystery” of credit worthiness (AltFi), Rated: AAA

Zopa, the first ever peer-to-peer lending platform, is launching the tool, called Borrowing Power, as it says that lending decisions and credit worthiness have been “shrouded in mystery” for too long.

The tool, which is free of charge, works by giving Zopa customers a borrowing score between one and ten. Customers are shown why they are given the score and how they can help improve the score.

In the Spotlight with Mario Lupori, RateSetter (Financial Reporter), Rated: AAA

We spoke to Mario Lupori, chief investments officer at RateSetter, about whether there is more consolidation to come in the peer-to-peer market and whether forthcoming regulatory changes will hinder the sector.

Samsung.com partners with Klarna to offer pay later payment plans (IBS Intelligence), Rated: A

Samsung.com has partnered with payment provider Klarna in the UK to provide customers service to make purchases from its website and pay later. The customers will get a convenient and hassle-free way to pay later at Samsung.com.

Klarna: too good to be true for students? (Mancunion), Rated: A

Klarna is perfect in those situations, giving you a ‘try before you buy option’. You can get as many items as you wish, in as many sizes, returning all the items you don’t need before a penny leaves your bank account. There’s no waiting around for refunds to reach your depleted bank account – you only pay for what you actually keep.

Octopus Choice’s P2P loans now available within a SIPP (AltFi), Rated: A

The firm has announced that its P2P investment platform is now accessible within a SIPP wrapper.

Could banks become redundant in the future? (Finextra), Rated: A

P2P lending as it right now stands absolutely no chance in competing with traditional banking, as it requires a bit too much time from the lender’s side.

However, should technology such as Artificial Intelligence be successfully implemented on these platforms, it’s likely that P2P lending will occupy a large percentage of the financial market share.

Starling launches TV ad campaign after reaching 900,000 customers (AltFi), Rated: A

Today Starling Bank will premiere its first TV ad on ITV and Channel 4 during England’s UEFA Euro 2020 qualifier against Bulgaria, and Jamie’s Meat Free Meals.

Celsius Now Offers up to 10% Return on TrueUSD Lending Service (Finance Magnates), Rated: A

Celsius Network, a cryptocurrency lending and borrowing platform, has partnered with TrustToken, the team behind dollar-pegged TrueUSD (TUSD), to offer up to 10 percent interest on four new stablecoins.

Casa Italia to expand its restaurant in Liverpool following £650k loan from OakNorth Bank (Fintech Finance), Rated: B

China

PayPal wants to help Chinese online shoppers buy from overseas (Business Telegraph), Rated: AAA

By the end of this year, Chinese online shoppers will have a new way to buy things from abroad: PayPal.

Despite the tensions between Beijing and Washington, China’s central bank has allowed the US company to take a toehold in the country’s valuable payments market by buying a majority stake of Chinese payments group Gopay.

European Union

Barcelona-based fintech ID Finance secures €1.7 million within minutes on Crowdcube (EU-Startups), Rated: AAA

Barcelona–based ID Finance, a fintech that operates in Europe and Latin America, has raised over €1.7 million in crowdfunding within minutes of its campaign going live on Crowdcube, amidst strong demand from investors. The data science, credit scoring and digital finance company has a target of €2.3 million.

The company has a well established global team and over 3 million users, with over 40,000 new users joining each week. It is on track to double revenues this year to €90 million – up from €13 million in 2017 – and is targeting over €267 million in revenue by 2021, with the goal of becoming the number one digital lending platform in Hispanic and Latino markets.

Fintech exits have raked in €83bn since 2013 amid European funding boom (sifted), Rated: AAA

The sale of European fintechs via initial public offerings or acquisitions has pulled in €83bn over the past six years, according to a new report by Dealroom.co and Finch Capital. This is twice as much as the next biggest category, enterprise software, and highlights the scale of opportunity for investors as well as the growing maturity of the fintech market.

Some of the biggest exits were the €7.1bn flotation of Dutch payments company Adyen and the sale of Swedish start-up iZettle to Paypal for $2.2bn last year.

The same report also estimates that the continent’s remaining private fintechs have an “unrealised” value of €43bn combined, including companies such as N26 and Starling Bank.

Source: sifted
Source: sifted

Which P2P Lending Marketplaces in Europe Accept American Investors? (P2P-Banking), Rated: A

European p2p lending services are growing. And yields of 10+% are achievable on some of the platforms. This attracts international investors.

Here is an overview of 5 services (sorted aplphabetically) that do allow US investors.

Assetz Capital is a marketplace for UK SME and property development loans. The liquid ‘access’ products offer 4.1% to 5.75% interest.

Bondora is an Estonian p2p lending marketplace for consumer loans. The highly liquid Go&Grow product offer yields 6.75%. With other products higher yields of 10+% are achievable.

Estateguru is an Estonian marketplace for property loans. Typical interest rates are 10-12%.

Flender is an Irish marketplace for SME loans. Typical interest rates are around 10%.

Mintos is a Latvian p2p lending market place. A wide range of loan types is offered. The fairly liquid ‘Invest&Access’ product currently promotes around 8% rate. Yields of 10+% are possible with manual and autoinvest.

Europe’s top tech startups to know (sifted), Rated: A

Europe’s startup scene is often overshadowed by Silicon Valley, but the continent is gaining ground with more than 160 tech firms valued at over €1bn.

Klarna
Founded 2005 — Stockholm, Sweden — Unicorn

In 2019 it launched a new $460m fundraising round, giving the company a post-money valuation of $5.5bn and making it the highest-valued private fintech company in Europe. That was a 250% increase on its last valuation at the beginning of the year.

Starling Bank
Founded 2014 – London, UK – Rising Star & Female Led

Led by Anne Boden, Starling has made a dent in the UK’s thriving fintech ecosystem. As of August 2019 the bank has just shy of 800,000 customers, including around 60,000 business accounts. The company says it’s on track to pass a million this year and already has £1bn in deposits.

These numbers are not quite as impressive as Monzo, which boasts 3m customers, or Germany’s N26 with 3.5m.

Greensill
Founded 2011 — London, UK — Unicorn

Former British Prime Minister David Cameron is an advisor to the firm, which is backed by Softbank’s vision fund. The most recent funding round of $800m valued the company at $3.5bn — firm unicorn territory.

Its working finance solution is funded through issuing its own bonds, making it one of the largest bond issuers of the world, with an average of 47 bonds a day.

Nigerian SME Digital Lender Lidya Expands to Europe (Forbes), Rated: A

In an increasing trend where African technology companies are finding a global audience, Nigerian digital SME lending platform Lidya has expanded to Poland and the Czech Republic.

International

London-based finance platform Divido inks deal with US payment company Splitit offering point-of-sale finance (AltFi), Rated: A

Divido, the London-based consumer finance platform which lets consumers take out credit at the point of purchase to help spread the cost of purchases, has signed a deal with US payment company Splitit to offer a monthly instalment option to customers.

4+ INTERNET BANKING OPTIONS FOR GAMING (One Vale Fan), Rated: B

Klarna has become famous among the players in many countries since its creation in 2005. This virtual bank is seductive for its fast transactions and its privacy. The gamblers will remain anonymous when they deposit or withdraw funds utilizing Klarna as a method. In fact, this Swedish company does not ask any personal details or private information. What’s more, Klarna is also an excellent service to the mobile casino allowing the users to move funds at their convenience.

India

How Can Neobanks Potentially Transform SME Lending? (Inc42), Rated: AAA

Neobanking is a relatively newer concept in India as compared to the West, and is still on a take-off mode. However, market experts observe the gradual and steady adoption of Neobanks and credit their fast growth to its lender and SME-friendly characteristics.

IN CONVERSATION WITH CRIF’S ATRIDEB BASU & HOW HE SCALED DATA & ANALYTICS PRACTICE IN INDIA (Analytics India Mag), Rated: A

CRIF is an Italian company, based out of Bologna and caters to more than 6K banks and financial institutions across 30+ countries globally. In India, CRIF has two broad arms – one is the 100% subsidiary (called CRIF Solutions India) – which focuses on consulting, analytics and products and the other is the credit bureau where it has major ownership (CRIF Highmark) – which focuses on multiple services on retail and commercial side.

Asia

Investors Pour Record $ 735 Million Into Singapore Fintech Deals (Bloomberg), Rated: AAA

Investors poured a record $735 million into financial-technology ventures in Singapore in the first nine months of this year, according to research from Accenture Plc, which analyzed data from CB Insights, Pitchbook and Tracxn.

That’s up 69% from the same period a year earlier and exceeds the $642 million raised in all of 2018, the study found. Investments in payments startups and those in lending made up the bulk of fintech fundraising, accounting for 34% and 20% of the total, respectively. Insurance technology deals comprised 17%.

MENA

Region’s P2P lending platform Beehive funds first SME in Bahrain (Statup MGZN), Rated: A

Beehive, the region’s first regulated peer-to-peer lending platform announces that it has funded its first SME in Bahrain.

The funding was granted to Bahrain-based Mira Packaging Factory, which manufactures disposable cups in addition to other food packaging solutions for the GCC, and the African F&B industry.

Canada

FinTech adoption in Canada has increased from 18% to 50% since 2017, according to the EY Global FinTech Adoption Index 2019. Among the reasons driving consumers to FinTech services are better rates and fees (42%), ease of setting up an account (19%) and more innovative products and services (10%).

Authors:

George Popescu
Allen Taylor

The post Thursday October 17 2019, Weekly News Digest appeared first on Lending Times.

Thursday July 6 2019, Weekly News Digest

PayPal

News Comments Today’s main news: 3 top execs exit SoFi. Zopa proclaims end of monogamous banking. LendInvest earnings hit the roof. Financial Conduct Authority sets new rules for UK P2P lending. Quarter of global small firms are significant fintech users. Biz2Credit raises $52M. Today’s main analysis: Alternative lenders steal business from banks. P2P lending will be […]

The post Thursday July 6 2019, Weekly News Digest appeared first on Lending Times.

PayPal

News Comments

United States

United Kingdom

China/Hong Kong

International

Other

News Summary

United States

SoFi Loses Three Top Executives (WSJ), Rated: AAA

Three top executives of Social Finance Inc. are leaving the financial-tech startup in the coming weeks, adding to the challenges the company faces as it moves through a tough environment for online lenders.

Marketing chief Joanne Bradford, head of risk Kevin Moss and Ashish Jain, the lender’s top capital markets executive, recently told Chief Executive Anthony Noto about their plans to step down from their roles. All three had been at the company prior to Mr. Noto taking the reins in early 2018.

Tech Driving Bank Earnings Growth (PeerIQ), Rated: AAA

US first quarter GDP growth was revised lower to 3.1%. There is fear that the economy is slowing due to the ongoing trade war and the length of this economic expansion. The 3 month-10 year yield curve fell to its most inverted since 2007 to -12.3 bps. Recessions have usually followed within 18 months of this curve inverting. The market is looking to the Fed to bolster economic growth with the odds of a rate cut at the September meeting now at 54%.

Source: CME, PeerIQ

Technology Driving Earnings Growth

Banks and lenders are reaping the benefits of their technology investments now. Banks like Citi have been able to offer new products and grow their deposit base, while Capital One has improved its efficiency ratio by 400 bps. Banks and lenders continue to make large technology investments for faster growth at lower cost.

Alternative Lenders Continue to Steal Business From Banks (The Financial Brand), Rated: AAA

What is less well known is the rapid growth of PayPal as a digital lending alternative. It may be time for banks and credit unions to wake up, however, as the company announced that they had crossed $10 billion in small business lending in only 5 years.

Amazon Joins PayPal as Top 5 Small Business Digital Lender

Amazon has joined PayPal, OnDeck, Kabbage, and Square as a top 5 digital small business lender. In fact, Amazon revealed that it had made more than $1 billion in small business loans to US-based merchants in 2018.

The peer-to-peer business lender, Funding Circle, also revealed its first-quarter trading update, showing that loans under management rose by 44% compared to the first quarter of 2018, while originations grew by 23% (they have originated $9.5 billion in loans).

Consumer Financial Protection Bureau Releases Rules for Comprehensive Reform of Debt Collection Industry (Debevoise & Plimpton), Rated: AAA

On May 7, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) released a Notice of Proposed Rulemaking (“NPRM” or “Notice”) to increase regulation of the debt collection industry.1 The much-anticipated Notice is the outgrowth of the CFPB’s 2016 Outline of Proposals (the “Outline” or the “2016 Outline”), which was a cornerstone of the Obama Administration’s efforts to protect consumers and overhaul all aspects of consumer finance (see our August 10, 2016 client alert on the Outline here). One presidential election and two CFPB Directors later, CFPB Director Kathleen Kraninger announced a more limited plan to put in place substantial protections, but which rejects some of the 2016 Outline’s more ambitious proposals. The NPRM would overhaul the industry by, for example, requiring that debt collectors make no more than seven attempts by telephone per week to reach consumers about specific debts, and allow debtors to opt out of allowing collectors to contact them via e-mail, text messages, or other media. However, the proposal fails to address many of the Outline’s calls for increased regulation of substantiation of debt, decedent debt, and transfer of information to subsequent collectors (among other things).

See the full report here.

Biz2Credit Raises $ 52M In Funding To Expand (PYMNTS), Rated: AAA

Biz2Credit, the online lending platform that helps banks and other financial institutions manage small and medium-sized business (SMB) lending processes, announced Tuesday (June 4) that it raised $52 million in venture funding.

Biz2Credit said the Series B funding round was led by WestBridge Capital.

Jared Kaplan of OppLoans (Lend Academy), Rated: A

The next guest on the Lend Academy Podcast is Jared Kaplan, the CEO of OppLoans.

Lighter Capital Introduces Suite of Alternative Financing Solutions to Fund More Startups up to $ 3 Million (Yahoo! Finance), Rated: A

Lighter Capital announced today that it has launched new financing products to better match the capital needs of growing startups. To date, Lighter Capital has provided over $150 million in more than 500 rounds of financing to over 300 startups. The company has historically provided Revenue-Based Financing and has now broadened its portfolio to include lines of credit and term loans, designed to provide startups capital over time as they need it. Unlike most venture debt, startups do not need to have raised Venture Capital to qualify for funding.

1. Lighter Line of Credit – Startups have fluctuations in capital needs, to make essential payments like payroll or wait for a big customer payment. The Lighter Line of Credit is a revolving working capital line. It enables startups to draw and return capital numerous times, to even out their cash needs.

2. Lighter Term Loan – Provides startups growth capital in a traditional structure with predictable payments. Lighter Capital will also make forward commitments, giving startups the right to get additional capital for a period of time. For example, a startup could get a $500,000 loan today and a commitment from Lighter Capital to provide an additional $500,000 over the following six months.

LendPro Unveils Dynamic Routing Capability to Streamline POS Financing (LendPro Email), Rated: A

LendPro LLC, a provider of Lending-As-A-Service (LaaS) products and platforms for retailers, today unveiled Dynamic Routing —an innovative POS financing solution that automatically matches consumer credit applications with the best-available lending option.

While alternative lending software moves credit applications through a pre-defined, inflexible process, Dynamic Routing by LendPro dynamically guides borrower application data to lenders in the merchant’s financing portfolio based on the attributes of the sale. For example, if the total price for a specific purchase is too large (or small) for a lender’s target loan size, LendPro’s Dynamic Routing system can route the applicant to a different lender. This technological innovation saves time, increases simplicity, and may help the borrower avoid an unwanted credit application.

Why it’s Time to Ask Your Wealth Manager About P2P Lending (Crowdfund Insider), Rated: A

Using a crowdfunding platform, however, 5,000 individuals might each invest $1,000 into the company. Each of those individual investors is exposed to a very small amount of risk, and the company is able to raise the funds without surrendering ownership.

Possible Finance lands $ 10.5 million to provide consumers softer, kinder short-term loans (TechCrunch), Rated: A

It’s one reason that venture capitalist Rebecca Lynn, a managing partner with Canvas Ventures  and an early investor in the online lending company LendingClub, has largely steered clear of the numerous startups crowding into the industry in recent years. It’s also why she just led a $10.5 million investment in Possible Finance, a two-year-old, Seattle-based outfit that’s doing what she “thought was impossible,” she says. The startup is “helping people on the lower end of the credit spectrum improve their financial outlook without being predatory.”

Santa Clarita Ranked Second Highest ‘Debt-Ridden’ City In California (Home Town Station), Rated: A

LendingTree, an online loan marketplace, released a report this week detailing the accrued debt of all California cities with a population of at least 50,000.

Santa Clarita ranked the second highest in auto loan debt with an average of about $21,000, and second in the state for personal loan debt, excluding mortgages, with an average of just over $6,000.

Source: Home Town Station

Cities With the Highest Percentage of Black Homeowners (Black Enterprise), Rated: A

Even though housing discrimination has been outlawed for 50 years, studies show that the U.S. black homeownership rate isn’t any higher than when the Fair Housing Act initially passed in 1968. In fact, the racial gap between white and black homeowners today is significant. According to the U.S. Census Bureau, the homeownership rate among white Americans is 73.2%, while the black homeownership rate stands at 41.1%. In comparison, 42% of black households owned their homes back in 1970, two years after housing discrimination based on race, color, religion, and national origin was outlawed.

According to the report, the U.S. cities that have the highest percentage of black homeowners are San Jose, Los Angeles, Salt Lake City, San Antonio, and Portland. On the other hand, the cities where black homeownership is lowest relative to overall population are Memphis, New Orleans, Baltimore, Virginia Beach, and Milwaukee, where the median household income for black residents is a mere $28,928.

See LendingTree’s report here.

Real Crowd Says HNW Investors Poised to Boost Real Estate Investments in 2019 (Crowdfund Insider), Rated: A

Real estate crowdfunding platform RealCrowd reports that High Net Worth (HNW) investors are looking to increase their portfolio of real estate investments during 2019. According to a survey by the Fintech platform, 53% of surveyed HNW individuals expect to make “two-to-four direct real estate investments in 2019.” Specific details on the survey process were not revealed.

This is a big improvement over year prior when just 33% planned to do the same thus an increase of around 20%.

The survey also stated that 47% of respondents’ desire to allocate more than 25 percent of their investment portfolio to commercial real estate.

WealthStone – Democratizing Access to Commercial Real Estate (PR Newswire), Rated: A

WealthStone LLC announces the launch of its new website, WealthStoneLLC.com, where technology brings increased access to institutional-quality commercial real estate investments to a wider audience, while delivering the best customer experience possible for its growing global investor base.

3 Investments That Lead to Passive Income (Realty Biz News), Rated: B

Peer-to-peer lending is a relative newcomer to the world of investments. Lending Club and Prosper were the first institutions to offer P2P loans beginning in mid-2000, and they’ve changed the way countless loans are handled. Instead of going to the bank, borrowers apply for loans from other people. People who have been denied loans from financial institutions are often approved for P2P loans at rates that are lower than those of larger financial institutions.

Sagent Lending Technologies to Transform the Lending Experience, Powered by Microsoft Azure (BusinessWire), Rated: A

Sagent Lending Technologies announced today a strategic initiative to transform the borrower and the lender experience through Microsoft Azure. Sagent will leverage the potential of artificial intelligence, machine learning, data science, and cognitive services available on Azure that will provide a reimagined experience for Sagent clients and their consumer borrowers.

BofA, Longtime Leader in Leveraged Loans, Warns of `Carnage’ (Bloomberg), Rated: A

The U.S. economy is on solid footing except for one potential trouble spot, according to Bank of America Corp.’sChief Executive Officer Brian Moynihan: leveraged loans — a business the bank has dominated for a decade.

Bank of America was bookrunner on some $317 billion of leveraged loans this year, accounting for 10.8 percent of the market share, the Bloomberg data show, which captures all leveraged term loans and revolver facilities that are either new or have been amended.

Moody’s Investors Service said covenant quality for 2018’s last quarter was close to a record low, and the rating company sees no signs of improvement this year. Federal Reserve Chairman Jerome Powell said last month that the market looks a lot like the mortgage industry in the run-up to the subprime crisis.

Digital Banks Look to Attract Older Generations (LendIt), Rated: A

One of the challenges for the challenger banks like Monzo, Starling and Revolut is to go beyond the young demographic they’ve been successful at attracting to their products; not surprisingly, less than 5% of Monzo’s customers over 60; as more bank branch close they are looking to bring in older customers who are no longer being served by traditional banks; Monzo and Starling have both added the ability to make cash deposits; Starling recently partnered with the post office and Monzo partnered with a payments service which is in 30,000 shops in the UK; these digital banks and their competitors are experimenting in how they can have more physical points of contact with customers; Revolut recently shared a plain English customer contract in a move to help their customers better understand the product.

The tech banks are using to boost deposit growth (American Banker), Rated: A

First Arkansas & Trust, for example, is using Plinqit, a goal-oriented savings app from a fintech called HTMA Holdings, in the hopes of boosting deposits.

And some banks have begun to specialize in the banking-as-a-service model to increase deposits.

Following is a look at how regional and community banks are employing tech to help in the race for deposit growth:

Wharton just released an online fintech course for the masses (Technical.ly), Rated: A

On Thursday, the University of Pennsylvania’s Wharton Online announced its new virtual fintech specialization program, “FinTech: Foundations and Applications of Financial Technologies,” for students and professionals who want to learn about the rapidly changing tech.

The four-course financial program is available via online education platform Coursera, and will detail the use of cryptocurrency, robo-advising, crowdfunding and modern investing.

BlueVine Appoints Silicon Valley Veteran Herman Man to Chief Product Officer (BlueVine), Rated: B

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced today that it has named Silicon Valley technology and engineering veteran, Herman Man, its Chief Product Officer. In this role, Man will focus on developing the next generation of BlueVine products and oversee the company’s product vision, strategy, design and execution to deliver on its mission to provide fast, fair and easy financing solutions every small business needs to thrive.

Lendio Announces New Senior Vice President of Lender & Partner Strategy (Lendio), Rated: B

Lendio announced today that Denada Ramnishta has been promoted to Senior Vice President of Lender & Partner Strategy.

Thomas M. Affolter Joins White Oak as Managing Director to Bolster Origination Efforts (Yahoo! Finance), Rated: B

White Oak Global Advisors, LLC (White Oak) is pleased to announce that Thomas (Tom) M. Affolter has joined White Oak as a Managing Director based in Chicago. Mr. Affolter will focus on originating new investment opportunities and expanding the coverage network for White Oak’s private debt funds.

United Kingdom

Zopa says fintech revolution has killed off monogamous banking (P2P Finance News), Rated: AAA

ZOPA has declared that “monogamous banking is a thing of the past”, as new research reveals that the average UK adult has a relationship with seven different financial providers.

The peer-to-peer consumer lender, which is launching a digital bank, said that the fintech revolution has changed the shape of financial services for consumers.

It cited a survey that found 71 per cent of UK adults said they do not need a relationship with their main bank, while two thirds are actively using products from banks and financial providers other than their main current account provider.

LendInvest earnings soar as it looks to disrupt ‘slow moving’ banks (P2P Finance News), Rated: AAA

ONLINE property lender LendInvest has reported an 82 per cent jump in core earnings, as it looks to disrupt the UK mortgage market.

LendInvest, which used to be a peer-to-peer lender before it shut its platform to retail investors, posted core earnings of £4m for the year ended 31 March 2019, up from £2.2m the previous year.

The firm, which is considering a stock market flotation, said that platform assets rose by 69 per cent to £788.3m over the same period, while revenue rose by 36 per cent to £72.7m.

FCA Announces New Rules For UK P2P Lending Platforms (Lend Academy), Rated: AAA

The long awaited changes to P2P lending regulations in the UK are finally here. Today, the Financial Conduct Authority (FCA) announced that the new rules for peer to peer lending platforms have been set and will come into effect on December 9, 2019.

  • Introducing more explicit requirements to clarify what governance arrangements, systems and controls platforms need to have in place to support the outcomes they advertise. These new rules focus particularly on credit risk assessment, risk management and fair valuation practices, especially for platforms with more complex business models.
  • Strengthening rules on plans for the wind-down of P2P platforms.
  • Applying marketing restrictions to P2P platforms, designed to protect new or less experienced investors. We have also clarified the practical implication of these new rules as they apply to P2P agreements.
  • Introducing a requirement that an appropriateness assessment (to assess an investor’s knowledge and experience of P2P investments) be undertaken, where no advice has been given to the investor. We have also provided guidance on what the assessment should include.
  • Setting out the minimum information that P2P platforms need to provide to investors

Assetz Capital hits bridging loans and small business lending milestones (AltFi), Rated: A

Peer-to-peer lender Assetz Capital said it has hit a double milestone, providing over £100m in bridging loans and a further £50m in small business funding, “as the appetite for alternative forms of finance continues to rise across the UK”.

The Manchester-based fintech adds that since it was founded six years ago it has lent over £780m to small firms and property developers, helping build 3,700 homes in Britain.

UK P2P sector poised for “significant further growth” (P2P Finance News), Rated: A

THE UK’S peer-to-peer lending sector is set to experience “significant further growth”, according to Standard & Poor’s.

A report released by the ratings agency this week said that the growing involvement of institutional funds and increased securitisation issuance are set to boost the industry.

Santander and eBay team up on UK loans app (Techradar), Rated: A

In an effort to fend off tech giants and newer digital rivals, Santander and eBay have announced a new lending partnership for small businesses.

The Spanish bank will begin offering loans to over 200,000 small and medium-sized businesses that sell products on eBay in the UK through its financial technology app Astro.

As £165m Lendy collapses, experts warn ‘a dozen more peer-to-peer firms will follow’ (The Telegraph), Rated: A

While investments of varying risk are available, some platforms have tempted consumers with returns of more than 12pc on high-risk projects. But the collapse of one large platform, Lendy, which offered loans on property developments, has concerned investors across the sector.

Wagestream Says One Complaint Against PayDay Lenders is Resolved for Every Three Received (Crowdfund Insider), Rated: A

Payday loan alternative Wagestream has issued a release stating the Financial Ombudsman Service (FOS) has received 47,220 complaints against payday lenders since 2018. Yet while many complaints have been received only a fraction have been resolved. Wagestream states that only one out of three are resolved or just under 17,000.

Welendus unveils rebrand as Fund Ourselves (P2P Finance News), Rated: B

WELENDUS, the peer-to-peer payday lender, has rebranded as Fund Ourselves.

ARBUTHNOT SPECIALIST FINANCE CONCLUDES FIRST LOAN COMPLETION SINCE LAUNCHING THE BUSINESS (Arbuthnot Latham), Rated: B

Arbuthnot Specialist Finance (ASFL) is pleased to announce it has concluded its first loan completion since announcing its launch in late May. The deal is a 70% LTV residential product loan on a property located less than half a mile from the University of Central Lancashire campus in Preston.

China/Hong Kong

The Escalating US-China Trade War, Part 1 (In Homeland Security), Rated: AAA

China is in debt, significantly. Part of the problem is that it is difficult, if not impossible, to assign a figure to the debt. There are Chinese statistics for official debt, but following the 2008 economic crisis, China implemented new restrictions on lending. Over the past decade, those restrictions have shifted from one type of loan to another so Chinese citizens get creative with how they borrow money for business purposes or to purchase property.

Furthermore, the economic crisis took “shadow lending” to new heights. Shadow lending can include everything from organized crime to banks obfuscating the purpose of a loan or peer-to-peer lending. China cracked down on this lending practice too, but the debt amount is significant and official numbers do not typically include shadow lending.

New US Tariffs Spell Doomsday for China’s Economy (The Epoch Times), Rated: AAA

The additional 25 percent tariff imposed by the United States on $200 billion worth of Chinese goods will trigger a new round of factory closures in China, driving economic collapse.

In the context of the blow-up of the P2P (peer-to-peer lending) and other usury, the 8.4 trillion will cause most medium and small-sized banks to fall into bankruptcy crisis.

HSBC Rolls Out Digital Wallet To Hong Kong Businesses (PYMNTS), Rated: A

HSBC has reportedly expanded its PayMe digital wallet to startups and small businesses, marking its first foray into the business payments marketplace.

European Union

ING pushes for open banking with SME financing platform and Yolt expansion (Fintech Futures), Rated: A

ING is keen to maximise the possibilities of open banking and is working with Yolt and Funding Options on bringing new features to customers across Europe.

Firstly, ING is launching a marketplace for SME financing in the Netherlands, which will open to other external financing providers, becoming the first Dutch bank in doing so.

International

We are “very close” to peak fintech, with more than 10,000 startups jumping into the boom (Quartz), Rated: AAA

According to Curve’s Shachar Bialick, the founder and CEO, an app that lets customers to link all their credit and debit cards to just one card, says there are more than 10,000 fintech startups around the world, and even he can’t keep track of them all. Some, or even most, aren’t going to make it.

Quartz: It’s been about four months since Amex blocked Curve. What are your plans now?

Bialick: Amex was never a critical part of Curve. It was always an opportunity to solve a big problem Amex has in the UK and Europe, which is access.

Curve has continued to grow in Europe without Amex.

Have we reached the peak in terms of new fintech startups?

I don’t know if we reached the peak, but we definitely are very close, because today there are over 10,000 fintechs globally. I don’t know over 90% of them.

Peer To Peer Lending To Be The Next $ 1 Trillion Industry (ValueWalk), Rated: AAA

By eliminating the need for banks, peer to peer lending allows investors to invest in individual and company debt with 5-10% returns – a far cry from the the lowly 1.5% that you’ll received in a regular CD account.

And it works better for borrowers too. Borrowers are able to take out loans with greater ease and lower interest rates, typically offered in the region of 3-4%.

The average default rate at Lending Works is only 3.2% over the last six years. And many P2P lenders allow you to choose secured loans for additional protection.

Transparency Market Research estimates the industry be worth $900 billion by the end of 2024, with an annual growth rate of 48%, up from $26 billion in 2015.

Source: ValueWalk

One quarter of world’s small firms are ‘significant’ fintech users, says report (AltFi), Rated: AAA

Fintechs are becoming the ‘new normal’ in financial services, said a survey by professional services firm EY.

Fintech adoption is by far the highest in China, where 61 per cent of small businesses use their services, followed by the US, 23 per cent, the UK, 18 per cent, South Africa, 16 per cent, Mexico, 11 per cent, with the average set at 25 per cent.

Source: Ernst & Young

See the full report here.

Tencent, Temasek Invest $ 35 Million in U.K. Open-Banking Startup (Bloomberg), Rated: A

Chinese technology giant Tencent Holdings Ltd. and Singapore government-owned fund Temasek is to invest $35 million in London-based TrueLayer.

The Fintech Bubble Floats Toward a $ 64 Billion Pin (The Washington Post), Rated: A

Trendy U.S. online payments company Stripe, worth some $22.5 billion according to private-market valuations, is joining Amazon.com Inc. and Apple Inc. in warning about the impact of EU rules aimed at getting customers to double-check payments going out from their accounts.

Adyen trades at a gob-smacking 110 times this year’s earnings, with a market value of 20.8 billion euros. That’s almost twice the worth of Deutsche Bank AG, even though the Dutch fintech only employs the equivalent of 1% of the German lender’s staff. Stripe is the sixth most expensive private company in the world, according to researchers at CBInsights.

Australia

RBA Boss Warns Banks On Undermining The Economy (SB Dirty South Soccer), Rated: A

THE Reserve Bank of Australia (RBA) has cut the cash rate to a new record low.

The online lender announced a new headline variable rate for owner-occupiers at 3.34 percent.

Authors:

George Popescu
Allen Taylor

The post Thursday July 6 2019, Weekly News Digest appeared first on Lending Times.

Thursday March 7 2019, Weekly News Digest

chinese p2p lenders

News Comments Today’s main news: Funding Circle US small biz loan portfolio surpasses $2B. JPMorgan Chase to compete with Affirm, Klarna on POS financing. Funding Circle expands into Canada. Funding Circle financial highlights. Revolut fights new allegations. Dianrong lays off 2,000. Today’s main analysis: U.S. credit card debt hits record $870B IN 2018. International P2P lending volumes for February 2019. Today’s thought-provoking […]

The post Thursday March 7 2019, Weekly News Digest appeared first on Lending Times.

chinese p2p lenders

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Funding Circle US Small Business Loan Portfolio Surpasses Most Banks with $ 2 Billion Lent Through Platform (PR Newswire), Rated: AAA

Funding Circle, the global small business loans platform, today announced that investors have lent more than $2 billion through its platform to small businesses in the United States. With this milestone, Funding Circle now has more US small business loans outstanding than almost 98% of FDIC-insured banks1.

Funding Circle now has more than $1 billion of small business loans in its portfolio, which means that if it were a bank it would be among the 50 largest small business commercial & industrial loan portfolios in the United States, according to the latest FDIC data available1. However, unlike a bank, Funding Circle provides a single financial product. Its fully amortizing business loans, powered by sophisticated technology and proprietary credit models, enable business owners to access financing with speed and efficiency, allowing them to devote more time to delivering their product or service to the market and ultimately create more jobs and vitalize their communities.

JPMorgan Chase Enters A Hot Fintech Space: Point-Of-Sale (POS) Financing (Forbes), Rated: AAA

JPMorgan Chase announced that it is moving into the point-of-sale (POS) financing market.

POS financing certainly isn’t new. In 2016, merchants in nine different retail categories saw more than 160 million POS loan applications—only 53% of which were approved, however.

Source: Forbes

Filene Research Institute 

Source: CORNERSTONE ADVISORS

Shopping at Discount Stores Could Help Get You a Loan (WSJ), Rated: A

Discount-store shoppers may soon get an unexpected benefit: better odds when applying for personal loans from Discover Financial Services.

Discover, best known for its credit cards, plans to use artificial intelligence to assess hundreds of unusual characteristics about personal-loan applicants in an attempt to get its rising losses under control.

U.S. Credit Card Debt Closed 2018 at a Record $ 870 Billion (Bloomberg), Rated: AAA

U.S. credit card debt hit $870 billion — the largest amount ever — as of December 2018, according to the data from the Federal Reserve. Credit card balances rose by $26 billion from the prior quarter.

Source: New York Federal Reserve

Nearly 480 million credit cards are now in circulation — up by more than 100 million since hitting bottom after the recession a decade ago.

At the end of last year, credit cards were the fourth-largest portion of consumer debt in the U.S. after mortgage, student loan and auto debt. But the quarterly increase in credit card debt was faster than the other categories. Overall debt reached a record $13.5 trillion.

Source: New York Federal Reserve

LendingTree Compares Renting and Owning a Home in the 50 Largest Metropolitan Areas in the U.S. (LendingTree), Rated: AAA

Louisville, Milwaukee and Oklahoma City are the metros where median rents are cheapest when compared to median mortgages. In these areas, median rent costs are an average of $310 cheaper than median mortgage costs.

Source: LendingTree

Miami and Orlando, Fla.; and Virginia are the metros where rent payments are the most expensive when compared to mortgage payments. Median mortgage payments are an average of $215 cheaper than median rent payments in these metros.

Four of the top 10 metros where monthly rents are higher than monthly mortgage payments are in Florida. According to a recent housing study from Harvard University, low wages and too few rental units are key factors that have caused Florida’s rental affordability crisis to become the worst in the nation.

Source: LendingTree

‘Stop pitting misery against misery’: How TrueAccord is turning debt collections into a financial service (Tearsheet), Rated: AAA

Ohad Samet has spent his career working on lending analytics — first, at a firm called FraudSciences, which got bought by eBay. He ran analytics at Analyzd, which was acquired by Klarna. As the chief risk officer at the pay later lender, he became aware of how antiquated the debt collections industry was. Call centers, dialing for dollars, it just hadn’t kept pace with the front end of the business.

So, in 2013, he left and with two co-founders started TrueAccord, which is essentially a nearly-automated marketing and sales campaign for debt collection. Based on consumer data and data from the lender, it can determine who to call, what time to call, what communications channel — phone, text, email, chat — and what message to use. It purports to be a much better experience for consumers.

KBRA Assigns Preliminary Ratings to Kabbage Asset Securitization LLC, Series 2019-1 (BusinessWire), Rated: A

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes (the “Notes”) issued by Kabbage Asset Securitization LLC, Series 2019-1 (“Kabbage 2019-1”).

This transaction is Kabbage, Inc.’s (“Kabbage” or the “Company”) third securitization and it is expected that the proceeds of the sale of the Notes will be used to refinance the Company’s existing $610 million outstanding Kabbage Asset Securitization LLC Series 2017-1 Notes and provide extra funding capacity for Kabbage.

Notes Preliminary Rating Initial Principal Balance
Class A AA (sf) $421,221,000
Class B A (sf) $59,715,000
Class C BBB (sf) $69,348,000
Class D BB (sf) $35,316,000
Class E B (sf) $24,400,000

Peer to Peer Lending Platform Beehive Raises $ 4 Million (Crowdfund Insider), Rated: A

Beehive, a peer to peer lending platform servicing SMEs in the MENA region, has closed on $4 million Series B funding round, according to a release from the platform. This most recent funding brings the Fintech’s total raised to $15.5 million since platform launch.

Loan officers cast serious doubt on latest loanDepot, Chase mortgage promises (HousingWire), Rated: A

In recent LendingLife news, loanDepot announced its new digital mortgage, which it says can identify significant time and cost-savings for borrowers in seven minutes.

AI Foundry Unveils Next-Generation Artificial Intelligence Platform and Mortgage Automation Solution (PR Newswire), Rated: A

AI Foundry, an artificial intelligence (AI) platform company, today announced the launch of its next-generation Cognitive Business Automation Platform along with a new Agile Mortgages solution. This patent-pending technology incorporates the latest in AI, machine learning and machine vision to deliver a higher level of problem solving and decision making for enterprises. The new Agile Mortgages solution, which is built on top of the platform, automates manual, labor-intensive mortgage processes, enabling lenders to dramatically accelerate the lending lifecycle.

Could A Selfie Put An End To False Identities? (Forbes), Rated: A

Earlier this year, 

Auto Loan Statistics (LendingTree), Rated: A

Key facts

  • Americans originated a record 2.5 million auto loans in July 2018, the most recent month for which data is available.
  • Americans owed more than $1.14 trillion in auto loans as of September 2018, 23% more than 2013.
  • Outstanding auto loan balances are rising about 3.1% a year in dollar amounts.
  • Auto loans accounted for about 8% of outstanding consumer debt in 2018, including mortgages, about 2 percentage points higher than a decade earlier.
  • Gen Xers carry the highest auto loan balances with a median of $18,741 and are the most likely of other age groups to have a car loan.
  • The average new car loan originated by a finance company is $29,921.27, an increase of more than $5,000 from 10 years earlier.
  • Average monthly payments are rising, too:
    • $530 for new vehicles, up 5% year over year
    • $381 for used vehicles, up 4%
    • $430 for a new vehicle lease, up 4%

For many Americans, car loans are their largest debt burden, a weight which threatens to become overwhelming as they stretch loan terms to buy increasingly expensive vehicles — new and used. To get the full picture of auto loan debt in the U.S., we looked at auto loan originations, prices and term lengths. Here are the numbers.

Online bank Chime now valued at $ 1.5 billion after new funding round (CNBC), Rated: A

Digital bank Chime has tripled its valuation, officially passing the $1 billion-mark this week.

The San Francisco-based company announced a $200 million Series D financing round that brings its new valuation to $1.5 billion. Investors were led by DST Global, which also participated in earlier fundraising rounds, and new investors Coatue, General Atlantic, Iconiq Capital and Dragoneer Investment Group, Chime said Tuesday.

Jason Gross of Petal (Lend Academy), Rated: A

In this podcast you will learn:

  • The personal experience that led to the founding of Petal.
  • Their core product and how it is different to what else is out there.
  • A profile of their typical customer.
  • How they are approaching underwriting.
  • The typical APRs and credit limits they offer on their card.
  • How they are protecting their company against fraud.
  • How Petal is getting the word out about their credit card.
  • The large waiting list they had when they launched last year.
  • The early signals they are seeing with credit performance.
  • How they are generating income.
  • The primary funding sources they use in providing the credit lines.
  • What they mean on their website when they say “a credit card with a conscience”.
  • Their biggest challenge as they grow their company today.
  • The goals the Petal team has for 2019.

FINRA Approves Circle’s Acquisition of SeedInvest, Continues Mission of Tokenization (Crowdfund Insider), Rated: A

FINRA has given their stamp of approval to the acquisition of SeedInvest by Circle. The crypto focused company announced the purchase of SeedInvest in October of 2018.  The acquisition of a regulated securities crowdfunding platform by the blockchain based Circle represented a seminal turning point in the crypto industry.

Virginians say online lender uses tribal immunity to get around state laws (Pilot Online), Rated: A

Virginians are taking a lead attacking what they say is a legal loophole that has left thousands of people stuck with debt they can’t escape.

The case involves loans at interest rates approaching 650 percent from an online lender, Big Picture Loans, associated with a small Indian tribe on Michigan’s Upper Peninsula.

Lula Williams of Richmond, the lead plaintiff in one case, still owes $1,100 on the $1,600 she borrowed from Big Picture Loans — debt that she’s already paid $1,930 to retire. One of her loan documents reports the annual percentage rate for her debt at 649.8 percent, calling for her to pay $6,200 on an $800 debt. Her first three installments on that loan, each for $400, would have yielded Big Picture a 50 percent profit on the loan after just three months, court records suggest.

How to Invest in Real Estate without Buying Property (Realty Biz News), Rated: B

Lastly if you love jumping on the latest trends, then jumping on one of these companies services that how recently cropped up will help you get involved in real estate investing. You are able to invest in commercial and residential real estate investments and receive cash flow distributions in return, and just like the other options on this list, someone else is doing the heavy lifting whilst you reap the rewards.

Whilst there is no one standout company that we can confidently recommend, since they all havent been around long enough for us to make a property judgement, Fundrise returned an average of 11.4% on the invested dollars in 2017 and a further 9.11% in 2019.

The best part is you don’t even need to be an accredited investor to open an account, meaning if you’re new to the market, then this is your chance to get in on something thats shiny and new and that could potentially give you a place to invest your cash and reap the rewards of owning physical property.

Elevate Appoints Kathleen Vanderkolk as Head of Enterprise Risk Management (BusinessWire), Rated: B

Elevate Credit, Inc. (NYSE: ELVT) (“Elevate” or the “Company”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that it has promoted Kathleen Vanderkolk to Chief Risk Officer.

Vemanti Group Engages With Securitize And DSLG To Launch Digital Security Offering For eLoan, JSC (GlobeNewswire), Rated: B

Vemanti Group, Inc. (OTC PINK:VMNT), a technology-driven holding company, today announced that it has engaged with Securitize, Inc. (“Securitize”) and Digital Securities Law Group (“DSLG”) to launch a Digital Security Offering (“DSO”) to fund and propel the business objectives for eLoan, JSC (“eLoan”), its portfolio company. The Company recently announced that it has completed its investment in eLoan, a fintech company based in Vietnam.

The offering will be conducted by the Company on behalf of Fvndit, Inc. (“Fvndit” – formerly Directus Holdings, Inc.), eLoan’s US-based parent company, as the issuer. The issuance will be managed by Securitize’s platform and DS Protocol. Details of the offering will be announced at a later date.

United Kingdom

Funding Circle Announces Expansion to Canada (PR Newswire), Rated: AAA

Funding Circle, the leading small business loans platform in the UK, US, Germany and the Netherlands, today announced its plans to enter the Canadian market and expand access to fast, affordable and transparent financing for Canadian small businesses.

Funding Circle will establish operations in Canada in the second half of 2019 with an office located in Toronto. The business will be led by Tom Eilon, who previously led the commercial strategy for Funding Circle in the United Kingdom.

Funding Circle Holdings plc (Funding Circle), Rated: AAA

Financial Highlights:

  • Strong Group performance delivering IPO guidance whilst continuing our strategy of investing for growth
  • Revenue of £141.9 million (2017: £94.5 million). Year-on-year growth of 55%1 (excluding property2) exceeding c.50% guidance stated at IPO
  • Segment adjusted EBITDA3 of £7.0 million (2017 loss: £3.9 million) with margin of 5% (2017: negative 4%)
  • Adjusted EBITDA4 loss of £28.5 million (2017 loss: £25.1 million) with margin improving to negative 20% (2017: negative 27%)
  • Basic loss per share of 18.2 pence (2017 loss: 14.0 pence)
  • Loss before tax £50.7 million (2017 loss: £36.3 million)
  • Free cash outflow5 of £42.0 million (2017 outflow: £35.3 million)
  • Cash of £333.0 million, £244.1 million higher than at the end of 2017 (£88.9 million), including IPO proceeds of £300.0 million, before expenses of £15.0 million

UK Peer to Peer Lending: Loans top £800 Million in Q4 as Industry Matures (Crowdfund Insider), Rated: AAA

The UK Peer-to-Peer Finance Association(P2PFA) has published fourth quarter numbers for member platforms. According to their data, cumulative lending now tops £9.5 billion with over £800 million originated during the period.

The P2PFA states that platforms facilitated loans worth nearly £3 billion during 2018.

In Q4, P2PFA platforms originnated £527 million to businesses and £282 million to almost a quarter-of-a-million consumers. Cumulative lending among P2PFA platforms has now exceeded £5.5 billion for business lending and £4 billion for consumer lending.

Revolut is fighting back after yet more allegations were made against the $ 1.7 billion fintech unicorn after a week from hell (Business Insider), Rated: AAA

The Financial Times on Tuesday alleged that the UK National Fraud Intelligence Bureau (NFIB) is examining a complaint from a customer, adding to Revolut’s issues after a difficult week for the fintech.

However, the allegations were denied by Revolut and the Financial Times article was subsequently taken down.

The FT, citing emails, reported on an incident in which £70,000 was incorrectly paid into a Revolut customer’s account.

Is the Innovative Finance Isa worth it? We look at the pros and cons (City A.M.), Rated: A

At barely three years old, the Innovative Finance Isa still has some proving to do. And for some savers, it’s a product that is deemed too risky. But how risky is it really?

Of course, the IFISA is merely a tax-free wrapper, so the risk actually depends on the underlying investments held within.

And while investments can vary wildly, most IFISAs are invested in the peer-to-peer (P2P) lending market, where lenders are grouped together to invest capital through an online platform which distributes funds to borrowers.

How savers can use an Innovative Finance Isa to reap the rewards from the property market (City A.M.), Rated: A

Investors can open one IFISA per tax year, and have an annual subscription allowance of £20,000, with substantial tax-free returns.

There are also several different opportunities available when it comes to property IFISAs, including buy-to-let and development.

Wealth management firm urges greater awareness in investments (Wealth Adviser), Rated: B

Last year, the National Trust was criticised for investing in a fund with holdings in fossil fuel companies, while the Church of England was shown to have ploughed funds into Wonga, despite having publicly criticised the payday lender.

Provident fights back in bitter £1.3bn bid battle as it accuses former boss of destroying shareholder value and failing to grasp modern technology (This is Money), Rated: B

A war of words has erupted between the doorstep lender Provident Financial and its former boss John van Kuffeler as he mounts a £1.3billion hostile takeover bid.

The Provvy has accused van Kuffeler of destroying shareholder value and failing to grasp modern technology.

China

Dianrong has laid off as many as 2,000 employees amid a regulatory crackdown (Business Insider), Rated: AAA

China-based peer-to-peer (P2P) lender Dianrong has laid off as many as 2,000 employees and will shut down 60 of its 90 brick-and-mortar outlets, which helped verify the identities and qualifications of users, according to Bloomberg, citing people familiar with the matter.

Additionally, the company has been accused of falling behind on wages and severance pay, per a Chinese media outlet cited by TechNode . The company reportedly started shrinking its business around 10 months ago, despite securinga $70 million funding round in January to expand its services, including SMB lending.

Source: Business Insider
European Union

How PSD2 Will Change Lending (PYMNTS), Rated: AAA

Merchants and customers are now transacting under PSD2 and GDPR in the European Union (EU) — regulations that allow a greater window into how customer data is being used. While these regulations are aimed at increasing consumer trust by allowing them more transparency, many consumers in the region are still adjusting.

French regulatory body, the Commission nationale de l’informatique et des libertés (CNIL), has fined Googlethe equivalent of $56 million for noncompliance with GDPR within the region, alleging that the information services company was using EU customer data for advertising purposes without obtaining clear consent from those customers.

For third-party providers, such as P2P lending and investment provider Zopa, PSD2’s data transparency rules provide an opportunity to “level the playing field” when it comes to gaining that consumer trust.

International

10 Fintechs Have Already Raised Monster Rounds in 2019 (Lend Academy), Rated: AAA

We came into 2019 after a strong year of fintech investments with about $40 billion invested globally according to CB Insights.

Acorns

  • $105 million round led by NBCUniversal and venture arm of its parent company Comcast. NBCUniversal is now their largest shareholder.

Better

  • $70 million Series C from American Express Ventures and the Healthcare of Ontario Pension Plan (HOOPP). The company originated $1.3B in mortgages in 2018.

Figure

  • The $65 million Series B round was led by RPM Ventures as CEO Mike Cagney continues to show his fundraising prowess. Their valuation is said to be $365 million today about double the valuation from last year. Read our coverage here.

International P2P Lending Volumes February 2019 (P2P-Banking), Rated: AAA

The total volume for the reported marketplaces in the table adds up to 531 million Euro.

This month I added Bondster (use Bondster Promotion Code 5506 to get 1% cashback).

Source: P2P-Banking

Omidyar Network spins out its fintech investment arm as Flourish, with up to $ 300 million (TechCrunch), Rated: A

After twelve years spent investing in impact-oriented financial services startups around the globe, the Omidyar Network,  which serves as the family investment office for eBay founder Pierre Omidyar, is spinning off its financial inclusion investment arm as Flourish Ventures.

Equipped with up to $300 million in capital for operations and investments, the new Flourish will continue to invest around the Network’s core mission of backing companies with a dual focus on making a social impact and achieving quality financial returns.

List of Multi-Crypto Wallets To Consider For Your Portfolio (Cryptomorrow), Rated: A

Everus

Everus is a multi crypto wallet that allows for payment of bills and for mobile top-ups in multiple crypto and management of multiple crypto. The wallet, which is part of an ecosystem featuring bill payment, marketplace, peer-to-peer lending and micro-finance; allows customers to send, receive, store and withdraw multiple cryptocurrencies (more than 50 currently).

Peer-to-peer lending will allow people to offer and accept microloans affordably, which will be more targeted to the un-banked.

Infinito Wallet

Other features to be added soon include crypto lending where users can lend crypto and earn profits, exchange integration to allow users to exchange crypto from the wallet, fiat gateway to let users purchase crypto with fiat, digital identity and KYC where users can register their digital identity and use it everywhere else without needing to create another one, news portal to furnish users with happenings in the crypto space, and App Square for browsing dApps.

Quppy Wallet

It links to other parts of the company’s product ecosystem including decentralized exchange to allow users to buy and sell crypto, a licensed crypto bank, Prepaid co-brand bank cards, a decentralized peer-to-peer lending for borrowers as well as merchants, individuals, corporate, financial and non-financial institutions as well as crypto-fiat payments for merchants and 100% legal fiat-crypto-fiat transactions regardless of region and legislation.

India

P2P lenders develop new ways to build trust (India Times), Rated: AAA

Monexo ensures less risk for lenders by keeping a lender’s contribution to a loan to only Rs 1,000. So if a Monexo customer lends Rs 1 lakh on the platform, it gets split across 100 loans.

Faircent also has a similar strategy. It does not allow lenders to lend more than 20% of a single borrower’s requirement. So for an average loan of Rs 1 lakh, there will be on average 43 lenders funding that. They also advice lenders not to lend beyond Rs 5,000-7,000 for one loan.

Scaling small businesses with alternative finance (India Times), Rated: A

Lack of access to finance is the most widely cited constraint by SMEs for growth and scaling up business. Generally commercial banks perceive SMEs fall in the category of high default risk due to limited collaterals, smaller in asset size and limited historical track record.

Asia

Tightened supervision needed for P2P lending services: Deputy PM (Nhan Dan), Rated: AAA

Deputy Prime Minister Vuong Dinh Hue has asked competent ministries and sector to enhance inspections, supervision and settlement of violations related to peer-to-peer (P2P) lending model which has been springing up in Vietnam in recent two years.

E-Money, P2P Lending The Hotspots (Fitch Solutions), Rated: A

  • The e-money and payments segment continues to show strong growth, and consolidation within the sector is positive to improve services and ease competitive pressures.
  • P2P lending is emerging as a bright spot, and regulation remains lax enough for lenders to thrive.
  • Cryptocurrencies show little potential for growth as the regulator remains apprehensive towards crypto-based assets.

FINTERRA Calls for All Thought Leaders and Regulators to Envision A Global Waqf Bank (Salaam Gateway), Rated: B

Malaysia has the potential to become the first nation in the world to set up a global “Waqf” bank using blockchain technology, expounded Hamid Rashid, the Founder of FINTERRA.

The platform is a blockchain-based solution to crowdfund Waqf charity, Islamic investments, and peer-to-peer lending.

Canada

Klarna And PayBright Partner To Give More Shoppers The Ability To Pay Over Time (PR Newswire), Rated: A

Today, Klarna, a global payment provider, announces a partnership with Canadian instant financing provider, PayBright. Klarna and PayBright are joining forces to give Klarna’s 100,000 global retailers the ability to turn on a consumer finance solution for their Canadian shoppers quickly and easily.

Authors:

George Popescu
Allen Taylor

The post Thursday March 7 2019, Weekly News Digest appeared first on Lending Times.

The Technology Edge: How Non-Banks are Seeking to Dominate Point of Sale Lending

The Technology Edge: How Non-Banks are Seeking to Dominate Point of Sale Lending

LendIt Fintech USA 2018, April 9-11 in San Francisco, was a huge success. One of the more interesting panels was on how the non-banking sector is taking over point-of-sale (POS) lending. Kim Gerhardt, director at the San Francisco office of Edgar, Dunn and Company, moderated the panel. Other panelists included Peter Kalen, Michael Garrity, Mark […]

The Technology Edge: How Non-Banks are Seeking to Dominate Point of Sale Lending

LendIt Fintech USA 2018, April 9-11 in San Francisco, was a huge success. One of the more interesting panels was on how the non-banking sector is taking over point-of-sale (POS) lending. Kim Gerhardt, director at the San Francisco office of Edgar, Dunn and Company, moderated the panel. Other panelists included Peter Kalen, Michael Garrity, Mark Lorimer, and Camilo Concha.

Kalen is founder and CEO of Flexiti Financial, a Canadian company founded in 2013 that specializes in providing easy, instant POS financing through its award-winning mobile application process.

Garrity is co-founder, CEO, and president of a platform that has enabled merchants to facilitate consumer lending since November 2010. Financeit has processed over $2.5 billion in loan applications from thousands of merchants.

Lorimer represents LendingPoint, a lending company founded in 2014 that focuses on personal loans and debt consolidation. He is chief marketing officer. LendingPoint recently acquired LoanHero, which is in the POS lending business.

Finally, Concha is founder and CEO of LendingUSA, a company that provides innovative financing solutions with a specialization in POS lending. LendingUSA was launched in 2013 and caters to consumer finance in a variety of sectors from medical, pet care, consumer goods and services, etc.

Over the years, the POS lending industry has gained scale and seen a radical change. A convergence can be witnessed in the way payments are made and fintech lending is facilitated. The opportunity in POS financing is massive, and banks seemed to have missed the ball. Traditional banks strive to serve everyone, but when it comes to POS lending, merchants have to filter their prospective customers through a narrow funnel extending loans to a comparatively small customer base.

Flexiti Financial’s Entry in POS Lending

When Peter Kalen was asked about what brought Flexiti Financial into the business, the product that it is offering, and the level of traction it has been able to create in the market among other merchants, he articulated that Flexiti’s product is somewhat similar to what Synchrony or Alliance Data System is offering. Flexiti differs in the way transactions take place and aims to reduce the time consumed in the loan application process.

Many organizations issue private label credit cards, but application processes are long and approval rates low. With its experience and vision, Flexiti Financial has successfully introduced a 100% paperless process to offer instant POS financing. Its virtual credit card application can be downloaded from the Google Play store and the Apple store.

These private label cards speed up the loan application process, bringing the process down to three minutes. This is a win-win for retailers and customers. The platform improves the online retailer’s UX by removing the friction at the front-end.

Financeit and Point of Sale Lending

Garrity also shared his views on point of sale lending. He put emphasis on the fact that personal lending is more about new transactions and focuses less on lending. Everything in POS lending, from the technology to APIs is obsessed with enabling easy sales for merchants, improving their experience, and supporting them as they try to close more business. Merchants and customers want financing options, but they do not want to indulge in complicated programs.

Another area that Financeit targets is debt consolidation. The company has delivered a platform that makes it easy for businesses to offer powerful financing options to their customers from any device.

When asked about how they excel at delivering services to customers, Garrity said they have acquired Centah Inc, a company operating in home improvement work-flow and lead management software with joint partner and investor Goldman Sachs. The company redesigned its website to create a platform that manages the process, helps businesses connect with customers, provide dispatch scheduling systems, and represent financing options to customers throughout the process. He warnes other players that if they only focus on financing and not on the transaction, they will be missing out on an important aspect of dominating this space.

LendingUSA’s Role in POS Lending

Gerhardt asked Concha about his journey into this industry. Concha shared that LendingUSA focuses on point-of-need financing, which sits at the intersection of point of sale and fintech. He believes that businesses in today’s era are not required to be good but great if they want to be successful, and they are required to be great in all aspects, namely, marketing, technology, underwriting, and risk mitigation.

Concha started with a company called 1800mysurgeon that matched cosmetic surgeons with consumers. After starting the company, he realized the need for financing as an important part of the business. He decided to create a platform to interact with both surgery and finance to enhance the merchant’s experience.

LendingPoint’s Emergence In POS Lending

LendingPoint started as a direct consumer online lender specializing in 600-700 FICO score customers. Lorimer emphasized that the company understood very early that customer experience is crucial to POS transactions. Although the players in the market now are very good at generating products that banks like to own, they do not necessarily focus on the merchandise. LendingPoint simplifies the lending process by sharing risk and administering payment plans. LendingPoint also offers merchants risk programs to extend in-house, end-to-end services.

Marketing With Established Merchants

All the banks playing in the market are working to deliver better services to customers in different ways. The biggest players historically are Wells Fargo, Citigroup, and Synchrony Financial. They all have significant relationships.

The question is whether these big banks can be a part of this game. Concha believes that banks are an important part of the ecosystem. These banks are good for purchasing loans but are constrained by reputational risks, marketing, and other issues. Lorimer added that LendingPoint also works with some established banks. Talking of the role of hard pull and soft pull in availing credit, he shared that because a hard pull impacts the credit report of the customer, it is a cause for low approval rates. Soft pulls, on the other hand, do not affect the credit score of the credit seeker leading to a higher approval rate for loans.

Garrity shared his point of view on the tie-ups with established banks and financial institutions that become balance sheet lenders. He said they are participants in securitization, originations, and selling. He believes there is clearly an opportunity for all the stakeholder businesses to grow. Online POS lending usually operates separately considering the fact that it is complicated and technology-driven. Banks are, therefore, slow followers of fintech companies.

The Technology Edge Leads to Domination

The next important aspect analyzed was whether it is the technology that enables online POS lending businesses to dominate the lending space.

Kalen believes technology is the most important element of this space. Concha believes this space is all about keeping merchants and customers happy and building long-lasting relationships with them in the process. Lorimer questions the integration of technology among banks and whether banks will be able to adapt to complex technologies. He believes banks aren’t set up to do that, but to deliver a mass homogenous customer service. Garrity, on the other hand, believes the less you see the technology, the more attractive it is; he also thinks it is better for the merchant to focus on increasing the business close rates.

Talking about data management, Lorimer believes technology definitely provides an edge to the business on the back end. The data is the source for everything and it is analyzed and configured to improve the experience. As technology enables automation and brings security, users can access everything at one place and find it already stored in the system.

Kalen agrees that technology is a boon for backend data management. He added to the discussion saying that the more established players have an edge as they have been in business for many years. They have been able to hone their skills over a period of time.

Concha also believes that technology will work for the POS lending as it is different from other businesses. There is a major role of risk, debt, and strong relationships in POS lending, and none of these can be managed properly without technology.

The Challenges of POS Lending

Technology, scale, and partnerships:
Kalen from Flexiti views POS lending as a very different business than retail lending. Getting customers and coping with technology are major challenges. Other challenges that non-bank businesses face are focusing on the scale. It is important for the business to look at the credit cycle and beware of fraudulent practices as it increases the scale of operations.

Credit cycle:
Being on the right side of the credit cycle is crucial to every lending business. The access to credit in the credit cycle determines the risk and therefore the value of the business. Businesses must prepare their strategies, keeping the future in mind.

Regulation:
Lorimer believes this space requires more regulation since the Consumer Financial Protection Bureau (CFPB) is not very active. Poor regulation and lack of control pose a major risk to the players in the market.

Availability of capital and credit risk:
Another challenge is the availability of capital to extend lending facilities. The fear of credit facilities drying up in a day also bothers businesses.

The Takeaway

Kalen has realized that success does not come easy. The companies in this space need to understand that a lot of lending capital is required along with an understanding of the tricks of the trade.

Concha believes it is a 3-step learning process where the business is required to go through a testing phase, an education phase, and an adoption phase.

With LendingPoint’s recent acquisition of LoanHero, it is comparatively a new entrant in the market.

The crux of the entire discussion is that POS lenders must be specialized to survive in the market. The business has to endeavor to offer value added merchant services instead of being a one-stop shop to be successful. There is a lot of room for growth provided one understands the complexities of the trade.

Author:

Stephanie Vaughan is vice president at  Allen TaylorPosted on Categories Alliance Data System, alternative lending, Analysis, balance sheet lending, Banks, CFPB, Citigroup, consumer lending, Credit, credit risk, Featured, FICO, Financeit, Flexiti Financial, instant financing, LendingPoint, LendingUSA, LendIt 2018, Online Lending, point of sale financing, point of sale lending, POS financing, POS lending, Regulation, Synchrony Financial, Wells Fargo

Wednesday March 21 2018, Daily News Digest

fintechs

News Comments Today’s main news: Mike Cagney’s Figure is out of stealth. CommonBond raises $50M. Airbnb features RealtyShares as multifamily financing solution. Monzo hits 500K current accounts. LexinFintech falls short on Q4 earnings. N26 raises $160M. Today’s main analysis: Mortgage Rate Competition Index widens. Today’s thought-provoking articles: The death of cash could be overstated. The most popular cities for millennial homebuyers. The […]

fintechs

News Comments

United States

United Kingdom

China

European Union

Other

News Summary

United States

Ex-SoFi CEO Mike Cagney’s new startup, Figure, is out of stealth (Fast Company), Rated: AAA

SoFi cofounder Mike Cagney, who resigned as CEO last year, has been quietly working on a new project involving home improvement financing and home equity lines of credit (HELOCs) for the last several months. Now, that project is out of stealth, with a live website: Figure.com.

According to Cagney’s LinkedIn profile, the startup plans to leverage blockchain-based technology and AI “to unlock new access points for consumer credit products that can transform the financial lives of our customers.”

The death of cash might be overstated (Business Insider), Rated: AAA

The decline of cash in the US might be exaggerated, according to Cardtronics and PYMNTS’ Global Cash Index (GCI).

Cash still sees healthy usage in the US: The share of cash in 2016 accounted for 12.6% of the country’s gross domestic product (GDP), and the study forecasts that it will account for 11.2% of the US GDP by 2021.

Here are three factors that might contribute to the endurance of cash in the US:

Source Business Insider

Cash persists for low-value transactions. Nearly two-thirds of US consumers said they prefer to rely on cash for purchases of $10 or less. That could be partly because it’s expensive for merchants to accept card payments, which leads to card transaction minimums that encourage cash usage for these purchases. This could help keep cash alive in consumers’ day-to-day lives.

Des Moines, Pittsburgh and Buffalo Among Most Popular Cities for Millennial Homebuyers (PR Newswire), Rated: AAA

LendingTree has released the findings of its study on the most popular cities for millennial homebuyers.

Young homebuyers are at the forefront of an increasing number of buyers returning to the housing market. The largest single-age population in the U.S. is 27-year-olds at almost 4.8 million, suggesting that millennials’ influence on the housing market has years to run before it peaks.

Millennial homebuyers make up one-third of mortgage requests. 32.5 percent of all mortgage requests through LendingTree between Feb. 1, 2017 and Feb. 1, 2018 came from consumers 35 years and younger. The average loan amount requested from this age group is $166,863.

Where millennials aren’t vying for homeownership. At the other end of the scale, Sarasota, Fla.Fort Myers Fla. and Honolulu had lowest shares of millennial buyers at 17.9 percent, 19.8 percent and 21.8 percent respectively.

Source: Lending Tree

CommonBond Secures $ 50M Series D Equity Round, Led by Fifth Third Bancorp (MarketWatch), Rated: AAA

CommonBond, a leading financial technology company that empowers students and graduates to pay for higher education, today announced a $50M Series D financing round.

Fifth Third Capital Holdings, LLC, a wholly-owned subsidiary of Fifth Third BancorpFITB, -0.69% led the round, with First Republic Bank FRC, -0.49% and Columbia Seligman Investments also participating, in addition to existing investors including Neuberger Berman, August Capital, and Nyca Partners. Individual investors in CommonBond include Vikram Pandit, former CEO of Citigroup, and Tom Glocer, former CEO of Thomson Reuters. This latest round brings CommonBond’s total funding raised to over $130M. CommonBond will use this new funding to accelerate its growth and invest further in technology.

Airbnb Features RealtyShares as First Multifamily Financing Solution (Business Wire), Rated: AAA

RealtyShares, a leading online marketplace for commercial real estate investing, today announced it is featured by Airbnb as a financing resource in its Multifamily Properties Toolkit, a website that gives owners, operators and developers of multifamily buildings resources to support long-term tenants who wish to share their space with travelers. RealtyShares provides experienced multifamily building owners and operators financing to buy, refinance, and renovate their buildings.

Landlords can now manage Airbnb activity in their buildings and share in the additional rental income with the Airbnb Friendly Buildings Program. As a result, multifamily property owners have become increasingly interested in helping their tenants improve and share their space on Airbnb.

OnDeck Appoints Kenneth Brause As New Chief Financial Officer (Crowfund Insider), Rated: A

Online lending platform for small businesses OnDeck (NYSE: ONDK) announced it has appointed Kenneth Brause as its new Chief Financial Officer, effective March 26th, as part of a mutually agreed upon transition process. The lender reported that current Chief Financial Officer, Howard Katzenberg. Katzenberg will serve as an advisor to OnDeck until April 13th, working closely with Brause to facilitate a smooth transition.

According to OnDeck, Brause brings more than 30 years of experience in the financial services industry to the lender’s team.

 

 

Average Cost of College Statistics for 2018 (Lend EDU), Rated: AAA

No matter whether you attend a public or private school, or whether you attend a 2-year or 4-year college, you can expect to pay more than those who attended before you.

By checking out the graph to the right (which does​ not account for inflation) you can see that in the past 20 years, tuition at all types of colleges has more than doubled, and in some cases has more than tripled.

Source: Lend EDU

Though the graph does not account for inflation, the rate of tuition increase has greatly outpaced the inflation rate – by at least 3 times for most school types.

The following is the average cost-of-attendance for the 2017-18 school year by school type including tuition & fees, room & board, books & supplies, transportation, and any other expenses.

  • Private 4-Year Not-for-Profit: $50,900   
  • Public 4-Year Out-of-State: $40,940  
  • Public 4-Year In-State: $25,290  
  • Public 2-Year In-District:​ $17,580   
  • Private For-Profit: $16,000 (tuition only)
Source: Lend EDU
Source: Lend EDU

 

Mortgage Rate Competition Index Widens (Lending Tree) Rated: AAA

  • Homebuyers could have seen median savings of $27,980 by comparison shopping for the best mortgage rates last week, up 4.5% from the prior week.
  • This week’s Mortgage Rate Competition Index was 0.60 for purchase mortgages, up 0.15 from a year ago, and up 0.02 from last week. The Index measures the median spread between the highest and lowest APR available on the LendingTree platform.

Purchase loans

  • Across all purchase loan applications on LendingTree for the week ending March 18, 2018, the index was 0.60, up 0.02 from the previous week.
  • How big of a deal is it to nab a mortgage rate that’s 0.60% lower than the competition? Over 30 years, that could translate to $27,980 in savings on a $300,000 loan
Source: Lending Tree

Mortgage fintech company completes capital raise (National Mortage News), Rated: B

Home Captain, a fintech company that looks to increase mortgage-lead conversion rates, completed a Series A financing round led by Spring Mountain Capital.

Spring Mountain joined Second Century Ventures, the strategic investment arm of the National Association of Realtors, as an institutional investor in Home Captain, which pairs prequalified homebuyers with real estate agents.

Ken Rees, CEO of Elevate, to Speak at LendIt Fintech Conference (Business Wire), Rated: A

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, announced today that their Chief Executive Officer, Ken Rees, will address the audience at LendIt Fintech 2018 along with CNBC’s Ari Levy.

Rees will be joined by Levy, senior technology reporter at CNBC, who will lead the discussion through a variety of themes, including:

  • How banks and fintech companies can partner to take advantage of the opportunity in non-prime lending
  • What it takes to build winning products for non-prime consumers
  • Predictions for the biggest areas of innovation in non-prime lending in 2018 and beyond

Covr Financial Technologies announces Michael Kalen as Chief Executive Officer (PR Newswire), Rated: B

Michael Kalen has joined Covr Financial Technologies, a digital, multi-carrier life insurance platform for financial institutions, as its chief executive officer, Covr Board Chairman Brian Finn announced.

U.S. Online Merchants Believe Instant Financing Will Drive Increased Sales (PNY), Rated: A

Online merchants in the U.S. are increasingly recognizing the importance of offering instant financing to shoppers, according to a new online e-commerce survey. Nearly two-thirds of retailers polled (64 percent) believe providing online financing options through their store is important to driving new and increased sales. Forty-six percent indicate it would decrease cart abandonment still one of the most critical challenges for online retailers today.

The survey was released here by Klarna, a leading global payments provider, at Shoptalk in Las Vegas.

Franklin Resources to Acquihire Random Forest Capital (Street Insider), Rated: B

Franklin Resources, Inc. (NYSE: BEN), which operates as Franklin Templeton Investments, today announced the acquisition of Random Forest Capital, LLC (“Random Forest”), an investment firm with expertise in data science and non-bank marketplace lending. Following the acquisition, the Random Forest team will join the Franklin Templeton Fixed Income Group investment team. Terms of the transaction were not disclosed.

New Florida law will loosen small-dollar lending rules (American Banker), Rated: B

Florida Gov. Rick Scott signed a bill Monday that will loosen the state’s rules for small-dollar consumer lending.

The law, which sailed through both houses of the Florida Legislature, authorizes 60- to 90-day loans of up to $1,000, while continuing to allow 30-day payday loans.

United Kingdom

Monzo Milestone: Challenger Bank Hits Half A Million Current Accounts (Crowdfund Insider), Rated: AAA

On Monday, UK-based challenger bank Monzo announced it has achieved half a million current accounts. The company launched its current accounts in October last year and since then, thousands of users have upgraded their accounts or signed up to start using Monzo’s banking products.

Monzo also reported that it will close the prepaid Beta on April 4th, so if users have not upgraded, their card will stop working and they won’t be able to use your Monzo app to make or receive payments.

Welendus goes live with interest-free loan offer (Peer2Peer Finance), Rated: A

PEER-TO-PEER payday lender Welendus has launched its first product, offering borrowers an interest-free loan if the debt is repaid in one day.

Individuals can borrow up to £500 using the new facility, which is aimed at those faced with unexpected or emergency bills, Welendus said. The borrower does not have to pay any interest if they pay the loan back within 24 hours.

There are no early repayment fees and borrowers can get a decision within five minutes.

Investors will receive returns ranging between five and 15 per cent to fund the loans.

Fintech referral platform bags series A fundraise (AltFiNews), Rated: A

Funding Xchange, one of a handful of platforms designated by HM Treasury to refer businesses declined credit by the banks to other sources of funding, has closed a £1.5m series A round.

The round was led by Calibrate Management Ltd and Kimera. The money will be used to continue the development of Funding Xchange’s automated decisioning technology, as well as for the incorporation of live transactional data sources.

Inflation finally falls but still beats savings returns (Peer2Peer Finance), Rated: A

INFLATION hit a seven-month low last month but there is little sign of respite for interest-starved savers as ISA season approaches, figures show.

Official for National Statistics (ONS) data shows consumer price inflation (CPI) grew by 2.7 per cent in February, finally falling from its five-year high of three per cent but still above the Bank of England’s two per cent target.

 

“But still, with inflation sitting at 2.7 per cent, savers’ cash is being eroded in real terms. In comparison to last year, savers would have found it difficult to get one per cent on an easy access ISA.”

Senior RBS fintech investment banker re-emerges at startup (Financial News), Rated: B

A former Royal Bank of Scotland investment banker, who led its coverage of fintech deals, has quit his private equity job after just five months to join a peer-to-peer lending startup staffed by former Goldman Sachs and HSBC analysts.

Rory McHugh, a former managing director at RBS, has joined Lendable, a UK-focused personal loans platform. Set up in 2014, the firm offers loans of up to £20,000 and raised £300m to lend to new customers in November.

Be a venture capitalist with an Innovative Finance Isa (The Times), Rated: A

Compared with cash Isas, Ifisas are as much a high-risk option as any loan that is not protected by the Financial Services Compensation Scheme (FSCS). This means that lenders cannot seek money from P2P borrowers that are unwilling or unable to pay money owed, whereas the scheme protects savings and investments offered by FSCS-authorised banks and other companies.

Source: The Times

There are more than 30 providers jostling for space and support from subscribers, with typical rates of return of between 3 and 7 per cent, as well as some offering up to 16 per cent. The interest rates on offer comfortably outstrip the 2 to 3 per cent attached to cash Isas. See our table, below, for a range of Ifisas presently available to new customers.

FCA calls for global effort to speed up fintech growth (NAI500), Rated: B

The Financial Conduct Authority has called for the creation of a global alliance of regulators that would encourage growth in fintech by allowing companies to test new products without going through a full approval process.

Speaking at the Innovate Finance Global Summit in London, Mr Woolard said expanding such a programme internationally would be “an immense undertaking”, but said “we’re up for the challenge”, having already seen “lots of interest” from other regulators.

China

Hot Chinese IPO LexinFintech Falls Short On Q4 Earnings, Revenue (Investors Business Daily), Rated: AAA

LexinFintech (LX) reported weaker-than-expected fourth-quarter earnings and revenue as the Chinese online lender issued its first quarterly report since its December IPO.

LexinFintech earned 4 cents per U.S. share diluted on revenue of $244.95 million. Analysts had expected EPS of 13 cents on revenue of $279.7 million, according to Yahoo Finance.

Shares tumbled 12.4% to close at 15.98 on the stock market today after rallying 5.3% on Monday to 18.25.

Loan originations rose 115% vs. a year, customer balances swelled 95% and registered users 99%. Acquisition costs per customer fell 22%.

Dow Jones Leads Morning Rally, But This FANG Stock Falls Further (Investors Business Daily), Rated: A

IPO Leader LexinFintech (LX) fell over 8% after the Chinese online lender reported weaker-than-expected Q4 earnings and sales results. The new issue has been volatile after a short-lived breakout above an 18.39 IPO-base entry on March 9. Just days later, the stock would trigger the 7%-8% sell signal before rebounding.

Golden Bull Limited Announces Pricing of Initial Public Offering (PR Newswire), Rated: A

Golden Bull Limited (“Golden Bull” or the “Company”) (NASDAQ: DNJR), an online finance marketplace that connects individual lenders with individual and small business borrowers, today announced the pricing of its initial public offering of 1,550,000 ordinary shares at a public offering price of $4.00 per share, for total gross proceeds of approximately $6.2 million before underwriting discounts and commissions and offering expenses. In addition, Golden Bull has granted the underwriters a 45-day option to purchase up to an additional 232,500 common shares at the public offering price, less underwriting discount and commissions.

 

European Union

The challenger bank N26 raises $ 160M ahead of U.S. launch (American Banker), Rated: AAA

The mobile-first bank N26 in Berlin has raised $160 million in preparation for its launch of a challenger bank in the United States.

All told, N26 has raised $215 million. Previous investors have included Peter Thiel’s Valar Ventures, Earlybird Venture Capital and Li Ka-Shing’s Horizons Ventures.

Part of the $160 million will be used on product development for the existing offering in Europe, according to U.S. CEO Nicolas Kopp. The rest — and he would not say how much this is — will be used for international expansion, most immediately into the U.K. and U.S. markets.

Swedish banks risk losing tens of billions of euros to fintech startups – here are the ones leading the charge (Business Insider), Rated: A

On Monday, the startup Enkla launched, causing a stir in the market. Their interest rate of 0,95 percent is well below the banks’ average interest rates and according to their CEO, Alexander Widegren, Enkla received about 2 billion euros (SEK 20 billion) in applications their first day, Di Digital reported.

Enklas goal is set to lend out 10 billion euros within 18 months.

The four largest Swedish banks, SEB, Nordea, Handelsbanken and Swedbank – which have a combined 75 percent share of the country’s mortgage market – all had a rough day on the stock market on Monday, which may have been caused in part by the emerging threat.

Australia

Australian SMEs favor alternate lending to fund business (Enterprise Innovation), Rated: AAA

Australian small and medium size enterprises (SMEs) are turning to non-banks to secure funding for their business. The latest issue of the Scottish Pacific SME Growth Index revealed that, between 2014 and 2018, the proportion of SMEs intending to use banks for funding has dropped from 38% to 24%. It also found that non-bank funding is now the first option for 22% of SMEs, up from 11% in 2014.

Moreover the report noted that 47.6% of SMEs, who have not used any non-banking lending options in the last 12 months, would be interested in using these options in the future.

There is an estimate 2.1 million SME businesses in Australia employing more than 7.3 million people or about 68% of Australia’s overall workforce.

Source: Enterprise Innovation

FinTechs To Surpass Banks As Aussie SMBs’ Top Finance Choice (PYMNTS), Rated: A

The “Scottish Pacific SME Growth Index,” released twice a year, found the portion of small businesses that said they would use banks for funding declined from 38 percent in 2014 to 24 percent in 2018.

Nearly half (47.6 percent) of SMBs that said they never used a non-bank to access financing said they would be interested in doing so in the future.

Asia

PT INVESTREE Radhika Jaya (Investree), a pioneer peer-to-peer lending (P2P) marketplace in Indonesia, is eyeing to close its Series B funding by the first half quarter of this year.

The company received an undisclosed amount of funding from Kejora Ventures in June 2016.

Investree has facilitated 600 billion rupiah (US$45 million) in loans to 330 SMEs, with 16,000 registered lenders, 5,000 active lenders between 21 to 40 years of age and has a return rate of 16.6% with no defaults.

In terms of business growth, Investree has seen 14% to 15% growth in revenue since 2016.

 

Latin America

Alipay breaks ground in Mexico (Finextra), Rated: AAA

Alipay, the world’s leading digital payments platform, operated by Ant Financial Services Group, today announced that it is further expanding its footprint in the Americas through a partnership with Openpay in Mexico.

Now, Alipay’s more than 600 million active users in China will be able to use Alipay to make purchases from Openpay’s affiliated businesses in Mexico. Alipay is China’s leading payment provider and the primary means of online and mobile payment for Chinese consumers.

Authors:

George Popescu
Allen Taylor

Thursday February 8 2018, Daily News Digest

LendingTree personal loans

News Comments Today’s main news: RateSetter’s IFISA finally arrives. Renaud Laplanche to keynote at LendItFintech USA 2018. LendingClub makes changes to IRA product. Goldman could be buying Clarity. Today’s main analysis: LendingTree January 2018 Personal Loan Offers Report. LendingTree January 2018 Mortgage Offers Report. Today’s thought-provoking articles: Amsterdam gaining ground on London as Europe’s fintech capital. Senmiao Technologies sets terms […]

LendingTree personal loans

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

MENA

Canada

Bermuda

News Summary

United States

Renaud Laplanche Joins LendItFintech USA 2018 As Keynote Speaker (PR Newswire), Rated: AAA

LendItFintech, the world’s leading event in financial services innovation, today announced that Renaud Laplanche, founder and CEO of Upgrade, Inc., will join the keynote speaker roster for LendItFintech USA 2018. For three days, the world’s most prominent and emerging fintech CEO’s will gather at the Moscone Center to focus on the hot button topics and issues exploring the future of finance.

Laplanche’s keynote speech will focus on his vision for Online Lending 2.0 and in particular how new technology, blockchain, enhanced processes and the combined learnings of the past 10 years have helped make online lending better for consumers and investors alike.

Laplanche will also unveil Upgrade’s next major consumer credit product that industry observers are already touting “the biggest innovation in financial services since the credit card. Also, to illustrate how the Online Lending 2.0 principles help create more value for consumers and enable faster growth while achieving better risk management, compliance and credit performance, Laplanche for the first time, will release metrics about Upgrade exactly one year after its public launch.

Tax Efficient Investing and LendingClub IRA Changes (Lend Academy), Rated: AAA

Tax rates for 2018 start at 10% and go up to 37% for the highest wage earners. It’s important to understand how this ordinary income affects taxes compared to other asset classes like equities.

Let’s assume you decide to invest through a taxable LendingClub account. In a given tax year, you are only allowed to deduct $3,000 in losses against your ordinary income unless you have capital gains to offset the losses.

If you have a sizable investment in LendingClub and have no capital gains you’ll have to carry forward any losses beyond the $3,000 to future years.

LendingClub Offering a Bonus for IRA Investors

After understanding the benefits of investing through an IRA it’s worth mentioning that LendingClub offers bonuses for new accounts. The bonuses range from $25 all of the way up to $3,000 and are available on Traditional IRAs, Roth IRAs, SEP IRAs or SIMPLE IRAs. Below are the bonus amounts in place for 2018.

TaxSlayer Teams Up With Kabbage To Provide Small Businesses Easy Access To Working Capital (PR Newswire), Rated: A

TaxSlayer, a leading online and professional tax and financial technology company, today announced a strategic partnership with Kabbage, Inc., a global technology and data platform powering small business lending. The collaboration offers qualified small business customers hassle-free access to lines of credit up to $250,000 from Kabbage, and exclusive tax resources, including tips, promotions and discounts from TaxSlayer.

TaxSlayer customers will have access to:

  • Lines of credit from Kabbage up to $250,000 for qualified borrowers
  • Promotions from Kabbage, including a $100 gift card after qualification
  • Partner offers through the Kabbage Customer Perks network
  • Tips and insight on small business lending and finance

Kabbage customers will have access to:

  • Small business and personal tax tips from TaxSlayer
  • Market leading tax-filing support from TaxSlayer
  • Unique promotions and discounts from TaxSlayer, including 20 percent off services

LendingTree Personal Loan Offers Report (LendingTree), Rated: AAA

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 7.41% in January.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 7.41%, a decrease of 13 basis points from the prior month, and 47 basis points from the same period one year ago.
  • At $24,218, the average loan amounts offered with the best APRs to all borrowers with a score of 760 and above, was down up 17 basis points ($41) from December, but up over 23% ($5,607) from the same period one year ago.
  • The top 10% of offers, presented to borrowers with the best profiles within this group, had APRs of 4.98% on average, and loan amounts of $34,892. A borrower with this APR and loan amount would save $2,896 by consolidating debt with a 10% APR over a three-year term.
Source: LendingTree

Good credit (680 – 719 score): Offered APRs to consumers with a credit score between 680 and 719 averaged 15.79% in January.

  • The average best APR for all borrowers with credit scores of 680 – 719 was 15.79%, down 12 basis points from last month, but up almost 200 basis points from a year earlier.
  • At $15,628, borrowers with scores of 680 – 719 saw the amounts offered with the best APRs increase by 1% ($160) in the last month, but drop by 1.72% ($268) from January 2017.
  • The top 10% of offers, presented to borrowers with the best profiles within the 680 – 719 credit score range, had an average best APR of 7.19%, offered with an average loan amount of $24,130. A borrower with this APR and loan amount would save $3,215 by consolidating debt from a 15% APR over a three-year term.
Source: LendingTree

LendingTree Mortgage Offers Report (LendingTree), Rated: AAA

  • January’s best offers for borrowers with the best profiles had an average APR of 3.93% for conforming 30-year fixed purchase loans, up from 3.80% in December. Refinance loan offers were up 5 bps to 3.75%.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 13 bps to 4.55%. The loan note rate hit the highest since March 2016 at 4.45% and was also up 13 bps from December.
  • Consumers with the highest credit scores (760+) saw offered APRs of 4.41% in January, vs 4.70% for consumers with scores of 680-719. The APR spread of 29 bps between these score ranges was 1 bps narrower than in December but still near the widest since this data series began in April 2016. The spread represents nearly $15,000 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $238,518.
  • Refinance APRs for conforming 30-yr fixed loans were up 15 bps to 4.46%. The credit score bracket spread widened to 25 from 24 bps, amounting to $13,000 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $244,540.
  • Average proposed purchase down payments fell for the first time in 8 months to $63,411.
Source: LendingTree

Apple May use Marcus for Point of Sale Financing (Crowdfund Insider), Rated: A

Indicative of this systemic trend is a report this week in WSJ.com saying Apple may be cutting a deal with Marcus – Goldman Sachs’ vision of the future on online lending.

According to the WSJ report, Goldman may provide Apple with point of sale credit at interest rates far lower than the typical credit card.

“By offering a lower-cost loan, Goldman hopes to siphon off some of that business. Goldman charges 12% interest on its average Marcus loans. Credit cards can charge upward of 20% and carry late fees and other charges. Partnerships with big retailers like Apple are key. They can deliver millions of customers that Goldman would struggle to find on its own.”

Goldman is said close to buying personal-finance startup Clarity (American Banker), Rated: AAA

Goldman Sachs is in discussions to acquire the personal finance startup Clarity Money, with plans to fold it into its Marcus online lender, according to people familiar with the matter.

Robinhood users ramped up deposits during Monday’s market bloodbath (Business Insider), Rated: A

On Monday, the US stock market witnessed its largest point decline ever. The Dow Jones industrial average dropped as much as 1,600 points during Monday trade before closing down 1,175 points. Still, a spokesperson for Robinhood, the California-based brokerage, told Business Insider its users ramped up deposits on its zero-commission stock trading platform.

Venmo monetization may be on the horizon (Business Insider), Rated: A

Source: Business Insider

Venmo alone hit $10.4 billion, about 39% of the P2P total. As P2P surges across the board, it’s helping 

Identity fraud hits all time high with 16.7m US victims in 2017 (Payments Cards and Mobile), Rated: A

The 2018 Identity Fraud Study released by Javelin Strategy & Research, revealed that the number of identity fraud victims increased by 8% (rising to 16.7 million US consumers) in the last year, a record high since Javelin began tracking identity fraud in 2003.

The study found that despite industry efforts to prevent identity fraud, fraudsters successfully adapted to net 1.3 million more victims in 2017, with the amount stolen rising to $16.8 billion.

The 2018 Identity Fraud Study found four significant trends:

  • Record high incidence of identity fraud  In 2017, 6.64% of consumers became victims of identity fraud, an increase of almost 1 million victims from the previous year.
  • Account takeover grew significantly – Account takeover tripled over the past year, reaching a four-year high. Total ATO losses reached $5.1 billion, a 120% increase from 2016.
  • Online shopping presents the greatest fraud opportunity – Card Not Present Fraud is now 81% more likely than point of sale fraud, the greatest gap Javelin has observed.
  • Fraudsters are getting more sophisticated

Nearly half of small businesses plan to invest in cybersecurity in 2018 (AZ Big Media), Rated: A

Half of all U.S. small businesses were breached in 2016, according to 2016 State of SMB Cybersecurity Report. Disruption to normal operating expenses costs an average of $955K, which can be devastating to small business owners.

As part of Kabbage’s ongoing effort to help small businesses to be successful, Kabbage recently surveyed more than 800 customers and nearly half (47 percent) plan to invest in cybersecurity products and services in 2018.

Hackers find value in obtaining employee and customer data, bank account information and/or intellectual property, no matter the size of the business. Today, more than 70 percent of attacks are targeted toward small businesses, largely due to the their beliefs that they won’t be hacked (mostly due to their size).

Virginia consumers to receive $ 2.7 million in relief from settlement with internet lender (WINA), Rated: A

Attorney General Mark R. Herring announced today that more than $2.7 million in relief will be provided to Virginia consumers who took out loans with Internet lender MoneyLion of Virginia LLC-an affiliate of New York based Internet lender MoneyLion, Inc. Attorney General Herring’s settlement with MoneyLion will provide refunds and debt forgiveness to 3,800 consumers as a result of the company’s alleged violations of the Virginia Consumer Protection Act. Since creating a Predatory Lending Unit in his Consumer Protection Section, Attorney General Herring’s Office has recovered more than $25 million in restitution and debt forgiveness for Virginia consumers from online lenders.

The settlement includes the following key terms relating to loans made by MoneyLion during the period in question:

• MoneyLion agrees to provide $359,811.50 in refunds to 1,161 Virginia consumers who paid more than their loan principal plus 12% APR;
• MoneyLion agrees to give up the collection of $2,354,097.05 in illegal interest it charged on loans with 2,639 Virginia consumers;
• A payment to the Commonwealth of $10,000 as a civil penalty for MoneyLion’s alleged violations of the VCPA;
• A payment to the Commonwealth of $20,000 for its costs and fees in investigating MoneyLion’s alleged violations of the VCPA;
• Permanent injunctions preventing MoneyLion from misrepresenting its license status, allowable interest rates, and allowable fees.

Bankrupt Payday Lender Can’t Move CFPB Suit To Texas (Law360), Rated: A

A Montana federal judge refused to transfer a CFPB action alleging Think Finance duped borrowers and used sham tribal payday lenders to collect money it was not owed, finding Tuesday the case need not be moved to where the financial technology company’s Texas bankruptcy is.

U.S. District Judge Brian M. Morris said the state of Montana has a “substantial interest” in hearing the Consumer Financial Protection Bureau’s case since Think Finance LLC’s loans were voided under the state’s law.

Movement Mortgage Implements CompenSafe to Automate LO Compensation (Send2Press), Rated: B

LBA Ware, a leading provider of automated compensation software and systems integration solutions for mortgage lending and retail banking, announced that South Carolina-based Movement Mortgage has implemented CompenSafe to automatically calculate commissions for its loan originators (LOs) located in 700 branches across 49 states.

Cerberus Capital Management, L.P. today announced that an affiliate has entered into an agreement to acquire Cyanco Holding Corp. from funds managed by Oaktree Capital Management, L.P. (“Oaktree”).  Cyanco is the largest global producer of sodium cyanide, a critical input in the gold and silver mining industry. Terms of the transaction, which is subject to customary conditions to closing, were not disclosed.

OCC Chief Praises Mulvaney On Halting Payday Rule (PYMNTS), Rated: B

After a 45-minute meeting on Tuesday (Feb. 6), Comptroller of the Currency Joseph Otting had nothing but praise for acting Consumer Financial Protection Bureau (CFPB) Director Mick Mulvaney.

“Acting Director Mulvaney has helped reduce the burden on the banking system by delaying implementation of his agency’s Home Mortgage Disclosure Act rule, committing to reconsidering its payday lending rule, and deferring action on additional regulations until completing a more thorough review of those matters,” Otting said in the release. “I also applaud him for realigning his agency’s mission to the current needs of the nation, making its processes more transparent and fair.”

United Kingdom

RateSetter Innovative Finance ISA is Finally Here (Crowdfund Insider), Rated: AAA

Peer-to-peer lending platform RateSetter has shared that is Innovative Finance ISA (IFISA) will launch tomorrow (February 8th). RateSetter said the IFISA will initially be available to existing customers, then to new customers on 1 March and to inward transfers from other ISAs in April.

What a difference a tax year makes! P2P platforms pile in to the IFISA market (P2P Finance News), Rated: A

Just a handful of peer-to-peer platforms had full Financial Conduct Authority approval in time to launch an IFISA product in April 2016, with 2,000 accounts and £17m subscribed up to April 2017.

Many saw this as a damp squib, but as we enter ISA season for the 2017/18 tax year, platforms representing almost 80 per cent of the market could be set to lead the charge.

Both Zopa and Funding Circle have loan books worth more than £3bn each, while RateSetter boasts a portfolio worth £2.5bn.

ISA Innovation: What do investors think? (AltFi), Rated: A

Crowdstacker’s CEO Karteek Patel reveals why investors have opted for the Innovative Finance ISA over the past two years. 

When the first types of ISA launched in 1999 the country was still in the first flush of a much feted Blair Government, the economy was buoyant, and the outlook rosy.

It was the end of a decade that saw average base rates of around 8%. Inflation meanwhile may have started at 9.5% in 1990, but it rapidly fell to a more manageable 1.5% by 1999.

2016-17 average ISA subscriptions were £5,558. Average subscriptions for our Innovative Finance ISA were above £11,000 – probably indicating early adopters of the IFISA are more seasoned investors, who are investing larger sums. Of course, as we know from other innovations such as smartphones and social media, where early adopters lead, the masses will follow, as long as the proposition is attractive.

How UK challenger bank Monzo turned its customers into a loyal community (Tearsheet), Rated: A

Monzo asks customers for feedback on product launches and fees, allows them to invest in the company through equity crowdfunding rounds and holds community events across the U.K., either at Monzo offices or customer suggested venues. Its approach is based on the principle that customers will stay loyal and will refer others if they’ve got some kind of stake in it. Banks have traditionally relied on large-scale ad campaigns and promotions to get customers to change their providers. But U.K. customers still aren’t changing their banks in droves; according to U.K. nonprofit Bacs only 4.45 million successful switches have taken place since 2013. Plus, they’ll have less and less motivation to switch bank providers as more non-bank entities begin offering comparable services.

The company’s biggest growth driver is loyalty, with word-of-mouth referrals being the source of 80 percent of new customer growth, according to the company. The remaining 20 percent is based on a limited amount of sponsored ads on Facebook and Twitter. More than 30,000 customers participate in an online feedback forum for new products.

Separately, Monzo holds eight to 12 events per year around the U.K.

 

Esme Loans joins NatWest’s alternative finance panel (Finextra), Rated: A

Esme Loans, the digital lending platform that allows small and medium sized businesses to quickly obtain unsecured loans of up to £150,000, will join a select group of leading alternative finance firms on NatWest’s Capital Connections panel.

Princeton dispute pushes Ranger’s 2017 returns into negative territory (P2P Finance News), Rated: A

RANGER Direct Lending (RDL) saw its net asset value (NAV) slide 2.95 per cent over 2017 due to its ongoing Princeton legal arbitration.

The investment trust’s December update showed its NAV return was 4.53 per cent in 2017 but the ongoing legal dispute with its Princeton investment over bankrupt lender Argon pushed it into negative territory.

On a monthly basis, RDL’s NAV was actually at a six-month high to 0.48 per cent.

Lendy secures major repayment on west London flat (Bridging&Commercial), Rated: B

P2P lending platform Lendy has announced that it has received a major repayment in excess of £2.1m on a luxury flat in west London.

The property has a security value of £3.25m, a loan value of £2.12m and an LTV of 65%.

Personal lending increases four times faster than wages (BBC), Rated: A

In comparison, wage data from the Office for National Statistics (ONS) shows the typical full-time worker has seen pay increase by 6.5%, over the same period.

British households amassed £37bn in unpaid personals loans in 2017, an increase of £7bn from three years earlier.

In Northern Ireland personal loan debt is just over £1bn and has risen 4% since 2014.

FINTECH AND BANKING GROUP SET FOR IPO (BusinessCloud), Rated: B

TruFin has published a document announcing its intention to float on the AIM market of the London Stock Exchange in late February.

TruFin has offices in London and Birmingham and currently operates under three separate businesses: Distribution Finance Capital (DFC), Satago and Oxygen Finance.

The group also owns a 15 per cent stake in technology-led peer-to-peer lender Zopa. The platform was launched in 2005 and has since originated over £2.6bn of unsecured loans, connecting more than 320,000 customers to 70,000 investors.

China

China’s recent crackdowns indicate growing pains for its advanced fintech industry (Tearsheet), Rated: A

The central bank is now reining in “social credit” scoring models by companies like Tencent and Alibaba that use consumer data from purchases and social behavior, as of the past weekend. These programs are designed to make up for the lack of institutional records of individuals’ creditworthiness in China’s financial system — something the central bank itself has tried to address with its own solution. Now the government is worried e-commerce-turned-fintech giants could use social scoring as marketing to sell their financial products.

China is a mobile-first nation. Mobile e-commerce took off there because its retail landscape was weaker and less efficient 15 years ago compared to that of the U.S.

European Union

Amsterdam Makes The Most Of Its Fintech Credentials (Global Finance), Rated: AAA

Despite Brexit, London has managed to hang onto its status as Europe’s leading fintech hub, at least for now. According to the Nesta 2016 European Digital City Index, “London leads for both start-ups and scale-ups.” However, Stockholm and Amsterdam, which rank second and third respectively out of 60 cities, are leading the pack nipping at London’s heels, according to the index, which looks at how European cities support “digital entrepreneurship.”

Amsterdam has many claims to fame, but one of its lesser-known features is its concentration of 350 fintech companies, more notably in the payments (Adyen, Payvision, GlobalCollect), trading (BinckBank, Flow Traders) and alternative finance (Funding Circle, Spotcap) spaces.

European Investors Elect Favorite Projects as Prêtons Ensemble Launches New €200 Million Digital Lending Fund (Crowdfund Insider), Rated: A

The asset management firm Eiffel Investment Group which manages the €100 million marketplace lending fund “Prêtons Ensemble” (meaning “Let’s Lend Together”) for institutional investors Aviva France, AG2R LA MONDIALE, MAIF, MGEN and Klesia awarded European Digital Lending Awards at a gathering held in Paris on February 1st. The awards recognized SME projects presented on the lending platforms backed by the fund.

Nominated platforms included leaders such as Funding Circle and Lendix. The prizes however went to smaller marketplaces, a good opportunity to put the spotlight on these up-and-coming fintechs:

  • Green Economy award: Générale du Solaire, a project presented on Lendosphere, France.  
  • Job creation award: Metalliance on Wesharebonds, France.  
  • Innovation award: Selfstock on ClubFunding, France.  
  • Quality of Life award: All About Healthcare on Linked Finance, Ireland. Linked Finance is Ireland’s largest P2P lending platform with more than 16,000 registered lenders who have lent over €32 million to Irish businesses
  • Inclusive Economy: Mujeres y CIA on Finanzarel, Spain, and
    Nou verd and Nou set on Loanbook, Spain.  
  • Best pivot: Sky Hero on Look & Fin, Belgium.  
International

Senmiao Technologies Proposes Terms For $ 14 Million U.S. IPO (Seeking Alpha), Rated: AAA

Senmiao Technology (AIHS) intends to raise $14 million in a U.S. IPO by selling 3.25 million shares at between $4.00 to $4.50 per share.

According to a 2017 research report by the World Federation of Direct Selling Associations, the global direct selling volume increased by 1.9% in 2016, reaching $183 billion in sales between 107 million direct sellers.

In 2014, 45% of direct selling volume came from the Asia Pacific region and grew to 46% in 2015 – 2016, as the chart below shows:

Source: Seeking Alpha

According to management, ‘there are approximately 40 lending platforms in Sichuan province.’ Major competitive vendors that provide similar services include:

  • Sichuan Jinding Wealth Information Technology
  • Koudai Network Services
  • Chengdu Hongxue Jinxin Business Consulting
  • Chengdu Zhongke E-Commerce Co

Revenue ($)

  • Six months ended Sept 30, 2017: $182,960
  • FYE March 31, 2017: $73,237

Operating Loss ($)

  • Six months ended Sept 30, 2017: ($671,729)
  • FYE March 31, 2017: ($185,535)

Operating Margin (%)

  • Six months ended Sept 30, 2017: Negative
  • FYE March 31, 2017: Negative

Cash Flow from Operations ($)

  • Six months ended Sept 30, 2017: $302,568 cash flow used in operations
  • FYE March 31, 2017: $1,324,449 cash flow from operations

As of Sept 30, 2017, the company had $76,863 in cash and $736,246 in total liabilities.

(Source: Senmiao S-1/A)

 

Exclusive Interview with FintruX CEO Nelson Lin (Chipin), Rated: A

FintruX is an established online lending platform that is introducing blockchain into its financial network to better serve both kinds of customers.

Nelson. Thanks for joining us today. Can you tell us more about yourself and FintruX?

I am the founder and CEO of FintruX and also Robocoder. Robocoder provides the technology behind Fintrux.

FintruX is a global peer-to-peer (P2P) lending platform on the Ethereum blockchain network for providing unsecured loans. It connects small businesses who need money for cash flow issues, with lenders who want to earn a better return on their money.

In some ways, tokenized P2P lending platforms is a “killer app” for the blockchain technology. We are pretty sure you would agree, but can you elaborate and in the context of what you are trying to do.

All the current monetary transactions require too many intermediaries to facilitate a simple transaction from end-to-end and the process itself is also inefficient and time-consuming. Furthermore, most of the systems are fragmented, inconsistent and usually require extensive human intervention. Finally, such transactions require numerous touch-points to handle and manage the “trust” between all of the parties involved. Our mission is to make trustless financing a no-brainer for both borrower and lender.

What is the biggest problem within the industry or do you think there is a gap in the market for FintruX to fill?

The biggest problem is that small and startup businesses do not have sufficient credit history or access to capital for their short-term cash flow needs. Furthermore, the traditional systems are inadequate, fragmented, inconsistent, labor intensive and involve lots of intermediaries. There are many P2P lending platforms in existence but they do not talk to each other.

Australia

Global tech giants will threaten bank tax receipts (Financial Review), Rated: A

The $14 billion in taxes the federal government receives each year from the banking sector could be eroded by global technology companies including Apple capitalising on policies designed to boost competition in the sector, the chief executive of the Australian Bankers’ Association, Anna Bligh, will warn on Thursday.

In its half-year results presentation on Wednesday, Commonwealth Bank, the country’s second largest taxpayer, pointed to the $2 billion of taxes it pays to contribute to the economy. This contrasts to many of the global tech players, who book little profit in Australia despite huge sales, and therefore pay much less tax.

India

Credit is here to stay, new lenders beyond banks to play bigger role (money control), Rated: A

Emerging as an alternative to mainstream banking, NBFCs have also been playing an important role in bridging the credit gaps, i.e. in meeting the increasing financial needs of the underserved and unbanked areas in the corporate sector, unorganized sector and also for the local borrowers.

According to the Reserve Bank of India, in January 2017, a total of 28.8 million credit cards were in operation. Credit cards, also known as revolving credit, have been the preferred choice of masses as it enables repetitive use for daily purchases that can be paid back in instalments on a monthly basis.

According to PwC research, over 95% of financial services incumbents seek to explore FinTech partnerships.

MENA

A year when new innovations show up in Dubai realty (Gulf News), Rated: AAA

In the UAE, we are seeing some significant strides, where one technology-driven real estate crowdfunding platform, Smart Crowd, recently received approval from the Dubai Financial Services Authority to establish the region’s first regulated real estate crowdfunding platform. This will enable any individual to invest and own a piece of UAE property for as little as Dh5,000 and will most likely stimulate sales in the secondary market.

Canada

Business loans: Which one works for you? (Bankless Times), Rated: A

Source: Bankless Times
Bermuda

Trunomi Closes $ 3.5 Million Round from CloudScale Capital (Finovate), Rated: AAA

Consumer consent and data rights company Trunomi closed a $3.5 million round of funding today. This investment brings the Bermuda-based company’s total funding to $10.5 million.

Authors:

George Popescu
Allen Taylor

Financing Life’s Most Important Moments

LendingUSA

Camilo Concha’s experiences in building specialized online platforms taught him that there was a need to place potential clients and patients with the right professional for their situation, but there was also the need to help them finance their legal and medical bills. That’s when he started the two specialty companies mylegalloan.com and medicalfinancing.com. His […]

LendingUSA

Camilo Concha’s experiences in building specialized online platforms taught him that there was a need to place potential clients and patients with the right professional for their situation, but there was also the need to help them finance their legal and medical bills. That’s when he started the two specialty companies mylegalloan.com and medicalfinancing.com.

His ability to diagnose market needs and find viable, simple solutions brought about his latest, largest, and boldest venture yet, LendingUSA.

Prior to the 2015 founding LendingUSA, Concha attended a LendIt conference where he learned how to build a better platform. He connected with Cross River Bank, which now does all of the company’s loan licensing, and First Associates, who services the loans. He also connected with Howard Freedland. Freedland, in turn, brought Brandon Ross, CEO and founder of Direct Lending Investments, and the two partnered with online lenders to add $55M USD in debt capital to the $5M Concha had raised in equity funding. That $60M is the only funding the company has seen to date, and Concha says that it was possible to raise that amount due to the company’s $1B in loan application flows.

LendingUSA Continues Concha’s Successful Run

Simplicity is evident when we look at how LendingUSA got off the ground. “We basically built an underwriting model and started lending,” Concha said. Working with doctors and merchants at the point of sale (POS), the company has developed a strong vantage point, being able to offer their product to consumers who can’t or don’t want to do longer term financing.

Much of the client base is comprised of people who want to get elective medical procedures, such as liposuction, which are not covered by insurance. LendingUSA makes a loan to the customer but pays the amount straight to the doctor.

Loan pricing is set into the business model, and it is based on a credit profile, which includes credit score, debt-to-income ratio, and credit sought in the last six months. FICO scores are also a factor, but just one of the important things, with the company also assessing whether customers are maxed out on their credit and if they’re paying their bills. Risk assessment is measured by an algorithm, a process that allows the customer to be approved or declined on the spot.

Being a POS lender provides many benefits to the LendingUSA business model. Beginning the process with the provider, rather than the borrower, referrals come from the providers themselves, whether through an advisory role or by way of brochures available in providers’ offices. Providing loans at this point allows LendingUSA to offer financing in installment loans where other companies tend to deal in lines of credit. This allows the company to go higher on the credit scale than would be possible with lines of credit and to also go a little lower on the credit spectrum, as far as 620. Installment loans also prove more beneficial to the borrower as risk goes down every month.

The company charges a fee at the POS depending on their risk evaluation, and the merchant fee for these services usually runs about five to six percent.

LendingUSA’s Performance

During LendingUSA’s growth, the company has also acquired 30 branded websites including bridalloans.com, surgeryloans.com, petloans.com, and dentalloans.com. In all, the company currently does business with 3,700 different medical providers.

Working with customers who have an average credit rating of 682, the company currently has a loan volume in the neighborhood $225M. The average loan is $6K with an average interest rate of 22% and an annualized charge off rate of about 8-10%.

Choosing to focus on “life’s important moments,” LendingUSA focuses on “niche markets we think we can win in,” counting elective medical, dental, cosmetic surgery, chiropractic, pet loans, and funeral loans among the diverse group of industries it works in.

Competition and Customers

Concerning the competition, Concha shows another reason why he has proven successful in that he doesn’t worry himself with concerns about what other companies are doing, choosing to focus on what his is doing. “I don’t like to call it competition,” he said. “There are great companies like Care Credit, Affirm, and Green Sky that do similar things, but they work in other niche markets or do it differently by providing revolving lines of credit. We have our little niche and are a better fit for some people, [especially in that] installment loans are better for large amounts of revenue, and lines of credit better for smaller amounts.”

The typical LendingUSA customer is someone in their 40s and 50s who makes $60K to $80K a year. “We believe that a lot of people want to improve their lives,” Concha said. “Our customers are gainfully employed, but they don’t have the means to get the product they want. We make it available to them.” In doing so, the company provides a great service for their merchant partners by helping them to capture more clients and generate more revenue.

LendingUSA’s Goals and the Direction of the Industry

“Our initial goal was to reach $1B in sales in the next three to four years,” Concha said. “We’re looking to price loans better, securitize loans, and find new capital partners.”

Concha is positive about these goals as the cosmetic surgery and elective medical fields are growing every year. The growth is underscored by the fact that men are now gravitating toward cosmetic surgery, when the thought was taboo in the past. These procedures are now more generally accepted for men. He also says that fears of economic downturns, which might stunt growth in other industries, are less of a concern. “People still want to feel good about themselves; they might not buy a new house or car, but they want to look good,” Concha said.

LendingUSA’s Team and The Future

Concha considers himself fortunate enough to have built a strong team. This includes Mike Testa, the company president and the former president of Care Credit, who built a POS business in the medical industry from $80M to $6B; Sharad Shankar, the former chief risk officer of Lending Point, who now holds that title with LendingUSA; and
Jenann Shemisa, LendingUSA’s chief compliance officer, who served as a senior attorney for the enforcement division of the FDIC.

Understandably pleased with what he has built in less than three years since founding LendingUSA, Concha says the company is now focused on loan performance. “Because we’re at the POS, we’re able to compete more on service than on price. This means we can charge a little more, which allows our portfolio to perform at 500 basis points better on yield than most marketplace lenders. Everybody that advertises on LendingTree and online comparison sites is competing on price, which doesn’t help portfolio performance. By working at the POS, we get better yields because we’re not competing on price.” With this focus, the company has a goal of being number one in the markets it services.

Concha’s Past Comes Back to Reward Him

Concha came to the U.S. from Colombia with his family when he was 14. It only took him seven years to go from being a school boy who spoke little English to starting his first business, which he ran while he studied at California State University, Northridge and worked as a Spanish interpreter at the San Fernando Bar Association.

Seeing the desperate need for an attorney referral service, he founded the Attorney Search Network (ASN), which he ran out of his apartment until he could afford to pay for his first office space, a converted janitor’s closet that was so small he had to speak with clients in the hallway.

Concha then saw that he could create other companies to fulfill similar voids in different fields. This brought about the founding of 1800mysurgeon.com, created to help assist individuals who are looking for a board-certified and reputable cosmetic surgeon.

Concha now works out of one of the tallest buildings in the San Fernando Valley, employs dozens, and the two companies together have extensive databases with hundreds of doctors and lawyers from every legal and medical field. Add to that the lending businesses he has founded and he has quite the legacy. All of them are still growing strong. There’s nothing her to suggest that LendingUSA won’t maintain a similar trajectory.

Author:

Written by Paul Keenan.

Wednesday December 13 2017, Daily News Digest

Wednesday December 13 2017, Daily News Digest

News Comments Today’s main news: Court dismisses case against OCC Fintech Charter. Affirm’s valuation confirmed at $1.75B. RateSetter Australia reaches $200M milestone. SoftBank invests $450M into Compass. Starling Bank expected to profit in 2019. Linked Finance launches P2P lending pension accounts. ID Finance raises $85M through ETF bonds. Today’s main analysis: TransUnion reports on consumer credit markets. Today’s thought-provoking articles: What […]

Wednesday December 13 2017, Daily News Digest

News Comments

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United Kingdom

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International

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India

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News Summary

United States

Court throws out New York regulator’s suit against OCC fintech charter (American Banker), Rated: AAA

A New York District Court judge threw out a lawsuit by the New York Department of Financial Services that sought to block the Office of the Comptroller of the Currency’s attempted fintech charter, saying the charter doesn’t exist yet so the suit is premature.

Lending startup Affirm valued at $ 1.8 bln in latest financing round (Business Insider), Rated: AAA

Silicon Valley lending startup Affirm said on Monday it has raised $200 million in a fresh round of funding, boosting prospects as the firm aims to go after the market for millennial shoppers needing loans.

The new financing put Affirm’s total fundraising to date at about $450 million, and increases its valuation to $1.75 billion, according to a source with knowledge of the matter.

Max Levchin On What Comes After $ 200M Worth Of Capital Affirmation (PYMNTS), Rated: AAA

The CEO with the measured response is PayPal co-founder Max Levchin, who told Karen Webster that with any capital raise of size, the temptation is to believe that “it is a big victory and it is validation … but all it really is, is a temporary tally of how far you have gone.”

He noted that with big investments come big responsibility (and Affirm has raised roughly $450 million to date), as he remarked that there is the implicit end goal of taking the money and parlaying vision and strategy into strong returns on that cash.

Affirm says that its retailers report that consumers who use Affirm leave with a basket size 75 percent greater than those who don’t use Affirm to pay for their purchases, and enjoy site-wide conversion rates as much as 20 percent higher, with revenue per visitor lifts of more than 10 percent.

Doing customers wrong allows your competitor to make things right (American Banker), Rated: A

Consider Affirm, a startup that offers consumers installment loans for individual purchases and markets the loans as a simpler and more honest financing alternative — a message that is clearly targeted at consumers who are frustrated by a perceived lack of transparency in the costs associated with using credit cards. This message appears to be resonating in the market; Affirm is processing relationships with more than 1,000 internet retailers and is reportedly working with Walmart on a pilot project.

In an interview with American Banker, Douugh founder and CEO Andy Taylor said: “When we dug deeper, we realized the consumer debt levels are out of control. Big banks are running off legacy business models that are driven to keep customers within these debt cycles. They’re not properly incentivized to foster financial wellness.”

Affirm, Marcus and Douugh are all basing their strategic direction on a simple but powerful insight: There is a difference between the way many consumers use credit cards and the way that those consumers should use their credit cards in order to maximize their financial wellness.

Retailers now offers Instaloans to pay for purchases (ABC30.com), Rated: A

A growing number of major retailers offer shoppers instant loans to pay for your purchases.

But how do they work? And are they better than credit cards?

Each lender may be slightly different, but typically: you give basic information, decide the length of the loan -usually anywhere from three to twenty-four months and in less than a minute you’ll know if you’re approved.

Prosper Appoints Former J.P. Morgan Chase CMO Claire Huang to Board of Directors (Crowfund Insider), Rated: AAA

Peer-to-peer lending platform Prosper announced on Tuesday it has appointed former Chief Marketing Officer of J.P. Morgan, Claire Huang to its board of directors. According to Prosper, Huang has held senior leadership positions at various well-known financial services companies, which includes Bank of America, Fidelity Investments, and American Express.

OnDeck Adds Former GE Capital and SunTrust Executives to Finance Team (PR Newswire), Rated: AAA

OnDeck (NYSE: ONDK), the leading online lender to small business, today announced the hiring of two senior financial services executives to join its management team. Kelly Merrill and Erich Wust will assume new leadership roles that directly support OnDeck’s mission of empowering small business owners with the fastest and most flexible credit solutions.

Kelly Merrill joins OnDeck as the Senior Vice President for Finance, where she will help lead the company’s short-term and long-term financial planning initiatives. Merrill brings over a decade of finance experience to OnDeck from GE Capital, where she played a leading role in developing and executing the disposition strategy for GE Capitals’s $200 billion balance sheet.  Previously, Merrill was the Chief Financial Officer (CFO) of GE Capital Real Estate, where she led a team of more than 50 employees.

Erich Wust has been appointed as the Senior Vice President for Portfolio Management at OnDeck. He will be responsible for managing portfolio credit strategies, balance sheet optimization and other components of the company’s loan portfolio. Wust joins OnDeck after more than a decade in credit and risk leadership roles at SunTrust Bank.

Compass gets $ 450M from SoftBank; real estate portal now valued at .2B (TechCrunch), Rated: AAA

Less than a month after raising $100 million led by Fidelity, real-estate startup Compass is striking while the iron is hot. The company has now picked up an even bigger investment of $450 million, this time from the SoftBank Vision Fund, plus another $50M in secondary deals, to fill out a vision of its own: taking its real estate rental and sales platform global.

New York-based Compass is now valued at $2.2 billion post-money, up from $1.8 billion just four weeks ago, with $775 million raised to date.

Consumer Credit Market Expected to Remain Strong in 2018 Even in a Rising Rate Environment (NASDAQ), Rated: AAA

In spite of rising interest rates, the U.S. consumer credit market is poised to perform well in 2018, with well-managed delinquencies and continued wide access to credit across all products. TransUnion’s (NYSE:TRU2018 consumer credit forecast found that expected increases to GDP, personal income, total employment and the Housing Price Index, among other factors, will outweigh potential negatives such as increasing interest rates and slowing vehicle sales.

5-Year Trends: Serious Borrower-Level Delinquency Rates for Key Credit Products**
Credit Product Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018* PCT Change in Last 5 Years (2013-2018)
Auto Loans  

1.23

%  

1.19

%  

1.27

%  

1.44

%  

1.43

%  

1.46

%  

+18.7 %

Credit Cards 1.60 % 1.48 % 1.59 % 1.79 % 1.86 % 1.96 % +22.50 %
Mortgage Loans 4.31 % 3.40 % 2.46 % 2.28 % 1.83 % 1.65 % (-61.7%)
Unsecured Personal Loans 4.01 % 3.73 % 3.62 % 3.83 % 3.37 % 3.36 % (-16.21%)
*Projections; **Serious mortgage, auto loan and personal loan delinquencies are defined here as those with payments 60 or more days past due. Serious credit card delinquencies are defined as those with payments 90 or more days past due. 

Inside the Mortgage Forecast

60-Day+ Mortgage Delinquency Rate and Average Mortgage Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
7.16% 6.65% 6.15% 5.38% 4.31% 3.40% 2.46% 2.28% 1.83% 1.65%
$190,324 $186,488 $185,594 $184,753 $187,228 $187,311 $189,914 $194,415 $200,935 $205,534
*Q4 2017 and Q4 2018 include projections

Inside the Credit Card Forecast

90-Day+ Credit Card Loan Delinquency Rate and Average Credit Card Loan Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
2.97% 2.17% 1.90% 1.75% 1.60% 1.48% 1.59% 1.79% 1.86% 1.96%
$6,043 $5,609 $5,485 $5,371 $5,324 $5,329 $5,337 $5,486 $5,626 $5,675
*Q4 2017 and Q4 2018 include projections

Inside the Auto Finance Forecast

60-Day+ Auto Loan Delinquency Rate and Average Auto Loan Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
1.59% 1.27% 1.11% 1.15% 1.23% 1.19% 1.27% 1.44% 1.43% 1.46%
$14,922 $15,031 $15,377 $16,061 $16,781 $17,456 $18,004 $18,391 $18,588 $18,694
*Q4 2017 and Q4 2018 include projections

Inside the Personal Loan Forecast

60-Day+ Personal Loan Delinquency Rate and Average Personal Loan Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
4.98% 4.78% 4.20% 3.93% 4.01% 3.73% 3.62% 3.83% 3.37% 3.36%
$6,650 $6,138 $5,895 $5,904 $6,247 $6,741 $7,360 $7,640 $8,066 $8,461
*Q4 2017 and Q4 2018 include projections

Why JPMorgan, Amex, HSBC are backing ‘isolation’ web browsing (American Banker), Rated: AAA

Often users are tricked by phishing emails that mimic a legitimate note from the boss or a senior corporate leader. And the links and sites can look secure. According to PhishLabs, nearly 25% of all phishing sites in the third quarter were hosted on HTTPS domains — almost double the rate of the previous quarter.

As part of their effort to deflect these attacks, some banks are turning to isolated browsing, or remote browsing, technology. Such systems force all internet activity to happen in a protected space on the cloud, preventing malicious code from reaching a company’s network. The technology is not brand new, but it is starting to gain traction as some large banks have finished their testing of it and are going public with their use of it.

JPMorgan Chase, American Express and HSBC announced Monday that they are leading a $40 million round of funding in the isolation-tech provider Menlo Security, bringing its total funding to $85 million.

Source: American Banker

 

Niche lending and fintech cross paths in Silicon Slopes (Utah Business), Rated: A

There are, however, entire demographics not serviced by tried-and-true lending institutions. Often, these folks’ credit score fails to meet a bank’s minimum standards. Or they need unconventional terms on an equipment or business loan. Whatever the reason, these transactionally marginalized sectors find themselves at the mercy of high-interest lenders. Or with no access to capital at all.

“There is a significant population of U.S. consumers who can’t get a loan,” notes Nate Heward, CFO at Acima Credit, a company that provides a point-of-sale credit platform.

Capitalism abhors a void

From the ubiquitous strip mall payday lender to the world of microfinance, a plethora of entrepreneurial solutions has emerged to get cash in the hands of would-be borrowers cut off from other avenues. These alternative lending practices have various degrees of reputability; a wide spectrum exists between the purely predatory lending shop, on the one hand, and the creative value-adding venture, on the other.

Scratching the consumer itch

In practical terms, Acima asks four simple questions of the would-be borrower:

  1. Do you have a three-month history with your current employer or source of income?
  2. Do you deposit $1,000 or more into your checking account each month?
  3. Have you had a checking account for at least 90 days?
  4. Is your checking account free from NSFs, excessive overdrafts and negative balances?

It’s all fintech

The companies profiled in this article may not be considered fintech firms per se; they’re not using technology to create a new financial paradigm a la Paypal, Indiegogo or Coinbase. They’re merely offering tried-and-true solutions to untapped consumer markets. Viewed from another angle, however, they’re fintech companies through and through. Acima, Progressive, et al are racing to deliver the most convenient financial solutions to the most people in their target customer base. And to do so, they’re relying on technology all the way.

Finance teams are ‘bottlenecking’ banks’ digital transformations (Tearsheet), Rated: A

Banks are working hard to beef up their technology and innovation teamsembrace agile developmentand move to acting like digital companies, but bank finance departments still do a lot of manual work and will start to hold their companies back from becoming digital entities. Finance teams are the control functions and scorekeepers of an organization, but if they can’t process data at the same speed as the rest of the organization they could slow down the speed of company mergers or product rollouts when competing transactions are already taking place.

Royal Business Bank Invests $ 500K in Lendistry Loan Fund, Providing Opportunity for Small Businesses in Underserved Communities (Digital Journal), Rated: A

Royal Business Bank, a wholly-owned subsidiary of RBB Bancorp, has made a $500K commitment to the Lendistry CRA Loan Fund I. Launched at a time when most banks were struggling, Royal Business Bank has been successfully serving the Asian-American community since 2008. While specializing in businesses engaging in trade with Pacific Rim countries, the bank also offers small business loans and residential mortgages.

First financial industry brief filed in CFPB English v. Trump case (Ballard Spahr Email), Rated: A

This afternoon (LT Editor: December 12,2017) the Credit Union National Association (CUNA), represented by Ballard Spahr’s Alan Kaplinsky, filed the first amicus brief from the financial industry in the English v. Trump litigation over who will succeed Richard Cordray as the head of the Consumer Financial Protection Bureau. CUNA supports the President’s authority to appoint an acting director.

Lawsuit: Trump appointee Mick Mulvaney has ‘no more right’ to lead CFPB ‘than Santa’ (Washington Examiner), Rated: A

A new federal lawsuit says President Trump’s “plainly illegal” appointment of Mick Mulvaney to be acting director of the Consumer Financial Protection Bureau must be reversed in favor of Leandra English, who also claims the title.

Ilann Maazel, an attorney for the Lower East Side People’s Federal Credit Union, told the Washington Examiner that the credit union is suing because of the feared effect of Mulvaney policies.

The legal dispute centers on whether the 2010 Dodd-Frank financial reform, which set up the CFPB, makes the deputy director the acting director if there’s a vacancy, or whether the older Federal Vacancies Reform Act gives the president that power.

US Bank sees success with Zelle (Business Insider), Rated: A

US Bank integrated Zelle — which has over 30 other banking partners like Bank of America (BofA), JPMorgan Chase, and Citi — last year. The bank saw a 104% increase in Zelle transactions in the past four months, and a 50% increase in customer enrollment in the P2P offering during that time.

Source: Business Insider

To compete with big tech firms, banks need big-tech talent (American Banker), Rated: A

Nine years ago, D.J. Patil and Jeff Hammerbacher coined the term “data scientist.” Four years later, Patil and Thomas Davenport deemed the profession “the sexiest job of the 21st century” in the pages of Harvard Business Review.

For banks, this imbalance is particularly challenging at a time when the industry is increasingly vying for the same talent the tech giants are aggressively courting. To stay competitive, the financial services industry must defend against a new cast of competitors by changing how it attracts, hires and develops data science talent.

 

BitGo Raises $ 42.5M in Series B Funding (Finsmes), Rated: A

BitGo, a Palo Alto, CA-based company which makes digital currencies usable for businesses in a regulated economy, raised $42.5m in Series B financing.

The company intends to use the funds to accelerate enabling businesses to integrate digital currencies into their existing financial systems.

AI 100: The Artificial Intelligence Startups Redefining Industries (CB Insights), Rated: A

Source: CB Insights

5 Promising Early-Stage Startups to Watch (Tech Startups), Rated: B

Throtle is a 2nd generation data onboarding company focused on deterministic matching, identity resolution and closed loop enablement, powering brands and companies with their omnichannel marketing efforts.

Affirm is a San Francisco-based financial service startup that offers installment loans to consumers at the point of sale. Its aim is to improve the banking industry to be more accountable and accessible to consumers.

Homebuying With Alternative Credit (Microbilt), Rated: B

Source: Microbilt
United Kingdom

Digital challenger Starling to hit profit in 2019 says founder Anne Boden as European expansion takes crucial step (City A.M.), Rated: AAA

Digital-only challenger bank Starling will “definitely” be in profit by the end of 2019, its chief executive told City A.M., as it announced a major step in its plans for European expansion.

The bank will today announce it has become a direct member of the single euro payments area (Sepa), which allows credit transfers, direct debit and card payments in euros across the whole of the EU.

Crowdfunding a mission to save capitalism from itself (Financial Times), Rated: AAA

Jeff Lynn is on a mission to save capitalism from itself at a time when millions feel locked out, and unable to foresee themselves better off than their parents. His answer: to democratise capital.

That is one reason he founded Seedrs, an online platform through which individual investors can buy shares in high-growth companies at an early stage — a privilege once reserved for institutions and private equity funds. The other reason was to make money.

Seedrs, which along with Crowdcube dominates the UK market, has funded more than 540 deals, representing £280m of investment. Some were follow-on rounds, and in total about 400 companies have been funded. About 20-30 companies are live on the site at any time.

Crowdfunding by numbers

Critics say a big difference between crowdfunding and the stock market is liquidity — you cannot just sell your stake. But Seedrs has begun a secondary market and says it has had several exits already.

Free Agent, a Scottish maker of accounting software, floated in November 2016 at 87p. Its shares remain below the 100p Seedrs investors paid, though some sold when it hit 140p this year. Chapel Down, a vineyard, was already quoted on the Nex exchange (formerly ISDX) when it raised money at 28p a share in October 2014. It has been trading around three times that level.

China

SenseTime Raises US$ 410M Series B Financing (Finsmes), Rated: A

SenseTime, a Chinese artificial intelligence company focused on computer vision and deep learning technologies, raised US$410m series B1 B round of financing.

SenseTime has powered many industries such as finance, security, smart phone, mobile Internet, robotics, and automobile with core computer vision technologies including face recognition, video analysis, character recognition, and autonomous driving.

European Union

Linked Finance Launches New P2P Lending Pension Accounts (Better Business), Rated: AAA

Irish peer-to-peer lending company Linked Finance has launched a new type of account that allows holders of self-administered pensions to make P2P lending to Irish SMEs part of their pension investment portfolio.

With net returns of between 7 and 8.5 per cent, 24/7 online account access, complete control of lending activity, and monthly repayments of principal & interest, P2P lending is becoming an attractive asset class for a growing number of investors.

Mobile bank N26 partners with crowd-lending platform Younited Credit in France (Telecompaper), Rated: A

European start-up N26 has expanded the range of its banking services on offer in the French market via a partnership with Younited Credit, a fintech start-up specialising in short-term loans and crowd-lending.

The Advantages of #Peer-to-Peer Lending (EU Reporter), Rated: A

For many years, if someone wanted a loan, they would have to apply for one through a bank. Before they received that loan, the bank investigated their credit and decided what the rate of interest would be applicable.

However, there is another way to get a loan without worrying about a low credit score or high interest rates. This is peer-to-peer lending or P2P. Through peer-to-peer lending platforms, individuals can invest their money in other individuals, with an interest rate that the two groups have agreed is fair.

Hungarian fintech secures EUR 6 mln in Czech funding (Portfolio.hu), Rated: A

The investor will first acquire a 20% stake in Barion, which is active in online and mobile payments, for EUR 2 mln.

Finnish Crowdfunding & P2P Lending Platform Fellow Finance Receives Payment Institution Authorization (Crowdfund Insider), Rated: B

Finnish crowdfunding and peer-to-peer lending platform Fellow Finance announced on Tuesday it received payment institution authorization from the Financial Supervisory Authority of Finland. The online lender claims it is the first funding platform to receive this type of authorization, which will notably enable Fellow Finance to provide new services to its consumer and corporate customers, to expand its services further in Europe and to utilize the new payment service directive (PSD2) in the development of Fellow Finance service.

With Norrsken House, ex-Klarna executive envisions a global network of co-working spaces focused on impact (TechCrunch), Rated: A

He launched the Norrsken Foundation later that year with about $20 million of his own money. By early 2017, the first fruits of that funding took shape with the opening of Norrsken House, a co-working space in Adalberth’s hometown of Stockholm dedicated to companies that are developing technologies that have a social impact.

Now, Adalberth has committed an additional $62 million of his own money to expand that vision. The goal, he said, is to eventually create a network of 25 impact-focused co-working spaces and foundation hubs around the globe in the next 10 years. The first Norrsken House has 112 companies in it and seven have received direct investment from the Norrsken Foundation’s fund (more on that in a bit).

International

ID Finance raises $ 8.5m via exchange-traded bonds to support growth (Finextra), Rated: AAA

ID Finance, the emerging markets fintech company, today announced successful completion of its first issuance of exchange-traded bonds.

The company raised $8.5m from the bond registered in Russia and listed on the Moscow Exchange. It was the first tranche of a $170m bond issuance programme that the company plans to support global expansion.
The bond, which was oversubscribed, has a maturity period of three years and a quarterly coupon payment frequency.

Banks, fintechs and a Brit royal to build green-lending blockchain (American Banker), Rated: A

Could fintech help the planet cope with climate change?

Some major players — Prince Charles; bankers from Barclays, Standard Chartered, and BNP Paribas; three fintechs; and professors from the University of Cambridge — all hope the answer is yes.

On Tuesday at the One Planet Summit in Paris, they are expected to announce they are developing blockchain technology that lets banks see which potential borrowers use environmentally sustainable practices and therefore are worthy of preferential lending terms. Such disclosures presumably would put pressure on companies to pollute less.

Australia

RateSetter’s Australian business hits $ 200m milestone (AltFi), Rated: AAA

RateSetter Australia has hit the AUD$200m mark in lending a little over three years removed from launching down under. The platform, which lends to both businesses and individuals, has doubled its lending volumes over the past six months.

Interestingly, 56 per cent of its investors withdrew money from bank savings accounts in order to divert them into the platform, while a further 17 per cent reallocated money from bank term deposits. The greatest proportion of the platform’s investors are millennials, at 58 per cent, although they invest the least amount of money on average of any age group at $9,454. Retirees (aged 65 and over) by contrast invest an average of $66,118.

India

Understanding the Data Protection White Paper Part XI: Establishing proper deterrent consequences for privacy violations (Tech 2), Rated: AAA

This article is Part 11 of a multi-part series explaining the recently issued white paper on data protection in India. You can read Part 1Part 2, Part 3Part 4Part 5Part 6Part 7Part 8Part 9 and Part 10.

Consider also the case of Sitesearch in the US, where the company bought payday loan applications and sold them to third parties, which included fraudsters, who used the data to steal more than $25 million from user accounts. Such careless buying and selling off of data should not be justifiable in the name of consent. While safeguards such as requiring that companies transfer data to only to companies with a comparable level of privacy provisions help, these must be backed up by huge penalties for violations.

For example, consider the Equifax data breach, the breach of a credit information company, leading to the loss of crucial data of over 143 million Americans. This breach was the result of a vulnerability in their web application software, a vulnerability that was discovered and for which a patch had been issued at least 2 months before the actual hack. The breach of this crucial data was thus the result of negligent, or non-implementation of the patch.

A landmark privacy judgment in India is the Canara Bank case, which struck down a provision in a law, which allowed the authorisation of ‘anyone’ to conduct investigations and demand the production and seizure of documents, including bank documents. Such a wide delegation of powers can allow any and everyone, even unscrupulous actors, permission to gain access to confidential data, which should not be allowed.

This case draws attention to an important aspect of data protection — it must be ensured that investigations, at all times, must be authorised, and by authorised personnel only. Any violations, or even exceeding of powers must be punishable.

Asia

8Percent leverages power of platform (Korea Herald), Rated: A

Companies that have used the 8Percent platform include Korea’s leading vehicle-sharing app operator Socar, solar energy firm S-Power and restaurant chains Power Plant and The Booth.

For example, a P2P investor into Socar was given a 1-hour free-driving offer each month for a year, until the loan matured. The offer was part of a return to about 600 retail investors, who lent a combined 1.3 billion won ($1.19 million) to the car-sharing firm in July 2015.

Vouchers for restaurants, such as Power Plant and The Booth, were given as rewards to investors.

According to a December estimate by 8Percent, three-fourths of investors, who offered an accumulated 97.7 billion won in loans, were from metropolitan areas — either Seoul or Gyeonggi Province — while those in their 20s or 30s accounted for over three-fourths of investors. The investors, without tax being deducted, are offered on average 9.78 percent interest for investments.

Some 65 percent of its borrowers — about 5,000 – had a credit rating between 4 and 6 on the scale of 1 to 10.

MENA

Crowdfunding real estate: a new reality booming? (Gulf News), Rated: AAA

Similarly, online REITs use online platforms and digital technology to enable wider access to REITs and quicker dissemination of REIT information. This allows mass participation and broader wealth distribution.

The ticket size to crowdfund a $1-billion airport is not exactly for everyone. However, a three-bedroom apartment in Mumbai, Manchester or Dubai Marina jointly owned by a hundred individuals sounds realistic. It also helps diversify risks for investors.

Smart Crowd is a crowdfunding platform, very different from an online REIT. The company believes it can enable anyone with Dh5,000 in savings to enter the Dubai property ladder. Its platform is awaiting final regulatory approval from the Dubai Financial Services.

Israel

MK Rachel Azaria threatens banks with P2P legislation (Globes.co.il), Rated: AAA

MK Rachel Azaria, chair of the Knesset Reforms Committee (officially known as the Special Committee on the Planning and Building Bill and the Maternity Leave and Parenting Bill) did not like the draft circular released by the Bank of Israel on regulating the relationship between the banks and the digital peer-to-peer (P2P) lending platforms on Sunday.

Azaria is now threatening to promote legislation that will regulate relations between the banks and the platforms, but this appears to be designed to pressure the Bank of Israel to publish new, more focused guidelines .

South America

Creditas Raises $ 50M in Series C Funding (Finsmes), Rated: A

Creditas, a Sao Paulo, Brazil-based digital secured loan platform provider, raised $50m in Series C funding.

Authors:

George Popescu
Allen Taylor

Tuesday December 12 2017, Daily News Digest

P2P investors

News Comments Today’s main news: Affirm raises $200M at almost $2B valuation. Elastic Line of Credit surpasses $1B in funding. Klarna signs 500 online retailers in U.S. Zopa makes changes to Isa. Mintos adds first Russian loan originator. Flexiti offers online financing for e-tailers in Canada. Today’s main analysis: UK alternative finance is still healthy. Today’s thought-provoking articles: Cross River […]

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United States

United Kingdom

China

International

Asia

Russia

Africa

Canada

News Summary

United States

Max Levchin’s Affirm raises $ 200 million at a nearly $ 2 billion valuation (TechCrunch), Rated: AAA

The San Francisco-based company confirmed that it’s raising $200 million, led by GIC, a Singaporean sovereign wealth fund. Existing investors Khosla Ventures and Spark Capital are also participating.

Affirm’s valuation is estimated to be between $1.5 billion and $2 billion, as first reported by The Wall Street Journal. Investors are betting on Max Levchin, the PayPal co-founder who runs Affirm.

Elastic Line of Credit Surpasses $ 1 Billion in Total Funding (Morningstar), Rated: AAA

Elevate Credit, Inc., a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the Elastic product has originated more than $1 billion, and has served over 200,000 customers since 2013.

Elastic, a bank-issued line of credit offered by Republic Bank & Trust Company (“Republic Bank”), currently has more than $260 million in total principal outstandings across over 150,000 open accounts.

Klarna North America Sees Surge In U.S. Merchant And Consumer Adoption Of Its ‘Smoooth’ Financing Solution (Business Insider), Rated: AAA

Since Klarna introduced its financing solution in the U.S. in October 2016, 500 online retailers have already enrolled in the simple and ‘smoooth’ credit solution that is fully integrated into the online checkout process. Available in 10 countries via a single API, retailers include powerhouse global brands like Microsoft, TaylorMade, Overstock and Lenovo.

Why Cross River Bank and Mastercard are collaborating on cardless ATM access (Tearsheet), Rated: AAA

Cross River Bank, the bank of fintech startups, is working with Mastercard to give consumers cardless access to ATMs through an offering called Mastercard Cash Pick-Up. It allows businesses or individuals to send cash payments by logging in to the Cash Pick-Up platform via their bank’s website or mobile app and entering the necessary transaction and recipient. When they’ve done that, recipients receive a text message with the order number, PIN and a link that helps them locate a participating ATM nearby.

The offering highlights the role of mobile phones in banking’s new normal — mobile is more than just a channel, it’s the thing that’s guiding both financial incumbents and consumers alike through  the shift from physical to digital banking, which still hasn’t been fully realized.

For now, Mastercard Cash Pick-Up is only available at enabled ATMs in the U.S., where the postal service plays far too big a role in payments, particularly low dollar disbursements, Isaacson said.

 

Once Shunned, Regulated Industries Now a Lure for Some Investors (Xconomy), Rated: AAA

Niehenke theorized that consumers whose trust in traditional banks had eroded might become a willing customer base for financial technology startups. But it was a bumpy time for tech companies entering the highly regulated financial sector.

Among those startups was Prosper, a peer-to-peer lending startup that had been temporarily shut down in 2008 by the Securities and Exchange Commission. The SEC maintained that the company was, in effect, selling securities rather than merely functioning as a marketplace connecting lenders and borrowers, TechCrunch reported.

CAN Capital Makes Three Strategic Hires to Strengthen Sales and Technology Teams (PR Newswire), Rated: A

CAN Capital, a small business specialty finance company, today announced three strategic hires as the company continues to invest in its technology and growth strategies. Mike Dodson, Vice President, Technology, Michael O’Brien, Director, Business Development, and Liping Deng, Director, Modeling & Analytics, have joined CAN Capital to focus on accelerating the company’s expansion.

China’s JD partners with accelerator program Plug and Play to reach US startups (TechCrunch), Rated: A

E-commerce giant JD.com, the closest rival to Alibaba in China, is broadening its presence in Silicon Valley after it announced a collaboration with accelerator firm Plug and Play to seek out and work with promising U.S. startups.

Robo-advisors hit lull in everything but VC backing as reality fragments their identity (RIABiz), Rated: A

Last summer, Sallie Krawcheck took a seat before 18 venture capitalists to raise capital for Ellevest Inc., her New York-based robo-advisor for women. See: Sallie Krawcheck astonishes industry observers by raising another $32.5 million for her robo-advisor — perhaps on strength of ‘unit economics’.

The role reversal reflects broader changes occurring across automated advice. BlackRock Inc. originally bought San Francisco-based FutureAdvisor as a retail product, then made it into a B-to-B offering. See: Why FutureAdvisor orphaned its B2C book of business, how post-Invesco Jemstep is doing and other learnings at CFA Society’s robo-panel in San Francisco

News out of Betterment has slowed to a crawl.

Wealthfront Inc.‘s Andy Rachleff leaned into the irony of robo-advisors moving away from digital-only in a September blog post.

Yet, in an autumn largely devoid of news from robo-advisors, Acorns had a blistering announcement of a much deeper integration with one of its VC backers, PayPal, which has 218 million users. See: As Acorns grapples with monetizing 1.1 million micro-accounts, the laid-back LA robo-advisor brings Wealthfront’s former chief exec onto its board.

In the case of Irvine, Calif.-based Acorns, the nudging took the form of A/B-style testing of giving investors choices of how much to invest.

Robo-adviser launches using chatbot technology (FT Adviser), Rated: A

Nuvo has launched what it describes as an “artificially intelligent digital broker powered by chatbot technology”.

The launch of the robo-adviser, which uses AI to learn about customers to pick prices for mortgages and protection products tailored to them in less than a minute, comes just days after a US company claimed to be the first in the world offering financial advice with artificial intelligence.

US Banks Look to Silicon Valley as Fintech Booms (PaymentsJournal), Rated: A

More than eight out of ten (82%) US commercial banks have pledged to increase fintech investment over the next three years as the sector continues to expand, with 86% of senior managers planning an imminent rise in investment.

The in-depth research commissioned by global Fintech provider Fraedom, polled decision-makers in commercial banks including shareholders, middle managers and senior managers.

The study also found that more than seven out of ten (71%) respondents believe that the rise of technology within commercial banking threatens traditional one to one bank and customer relationships. This disruptive impact was felt greatest by shareholders (95%) as opposed to 67% of middle managers.

Need a Shot of Capital for Business Growth? Here’s How to Find a Working Capital Loan This Year (AllBusiness.com), Rated: A

Startup founders know to look for grants, crowdfunding, and angel investors, and established small business owners understand the ins and outs of bank loans. However, another form of financing for established small businesses—working capital loans—is a little less familiar to many owners, yet working capital loans can be the ideal financial tool to handle opportunities (or problems) that present themselves in the shorter term.

Here are some of the highlights:

  • You don’t need to lay out a detailed plan of what you want to do with the money. Paperwork is minimal.
  • If your credit score is at least 500, you’ll need to show an annual profit of $50,000; if your credit score is at least 600, that gets cut in half to $25,000. If you’ve been denied a bank loan, your chances may still be good for a working capital loan.
  • You have the flexibility of choosing the type of working capital loan that best meets your needs: a term loan, cash advance, invoice factoring, revolving line of credit, or purchase order advance.

Today In Data: Consumer Spend, Venture Capital And Bitcoin Reach Record Highs (PYMNTS), Rated: A

$682 billion | Amount that consumers are expected to spend on presents and other holiday preparations this holiday shoppingseason, with retailers going the extra mile to meet them where they are in a simpler and faster way. That means upping mobile and online shopping experiences, offering a buy online pick up in-store model and launching services like curbside pickup and better shipping options.

Broker-Dealer Firms Raise Alarms That SEC’s CAT Database Isn’t Secure (Financial Advisor), Rated: A

Broker-dealer firms aren’t confident the SEC’s consolidated audit trail (CAT) – a single, comprehensive database expected to store an unprecedented amount of sensitive trade data and personal identifiable information (PII) – is secure, according to testimony delivered before the U.S. House of Representatives.

National securities exchanges, Finra, alternative trading systems and broker-dealer firms have been required to submit information on trading activities – including customer information and prices – to the CAT daily since November 15 of this year. Large broker-dealers will be required to start submitting information to the CAT by November 15, 2018, while small broker-dealers are expected to do so by November 15, 2019.

The CAT is expected to take in 58 billion records daily – including orders, cancellations, modifications, executions and quotes for the equities and options markets – and maintain data for more than 100 million customer accounts and their unique customer information, according to parties involved in the CAT.

.46 Billion in Extra Credit Card Charges Due to Upcoming Fed Rate Hike (WalletHub Email), Rated: A

Forecasts call for a 99%+ chance of a Federal Reserve rate hike on Wednesday, which would make three for 2017. The move couldn’t come at a worse time for consumers, according to WalletHub’s 

Use your 2017 budget before you lose it (LendIt), Rated: B

Having an exhibitor booth or sponsoring this event is your best chance to do business with companies shaping the fintech industry. 100+ companies have picked their spot. Download the sponsorship brochure today now and our team will help you seal the deal before your budget runs out.

Take advantage of the current ticket price and save $1,200 vs. the standard ticket.

Angie Herbers Launches Online FA Education Platform (Financial Advisor), Rated: B

Financial advisor consultancy founder Angie Herbers has launched an online training platform aimed at helping advisors grow their firms.

Beyond U offers advisor education via videos, online seminars and assessments, covering such topics as operations, management, sales and marketing, client services, compensation and more, according to a press release from the firm.

United Kingdom

Zopa announces changes to its Isa (Bridging&Commercial), Rated: AAA

Zopa investors can now redirect their repayments into an Isa, allowing investors to gradually transfer their funds into an Isa without having to sell loans or pay fees throughout the process.

The UK alternative finance market is still healthy (Business Insider), Rated: AAA

The UK’s alternative finance market — including marketplace lending, crowdfunding, and invoice trading — grew 43% year-over-year (YoY) in 2016, from £3.2 billion ($4.3 billion) to £4.58 billion ($6.17 billion), according to a recently released study from the 

Source: Business Insider

UK positioned to win in fintech, despite Brexit uncertainty (AltFi), Rated: AAA

Just this week the 

Small Businesses Drive 43 Percent Growth In UK Alternative Finance (PYMNTS), Rated: A

Researchers said about 72 percent of market volume in 2016 can be traced back to demand for lending options among startups and small businesses, up from 50 percent the year before. That amounts to more than $4.4 billion driven by startups and SMBs in 2016.

Peer-to-peer businesses lending was 2016’s largest alternative finance market segment, which saw 36 percent year-over-year growth.

Squirrel Extends Crowdcube Campaign After Achieving £400,000 Funding Target (Crowdfund Insider), Rated: A

Squirrel, a personal finance app designed to help users have more control over their money, has successfully secured its initial £400,000 funding target from 450 investors through its equity crowdfunding campaign on Crowdcube.

Downing enters property development space with Funding Circle hires (P2P Finance News), Rated: A

DOWNING has hired two real estate experts from Funding Circle’s property division as it enters the property development space through its crowd bonds platform.

Investors on Downing’s crowd bonds platform are being offered returns of five per cent for one year or six per cent for two years by investing in Downing Development Finance (DDF) through the DDF Property Bond.

 

Investors put trust in Scotland’s canniness (The Scotsman), Rated: B

Edinburgh Worldwide is another Baillie Gifford managed trust, though rather obscured by the group’s better known trusts. Notable performers (not a Scottish name among them) were Alnylam Pharmaceuticals, a gene silencing company, LendingTree, an online loan marketplace, and IPG Photonics, a manufacturer of fibre-lasers used in metal processing.

China

 

How asset managers like FinEx Asia are using AI to disrupt traditional bank lending (SCMP), Rated: AAA

Banking disintermediation – essentially, taking out the middle man – has taken a new twist. While in recent years peer-to-peer (P2P) lending has become the poster-child for threatening banks’ lending business, a new type of hybrid disrupter is apparently starting to emerge: asset managers backed by financial technology.

One such firm attempting to cut banks out of the consumer-lending equation is FinEx Asia. The newly-licensed asset manager connects Asian investors with American consumer-credit assets, using artificial intelligence to select the loans based on risk appetite.

Founder and chief executive Maggie Ng said the company’s three funds now have US$100 million under management. They are backed by a portfolio of more than 10,000 US-based borrowers who have obtained loans from multiple online lending platforms, she said without specifying which ones.

Thomson Reuters platform to help further develop Hong Kong’s fintech offerings (SCMP), Rated: A

Thomson Reuters, the news and market data giant, is partnering with a Hong Kong government-backed body to help the city’s banks and fintech firms develop new technology, cut costs and create new products.

Celebrating its 150th anniversary in Hong Kong next year, the new arrangement will see Thomson Reuters offer its platform to financial firms to distribute their products as well as use its technology, tools and data to create products, for free.

International

Growth of Investor Numbers on P2P Lending Platforms (P2P-Banking), Rated: AAA

Today I take a look at how investor numbers are developing at several platforms.

Source: P2P-Banking

FinTech Startup Nanopay Is For Banks, Not Against Them (PYMNTS), Rated: A

Whether bank customers are consumers or businesses, chances are good that they do at least some of their banking online. This month, startup nanopay is announcing a partnership with Canadian nonprofit interbank network Interac to help businesses manage the complexity of working across borders.

The partnership creates access for any bank account holder in the country to send funds to or receive funds from any other bank account served by nanopay. So far, that’s a short list including just India. But, according to nanopay CEO Laurence Cooke, coverage will be supported in the U.S. and China as well in Q1 of 2018.

The First Social P2P Cryptobank Datarius to Launch a Pre-Sale on December 12 (Coinspeaker), Rated: B

The Datarius main characteristics are the use of blockchain, artificial intelligence, cryptocurrency operations and a special designer of the customer-adapted tariffs.

P2P lending is another characteristic of Datarius. It provides millions of people around the world with the possibility to receive and make loans using a Personal Account in the browser or through a smartphone application. It is a fast, reliable and easy way to get a loan wherever a person is. This is an opportunity to earn without involving brokers.

The pre-ITO round starts on December 12 on the official website of the Datarius Cryptobank and will last till December 31. 1 DTRC token = $ 1, but during the Pre-sale every buyer receives a 35% bonus. Soft Cap: $ 125,000.

Asia

ANNOUNCING THE LAUNCH OF THE iFX EXPO ASIA 2018 (NewsBTC), Rated: B

CONVERSION PROS, a marketing agency within the retail finance sector and founding company behind the iFX EXPO series of financial B2B events, has announced their next event, the iFX EXPO Asia 2018, which will take place in Hong Kong from the 23rd to the 25th January 2018 at the HKCEC (Hong Kong Convention & Exhibition Centre).

This event holds special significance, according to Gal Ron, CEO of CONVERSION PROS:

“This will be our 12th show to date and we expect to showcase this steady growth as we present an expanded floor plan with more exhibitor and sponsor areas tailored to the needs of our attendees. We are also placing special focus on Crypto as well as Peer to Peer lending as we are sure that this is part of the future of the online trading industry.”

Russia

Mintos, an Online Marketplace for Loans, Adds First Russian Loan Originator to Platform. (Crowdfund Insider), Rated: AAA

The Mintos marketplace for loans has added its first Russia based loan originator: EcoFinance. The online lender offers investments in unsecured personal loans issued in Russia under its CreditPlus brand. Mintos reports that EcoFinance loans on its marketplace will initially be listed in Euros with investors able to earn up to 11% annually.

Africa

Kiakia — get real-time capital as a business owner or working class (Techpoint), Rated: AAA

It’s no longer news that many individuals and SMEs in Nigeria have limited access to finance, especially from commercial banks.

Kiakia, an AI and machine learning powered alternative credit scoring, customer service, direct and a P2P lending platform has launched a virtual agent called “Mr K” to help working adults and SMEs access credit.

According to the Co-founder, Olajide Abiola (who also doubles as the Chief Data Scientist), millions of naira in loans have been successfully granted to and repaid by hundreds of borrowers across 22 States in Nigeria. This comes with a loss/default/NPL ratio of below 2.3%, which is consistently maintained over a 12-month period, all thanks to Kiakia’s algorithm.

Canada

FLEXITI FINANCIAL ANNOUNCES ONLINE FINANCING TO GROW E-COMMERCE SALES FOR CANADIAN RETAILERS (Flexiti Financial), Rated: AAA

Flexiti Financial, a provider of Point-Of-Sale (POS) financing and payment technology, announced today that its award-winning POS consumer lending platform is now available for online transactions. Retailers across Canada now have access to a powerful, online financing platform that easily integrates into any e-commerce engine, offering a low-cost solution. This is a critical new offering for Canadian retailers as it overcomes two key hurdles – speed of implementation and cost – as e-commerce continues to grow as a critical sales channel.

Flexiti Financial’s POS lending platform offers low rates for retailers who want to offer their customers flexible payment options, such as 0% interest financing. Customers do not require an existing credit card to apply.

Authors:

George Popescu
Allen Taylor

Friday October 13 2017, Daily News Digest

China P2P

News Comments Today’s main news: Ron Suber delivers last keynote at Lend360. Kroll assigns preliminary ratings to Marlette Funding Trust 2017-3. Judge says he is likely to certify LendingClub lawsuit as class action. Lemonade rolls out open API. Zopa CEO struggles with perception that P2P lender is struggling. Reserve Bank of India issues KYC guidelines for prepaid payment instruments. State Bank of Mauritius, […]

China P2P

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Africa

South America

 

News Summary

United States

The “Godfather of Fintech’s” Last US Keynote (FintechSauce), Rated: AAA

Ron Suber walked onto the LEND360 main stage to the theme song of Francis Ford Coppola’s The Godfather.

This was Ron’s last keynote in the US (until he makes a Jordan-like comeback, perhaps?), which attracted a standing room only crowd. His talk started off with the theme of consolidation, comparing FinTech to previous life-changing industries such as radio, tv and mobile phones.

Ron also shared his top tips for entrepreneurs and platforms:

  1. He suggested that the platforms know what makes them unique and to be able to pitch your company in two sentences or less.
  2. He also said that there is no “single solution.” There will always be ways to do things.
  3. Also, listen to consumers–they’re the ones that drive innovation.
  4. Focus. The need to focus as an entrepreneur is key to success.

KBRA Assigns Preliminary Ratings to Marlette Funding Trust 2017-3 (BusinessWire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Marlette Funding Trust 2017-3 (MFT 2017-3). This is a $297.8 million consumer loan ABS transaction that is expected to close on October 26, 2017. This transaction represents the fifth securitization collateralized by unsecured consumer loans originated by Cross River Bank, under the Marlette Best Egg Platform and sold to Marlette Funding, LLC (“Marlette”) or its affiliate.

The transaction has initial credit enhancement levels of 37.70% for the Class A Notes, 24.90% for the Class B Notes, 14.90% for the Class C Notes and 7.00% for the Class D Notes. Credit enhancement consists of overcollateralization, subordination (in the case of the Class A, Class B and Class C Notes) and a reserve account funded at closing.

LendingClub Investors Poised To Win Cert. Over Objections (Law360), Rated: AAA

A California federal judge Thursday said he will likely certify a class of LendingClub Corp. investors who allege the peer-to-peer lending company hid defects in its internal controls before and after its $1 billion initial public offering, over objections from both the company and investors pursuing separate state law claims.

U.S. District Judge William Alsup indicated he was “inclined to certify everything,” but seemed likely to trim the terms, telling LendingClub attorney Victoria Parker of Quinn Emanuel Urquhart Sullivan LLP she’d “raised some good points” about….

Online Lending 2.0 by Renaud Laplanche (Field Services on Demand), Rated: AAA

Lemonade platform now “open to the world” with API (Banking Technology), Rated: AAA

“We’re opening up the Lemonade platform to the world!” says Shai Wininger, co-founder of Lemonade, a US-based insurtech firm.

The new Lemonade API supports quoting, policy creation and payment for homeowners, condo, and renters insurance policies in the company’s active markets  of New York, California, Texas, Illinois, New Jersey and Rhode Island. More regions will be added “in the near future”.

Lending Disrupted? Not Yet, Says Renaud Laplanche (Crowdfund Insider), Rated: A

Renaud Laplanche, co-founder and CEO of Upgrade, and former co-founder and CEO of Lending Club tried to reignite the flame of the consumer lending sector by forecasting not only its continuing success, but further the emergence of major innovations.

The growth of online lending will re-accelerate in the next 15 months.

Credit card debt is currently growing at a 5% rate and represents $1.021 trillion. The total debt balance of US households totals $12.73 trillion.

The US is experiencing one of the longest economic growth run, yet still 20 months shorter than the growth run which preceded the great depression. Observers estimate at less than 30% the risk of recession.

When I asked Renaud Laplanche about his personal vision of the ideal product – the product he would like his company to deliver if there were no technological or other barrier, he said: “one click responsible credit.”

Goldman wants to help flip that house (CNBC), Rated: A

Now Goldman is getting into lending for real estate pros through its acquisition of Genesis Capital.

The deal, for undisclosed terms, gives Goldman a business that makes loans of $100,000 to $10 million at rates of 7 percent to 12 percent. It won’t lend to occupants, so that leaves real estate professionals who are renovating and looking to sell fairly quickly. Genesis made $1 billion of loans last year.

Affirm’s Plan To “AMP” Retailer Margins And Conversions (PYMNTS), Rated: A

You’ve heard the old story: If brick-and-mortar merchants watched 75 percent of their customers walk in their stores and then walk out without having purchased a single thing, sirens would be screaming. But that’s precisely the situation with online commerce – three out of every four consumers who load their cart, don’t buy what’s in that cart.

AMP is integrated with seven of the top email service providers that online merchants use to market to consumers. Thee integrations give online merchants a new way to nudge a consumer into making that purchase by offering the ability to pay in installments, using Affirm. Retailers using any of those email providers are able to drag and drop the Affirm “as low as” pricing offer into any of their email templates, and then use it as a mechanism to convert abandoned carts.

“We want to give retailers a new way to follow up,” Overstreet said. “Instead of just showing their consumer the same $400 loveseat that they decided not to buy a day or a week ago, the consumer gets a prompt letting them know they can buy that $400 loveseat for little as $35 a month.”

Should you add a loan to your shopping cart? (San Francisco Chronicle), Rated: A

Got your eye on a new living room set at Wayfair? Or maybe you’re booking your honeymoon on Expedia. Increasingly, shoppers at these sites and others are encountering payment options from third-party lending companies like Affirm, Bread, Klarna and Acima Credit.

Lyst, an online clothing store carrying brands such as Burberry, Marc Jacobs and J. Crew, offers loans through Klarna. And Walmart is considering checkout loans from Affirm for items above $200, according to a report by the Wall Street Journal.

While some retailers may offer zero-interest promotional rates, annual percentage rates from Affirm and Bread, for example, can be as high as 30%. A $345 handbag at Rebecca Minkoff will wind up costing you $385 if you pay for it with a 12-month loan from Affirm at an APR of 21% — the average rate for its borrowers, Affirm says.

HOW SHOPPING LOANS WORK

The process is similar to selecting a store credit card at checkout. The loan option might appear next to the purchase price or in your shopping cart. In the online experience, selecting the loan option will direct you to the lender’s website or a smartphone app. You enter a few pieces of personal information — typically your name, date of birth and last four digits of your Social Security Number, or in some cases, just your phone number.

If you’re approved, the lender displays multiple loans with varying interest rates, monthly payment amounts and terms. You pick a loan, sign the agreement and finish checking out. Just like using a store credit card, the whole process takes anywhere from a few seconds to a few minutes.

From Weeks to Minutes: How Fintech Is Changing the Speed of Lending (Wharton), Rated: A

In this Knowledge@Wharton interview, Spencer Robinson, head of strategy for the company, explains what Kabbage has discovered that allows it to approve loans in minutes, versus what he says can often be a multi-week slog with traditional banks. 

Knowledge@Wharton: Your website notes that you’ve provided $3.5 billion in financing to some 100,000 businesses online, and you’re still not a household word, which, with those kinds of numbers, surprises me.

Spencer Robinson: Capital One really changed the way people looked at consumer credit finance. And that sort of mindset really helps lay the foundation for the types of things that we do.

Knowledge@Wharton: It’s interesting, the difference between you and a traditional lender. I’ve seen stories about Kabbage. One is about a small business owner who wanted to borrow $50,000 and they took their loan request to a bank. It took three weeks and the answer was “no.” And then they went to you and they got their $50,000 in six minutes. Why can’t banks do that? Why is it that you can do that?

Robinson: I would say banks can. A lot of times it’s a matter of getting out of your own way.

Robinson: Our APR average is right at about 39% to 40%.

Knowledge@Wharton: What is the highest amount that you lend?

Robinson: We’re at $150,000 now.

Listen to the podcast interview here.

If the rules are right, digital microlending could play role in subprime market (R Street), Rated: A

Credit unions frequently are the best available choice for those who have difficulty obtaining credit through traditional banks. But for some, digitally coordinated peer-to-peer lending agreements—inspired by microfinance arrangements for economically fragile communities internationally—also are proving to be an emerging option.

Peer-to-peer digital microlending has the potential to fill a portion of the gap by providing this cohort with small, short-term loans that typically range from $100 to $500.

One of the largest such peer-to-peer digital microlending platforms is the “R/ Borrow” section of reddit.com. This subreddit uses the reputational ecosystem within reddit to identify worthy borrowers, banning users who default or violate the terms of use. The subreddit facilitates the microloans and acts as a central database of transactions, coordinating more than $780,000 in loans in 2015.

If it can be properly scaled, peer-to-peer digital microlending could be a worthy option over payday loans for subprime borrowers.

More than 100 financial firms using Ripple blockchain software (American Banker), Rated: A

Ripple’s campaign to beat Swift at cross-border payments just got some new recruits.

The San Francisco startup announced several new customers of its enterprise blockchain software on Tuesday, bringing the total number of financial ….

ValueInsured Closes Financing Led by Global Reinsurer (PR Newswire), Rated: A

ValueInsured, the only provider of down payment protection, today announced the closing of $6.5M of funding led by an affiliate of Everest Re Group Ltd. and also Houston International Insurance Group (HIIG). The latest round of funding from Everest Re and HIIG builds on their existing partnerships with ValueInsured, which began in 2014 with an initial $6M seed round. This additional investment provides ValueInsured with the growth capital to continue its aggressive distribution partnership strategy, expanding channel presence and enhancing the features of the +Plus SM down payment protection program.

An API-Based Cure For Post-Purchase Blues? (PYMNTS), Rated: A

But many consumers could soon find an easier process for obtaining savings on such purchases, thanks to an API-based solution: Earny, an app-based bot born from a Mastercard API. Earny launched last year with the promise of offering consumers a more frictionless price protection process.

According to Vakrat, Earny’s inspiration started with a blazer purchased for $129 by co-founder Dori Yona. A few weeks later, Yona came down with a sudden case of sticker shock after shopping online and finding the same blazer available for roughly half the price.

Vakrat said he and Yona contacted the credit card company to see if Yona could receive a refund on the difference. The credit card company offered price protection, but Vakrat politely described the process of getting reimbursed for the difference as “inefficient.” While ultimately successful, it took two weeks for Yona to complete the process and receive his $65.

To develop a more efficient post-purchase refund process, the two co-founders entered Mastercard’s Masters of Code Hackathon. The result was the Earny app, which taps into Mastercard’s Simplify Commerce API. Earny uses APIs to authenticate users through their Gmail, Yahoo or Microsoft email providers, then scans their inboxes for eCommerce receipts and compares them to prices from approximately three dozen retailers – including Target, Costco and Overstock.com – checking for price drops. The service works by automating the price protection process, automatically refunding consumers for any detected price differences.

According to Mastercard’s research, U.S. consumers walk away from more than $50 billion in price drops every year because they were either unaware of better offers or because the refund process can be lengthy and require tedious paperwork.

Fed’s Bullard warns bank regulators are ‘complacent’ over fintech risks (Kitco), Rated: A

U.S. banking regulators must accelerate efforts to address the risks posed by fintech companies to the banking sector which could be “eviscerated” by these innovative new players, St. Louis Fed President James Bullard said on Thursday.

In the lending sector alone, Goldman Sachs estimates that $11 billion of annual profit is at risk of leaving the banking system, according to research cited by the Fed.

Fintech’s Got 99 Problems And Diversity Is Definitely One (Forbes), Rated: A

Marketplace lending platform P2Binvestor announced today the launch of a first-of-its-kind bank partnership program with New Resource Bank in order to provide crowdsourced lines of credit to growing, mission-aligned businesses with a hunger for innovation.

Alongside transforming the lending structure for fintech companies, P2Binvestor’s attitude towards diversity in the workplace and moving away from traditional, yet stereotypical roles is second to none, headed up by CEO Krista Morgan.

Five Ways To Bounce Back From A Culture Catastrophe (Forbes), Rated: A

Corporate culture is a growing concern for boards and stockholders. One study shows that 92% of executives believe improving corporate culture would increase their firm’s value. That is an overwhelming majority, and yet so many companies with seemingly unlimited resources keep falling into the trap of poor culture.

A recent victim is SoFi, a privately held online lender. SoFi lost its CEO amid a storm of accusations including sexual harassment, verbal harassment and a culture of fear.

The CFPB’s Payday Lending Rule: An Opportunity in Disguise? (JD Supra), Rated: A

Editorial: Payday loan rules make sense (LJWorld), Rated: B

Kansas legislators should take steps to rein in the predatory lending practices some in the payday lending industry employ.

According to the state bank commissioner, payday loans in Kansas totaled more than $300 million in 2016. Interest rates and fees average an astounding 391 percent per year.

Under UCCC rules, payday loans are limited to $500 on loans that last seven to 30 days, and lenders cannot charge more than 15 percent of the amount borrowed. However, they can charge an additional 3 percent per month for loans that go past their maturity date. Lenders cannot make more than two loans to the same person at any one time, and they cannot make more than three loans to the same person within a 30-day period.

Editorial: Payday lending should be restricted (CJOnline), Rated: B

The average federal student loan carries an interest rate of around 5 percent. When you take out a loan for a car, you can expect to pay between 3 percent and 10 percent. The average interest rate for a credit card is a little more than 15 percent. But if you get a payday loan in Kansas, you’ll be slapped with an interest rate of 391 percent.

According to the Pew Charitable Trusts, payday borrowers are disproportionately likely to be low-income African Americans with lower average levels of education. Borrowers are 62 percent more likely to earn less than $40,000 per year, 82 percent more likely to have lower than a four-year degree and 105 percent more likely to be African American.

LendingClub Schedules Third Quarter 2017 Earnings Release and Conference Call (Business Insider), Rated: B

LendingClub (NYSE: LC), America’s largest online marketplace connecting borrowers and investors, announced that it will report earnings for the third quarter of 2017 on Tuesday, November 7, 2017, after market hours. LendingClub will host a conference call to discuss the third quarter financial results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on the same day.

A live webcast of the call will be available at  under the Events & Presentations menu. To access the call please dial +1 (888) 317-6003 or outside the U.S. +1 (412) 317-6061 with conference ID 7584209 ten minutes prior to 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time).

United Kingdom

Zopa CEO on lender freeze: Popular restaurants don’t ‘put on more tables, they take reservations’ (Business Insider), Rated: AAA

The CEO of peer-to-peer lending business Zopa has rejected claims the business is struggling to attract borrowers, saying the platform is still growing lending volumes by as much as 50%.

CEO Jaidev Janardana told Business Insider: “I do struggle a little bit with this thing that we’re struggling with borrowers. We have been growing [lending] by 45-50%. I don’t think there are other businesses that are growing at 50% year-on-year that would be looked at as struggling.”

Zopa has built up a waiting list of 15,000 people who want to lend over the platform. The company hopes to let some of them onto the platform towards the end of the year.

‘Consumer lending is always a cyclical business’

The Bank of England has been sounding the alarm on rising consumer credit levels and warned lenders in July not to “return to the punch bowl,” saying it is worried that lenders relaxing their lending criteria could lead to repeats of mistakes made during the financial crisis.

Orca’s New P2P Lending Investor Guide Makes a Splash: UK Surpasses £11B Cumulative Lending Mark (Crowdfund Insider), Rated: AAA

Orca’s analytic service recorded a new milestone for the asset class this month – £11bn cumulatively lent, all-time in the UK. With over 200,000 active investors and 30% of market share attributed to institutional investment, UK P2P lending is maintaining its growth trajectory, set for a market value of £15bn by 2020. In 2017 year-to-date, £3.4bn has been invested across P2P lending platforms, which is over £100m more than the 2016 total lent figure, according to the Guide.

Source: Orca

Download the guide here.

Legal 500 2017: The region’s top performers in banking and finance (Manchester Evening News), Rated: A

Law firms across Greater Manchester continue to act for a host of well-known lenders and borrowers on a wide range of leveraged, real estate and corporate and asset finance transactions.

While this year’s tiers one and two remain the same as last time, Eversheds Sutherland (International) LLP has moved up from tier four to tier three and gunnercooke LLP has moved from tier five to tier four.

TIER TWO – DWF has a ‘strong’ borrower practice whose experience spans corporate banking, acquisition finance, public sector finance, and peer-to-peer lending.

LendInvest Teams Up With UKPA to Launch Second Annual PropTech Influence List (Crowdfund Insider), Rated: A

On Thursday, UK-based p2p lending platform LendInvest announced it has teamed up with the UK PropTech Association (UKPA) to release the second annual PropTech Influence List.

The deadline to vote is November 3rd. The list will be announced at 

Search is on for PropTech Influencers of the Year (Estate Agent Today), Rated: B

The LendInvest PropTech Influencer List  recognises the 25 people doing the most to develop the understanding, reach and benefit of PropTech in the property market.

Nominations are open to anyone working in or contributing to PropTech in the UK and overseas.

Last year’s winner was Estate Agent Today contributor James Dearsley, who this year becomes one of the judges in the competition.

IT portfolio – debt/alternatives to gilts (Citywire Money Forums), Rated: A

In terms of alternative uncorrelated debt what are the alternatives? I hold Investec local currency EM debt, Carador income and Funding Circle IT.

Can the gilt portion be modified to other sources of debt? I have considered SQN Asset, and P2P global (recent weaknesses) as a top up. Will these forms of debt hold up in a downturn? I’m not so sure against gilts/treasuries which are overvalued but possibly the only real diversifier (I also hold 7% in gold).

SONECT wins LendIt Europe PitchIt startup competition (Bankless Times), Rated: B

SONECT, a platform that can convert anyone or any shop into a virtual ATM, is the PitchIt winner at LendIt Europe.

China

China’s Online Lending  Consolidates As Market Grows (PIIE.com), Rated: AAA

China’s online peer-to-peer (P2P) lending industry is going through a welcome consolidation. Weak, noncompliant platforms are failing, but long overdue regulatory tightening and still excessive competition is likely to further winnow down the 2,000 platforms online today to a few hundred in the coming years. However, those that survive will compete in a much larger market that has grown quickly despite a minefield of new regulations and frequent failures.

This post expands and updates two earlier installments in this series: an introduction to Chinese P2P in part 1, including its earlier growing pains and the regulatory loopholes they used to grow. Part 2describes regulatory measures taken up to July 2016, especially the difficulties involved with regulation through local officials.

Source: PIIE

P2P loans outstanding in China at the end of September are up 63 percent from a year ago, to RMB 1.15 trillion (around $173 billion).

Source: PIIE
European Union

Linked Finance aims to increase level of peer-to-peer lending (RTE), Rated: AAA

Linked Finance has raised €2 million in equity as part of plans to expand its business.

Since launching in 2013, Linked Finance has lent €34.5m to Irish SMEs, more than a third of which has already been repaid, and agreed its 1,000th loan in September.

Source: RTE

RTÉ’s Business News Weekly Podcast – October 13 (RTE), Rated: A

On this week’s podcast: Peer-to-peer lending platform Linked Finance raises €2m to fund its expansion and why small and medium sized Irish companies stand to benefit from more favourable tax treatment for employee share incentive schemes announced in Tuesday’s budget.

Listen to the podcast here.

Big banks discuss how to adjust to a digital economy (Business Insider), Rated: A

During a panel discussion at 

Source: Business Insider

 

Zinbaustein “Wohnen Im Village 11” Hits €625K Goal, Starts Investor Waitlist (Crowdfund Insider), Rated: A

Private investors may now participate in a new equity crowdfunding real estate round for a mortgage of residential buildings in Darmstadt / Frankfurt area of Germany.  “Wohnen Im Village 11” on zinsbaustein.de features ten semi-detached houses and one detached house.  Private investors can participate in the form of a subordinated loan from 500 euros to 10,000 euros with a maturity of approximately 18 months and receive an interest rate of 5.25 percent per year. There is a repayment option after 12 months, when construction and sales run according to schedule. To date, 625,000 euros have been raised from the crowd for the project; a waitlist has been started.

French fintech startup Manager.one raises €2 million (Tech.eu), Rated: B

Manager.one, a fintech startup based in Paris, has raised €2 million from angel investors for its online banking platform for entrepreneurs.

International

Finastra delivers next-generation payments technology on Microsoft Azure (Realwire), Rated: A

Finastra is bringing its next-generation payments solutions to the cloud via Microsoft Azure, Microsoft’s enterprise-ready trusted cloud platform. Banks will benefit from streamlined onboarding, as well as faster access to new products and upgrades. This alliance is an extension of Finastra’s cloud-based lending oversight solution that was previously launched on Azure in the US and Canadian markets in 2016. Since then, Finastra has broadened its relationship with Microsoft and is migrating its payments capabilities to Azure.

Worldcore: Bringing Banking to the Blockchain (BTCManager), Rated: A

Worldcore is an established online money transfer service, which has recently announced plans to expand its operation to create an online, blockchain-powered peer-to-peer lending platform. To this end, they have announced an ICO, which is currently scheduled to begin on October 14, 2017.

Jeff Woodward Joins Brickblock as CIO (BlockTribune), Rated: B

Brickblock, the investment platform connecting real-world assets and cryptocurrencies, has added experienced property investor and developer Jeff Woodward to its team as Chief Investment Officer (CIO).

In December, Brickblock will complete a world-first by selling an entire apartment building on the blockchain.

India

RBI announces strict KYC guidelines for prepaid payment (Jagran Josh), Rated: AAA

Africa

The SBM Group and SALT Technology Enter Exploratory Partnership to Collateralize Blockchain Assets (BlockchainNews), Rated: AAA

The State Bank of Mauritius, SBM Group and FinTech service provider SALT,  creators of the first Blockchain-backed loan platform, today announced that they have entered into an exploratory relationship to become the first to use Blockchain assets as collateral for lending services.

South America

Ripio Raises $ 31 Million in ICO Pre-sale (BlockTribune), Rated: AAA

Buenos Aires micro-lending startup Ripio has raised $31 million as part of an initial coin offering (ICO) pre-sale ahead of a new credit network launch. The public ICO will begin on October 24.

Investors in the pre-sale included Blacktower Capital, Blockchain Investors Consortium, and FBG Capital. According to the startup, participants were drawn from various parts of the world like Russia, South Korea and Canada.

Two FinTech Startups That Want to Reach Customers ‘Door-to-Door’ (Let’s Talk Payments), Rated: A

This year, the two largest contributions were made to Creditas, which received ~$18.87 million, mostly from IFC (the World Bank’s investment arm), and Avante – with ~$12.14 million received mostly of Fiinlab, innovation laboratory of the Mexican group Gentera, and the Vox Capital impact fund.

Avante, a FinTech startup that provides micro-loans, has already lent more than ~$31.45 million to 44,000 microentrepreneurs.

Creditas, an online lending platform that offers secured consumer loans to individuals with home and automobile as collateral, offers credit at lower rates using technology and data intelligence for efficiency. The startup is the second-largest Brazilian in funding, with a total of ~$28.3 million – only behind Nubank.

Authors:

George Popescu
Allen Taylor