Thursday January 31 2019, Weekly News Digest

fintech vc 2018

News Comments Today’s main news: Kabbage expands into India. GreenSky launches loan product for elective health care. Lending Works hits 150M GBP in loans in five years. Ant Financial’s money market fund shrinks to two-year low. Ant Financial raised close to combined raise of all U.S., Europe fintechs last year. Varo Money raises annual percentage yield on savings accounts to […]

The post Thursday January 31 2019, Weekly News Digest appeared first on Lending Times.

fintech vc 2018

News Comments

United States

United Kingdom

International

India

Other

News Summary

United States

GreenSky launches new loan product for elective health care (American Banker), Rated: AAA

The Atlanta fintech on Tuesday announced the launch of a revolving credit line of up to $25,000. GreenSky previously offered only installment loans; the new product is designed to be a better fit for elective medical providers that rely heavily on repeat business.

Is SoFi Money the Bank Account of the Future? (Lend Academy), Rated: AAA

There are three main benefits that SoFi touts with the SoFi Money account:

  1. Pay zero account fees.
  2. Earn more interest.
  3. Free ATMs everywhere.

SoFi will pay (as of this writing) 2.25% on balances held in a SoFi Money account. Note about the small print: you will only earn this 2.25% for the first three months and then the interest rate drops to a (still respectable) 1.25% unless you do one of two things. Either setup a salary direct deposit of $3,000 or more a month or do $500 in debit card transactions each month. I am in the process of moving my salary deposit to my SoFi Money account.

The cash balance in SoFi Money Accounts is swept to one or more program banks where it earns a variable rate of interest and is eligible for FDIC insurance. FDIC Insurance is not provided until the funds arrive at partner bank. There are currently six banks available to accept these deposits, making customers eligible for up to $1,500,000 of FDIC insurance (six banks, $250,000 per bank).

Mixed Credit Card Issuers’ Earnings (PeerIQ), Rated: AAA

Credit card master trust data shows that delinquencies have picked up from their lows but remain significantly below their peaks. Issuers (with the exception of Capital One), have increased loan loss reserves at a rate higher than loan growth as credit renormalization continues.

30 and 90-day delinquency rates from credit card master trust data

Source: Bloomberg, Bank Credit Card Trust Data, PeerIQ

How online platforms shook small-business lending in America (Financial Times), Rated: AAA

In the years after the financial crisis, small businesses that needed credit were stuck. New capital rules discouraged big banks from touching any borrower perceived as risky. The bond and loan markets, where larger businesses flocked for inexpensive debt capital, have little use for sums under $100,000 — which is what most small enterprises need.

A handful of non-bank lenders, payment and e-commerce companies have leapt into the gap. In an environment of easy money and economic expansion, small business lending operations at OnDeck, Kabbage, PayPal, Square and others have grown fast.

LendingTree Analysis Reveals How Personal Loan Purposes Vary by States and Credit Scores (PR Newswire), Rated: AAA

Key takeaways

  • Managing existing debt is far and away the most popular reason for a personal loan, representing 61 percent of all loan requests in 2018. Thirty-nine percent of borrowers plan to use their loans to consolidate debt, and 22 percent plan to use it to refinance credit cards.
  • Consumers seeking personal loans to manage debt also requested the highest origination amounts: $14,107average amount for credit card refinance, and $12,670 for debt consolidation.
  • Almost 15 percent of loans reasons are categorized as “other” — the third most popular choice. Home renovation and improvement loans are the next-most popular loan purpose, accounting for 7.7 percent of loan requests with an average loan amount of $12,384.
  • New Englanders are the most likely to use their loans to manage existing debt, taking the top five spots. The residents of MississippiLouisiana, and Arkansas are the least likely.
  • Washington, D.C. is home to the highest rates of a few offbeat loan purposes, with more residents requesting loans here for a move (7.4 percent) or business (2.6 percent). It’s also tied with New York and Louisiana as the place where wedding loans are most requested, with 1.5 percent of loans in these states intended to cover the costs of tying the knot.
  • West Virginia is the top state for borrowers requesting loans for their home, specifically home improvements (8.6 percent of loans requested in this state) or home buying (4.9 percent).
  • In Wyoming, residents request personal loans for medical expenses more than anywhere else (6.5 percent). In fact, most of the states where people are more likely to request a loan for medical costs are low-density states with more rural areas.
Source: LendingTree

See the full report here.

Cities Where Homeowners Stay Put the Longest (LendingTree), Rated: AAA

  • Cities with shorter housing tenure have greater price appreciation. The top 10 cities had an average tenure of 7.46 years and an average three-year home price appreciation of 12%. The bottom 10, with an average tenure of 6.63 years, have average price appreciation 30%. This suggests that higher housing turnover drives prices upwards, while faster price appreciation could be enticing home owners to sell.
  • The northeast dominates the list of cities with the longest tenure. The top three cities, Pittsburgh, New York and Buffalo are all in the northeast. An additional three northeastern cities are in the top 10 for a total of six.
  • Hot and sunny places have the shortest tenures. The three cities with the shortest tenures — Las Vegas, Phoenix and Austin — are all in warm-weather areas. This reflects high migration rates to those cities, something we looked at in a prior study on where Americans are moving. Denver is the only city in the bottom 10 that experiences a significant winter season.

A George Soros-backed fintech has raised millions to analyze consumer loan trends just as recession worries pick up steam (Business Insider), Rated: A

dv01, a New York-based startup, has raised $15 million in a series B round led by Pivot Investment Partners, a venture capital firm started by a a trio of bankers who worked together at Deutsche Bank AG. One of those ex-bankers, Dinkar Jetley, will join dv01’s board.

Kabbage hires chief revenue officer from LegalZoom (Biz Journals), Rated: A

Atlanta-based Kabbage Inc. has hired the chief marketing officer at LegalZoom as its new chief revenue officer.

Laura Goldberg‘s appointment is effective immediately, according to a Kabbage spokeswoman. She succeeds Victoria Treyger, who vacated the CRO position at Kabbage in August 2018 to accept a position with Felicis Ventures.

Varo Raises Annual Percentage Yield on Savings Account to Industry-Leading 2.80% (PR Newswire), Rated: AAA

In a move to make high-yield savings available to more Americans, no-fee mobile banking company Varo Money, Inc., announced today that it raised the Annual Percentage Yield (“APY”) on its FDIC-insured Varo Savings Account to 2.80% for customers whose Savings Account balance is $50,000 or less, and who have qualifying direct deposits and debit card purchases from their Varo Bank Account.1 An APY of 2.12%1 will apply if these conditions are not met.

Elevate’s RISE Brand Announces Scholarship to Promote Financial Literacy (BusinessWire), Rated: A

Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that its largest consumer product, RISE, will offer college scholarships in an effort to promote financial literacy.

The RISE scholarship will offer five $5,000 awards each year to students who demonstrate a desire to improve their financial knowledge and educate others on personal finance. To be eligible for the scholarship, students must complete an online financial literacy course that was developed in partnership with digital education expert EVERFI.

Credit card player Petal picks up $ 30m funding (Fintech Futures), Rated: A

New York-based credit card firm Petal is back in the money with $30 million in Series B funding.

This is Petal’s second investment from Valar, which was also the lead investor in its Series A funding round. Back in October 2018, Petal got $34 million in financing.

Fintech targets banks keen for out-of-market CRE loans (American Banker), Rated: A

As more banks take the often risky step of expanding outside their traditional markets, especially through digital means, some fintechs sense an opportunity to offer them data they need to find new customers and assess risk.

LendingClub, OnDeck Capital and Lending Tree are each online lending platforms that have bet on this trend. CrediFi, a finance data provider, aims to do the same with a focus on one of the largest asset classes around: commercial real estate.

LoanSnap Raises $ 4.7M in Funding (Finsmes), Rated: A

LoanSnap, a San Francisco, CA-based creator of smart loan technology, raised an additional $4.7M in funding.

The round, which brought total financing to $17M, was led by Thomvest Ventures and existing investors.

Oxygen gets $ 2.3m funding for digital banking life (Fintech Futures), Rated: A

San Francisco-based digital banking service Oxygen has raised $2.3 million in funding to breathe life into its gig economy plans.

In this round it got funding from Digital Horizon Capital; Cynthia Chen, investor, advisor, executive and board member for several US-based fintechs and now co-founder and chief risk officer at Figure; ZMT Capital (China); Locus Ventures; Endure Capital; PioneerFund; Magic City; Light Bridge; Strawberry Creek; Base Ventures; The House Fund and Sam Yam, co-founder of Patreon.

Better Mortgage Secures $ 70 Million in Series C Funding from American Express Ventures and the Healthcare of Ontario Pension Plan (PR Newswire), Rated: A

Better Mortgage, one of the leading digital mortgage lenders in the U.S., today announced its closing of $70 million in Series C financing from American Express Ventures and the Healthcare of Ontario Pension Plan (HOOPP), in addition to existing investors Kleiner Perkins, Goldman Sachs, and Pine Brook. The new capital will support continued growth and investment in Better’s technology platform.

CFPB Announces $ 3.2 Million Settlement with Online Payday Lender (JD Supra), Rated: A

On January 25, 2019, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with an online lender that extends unsecured payday and installment loans, as well as lines of credit, resolving allegations that the lender had engaged in unfair acts or practices in violation of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531, 5536.

Popular ‘robo-advisor’ Betterment picks Philly for its first office outside New York; to hire 20 by end of 2019 (Philly.com), Rated: A

Betterment, a digital wealth manager popular among millennials, has picked Philadelphia for the first office outside its New York home base.

The company, which manages $15 billion in assets, plans to open a Philadelphia office as soon as February, according to founder Jon Stein. Betterment is looking for office space in Center City, with the intent of adding 20 employees in its computer and engineering departments by the end of 2019.

Numerated and PayNet Partner to Improve Digital Lending (BusinessWire), Rated: B

Numerated announces that it will integrate PayNet’s MasterScore v2 within its real-time lending and growth platform. PayNet, a leading commercial lending data and analytics firm, will integrate its proprietary database within Numerated’s customizable rules- and segment-based credit decisioning engine to offer banks additional business scoring criteria for managing risk when lending to businesses in real-time.

Planet Home Lending Opens Several Branches; Sees Growth in Business Channels (PR Newswire), Rated: B

Planet Home Lending, LLC opened 26 active distributed retail branches and brought on 165 mortgage loan originators in 2018. Planet Home Lending also enjoyed additional growth in 2018 in its other channels.

Senior Counsel, Litigation (Employment Focus) (Built in Chicago), Rated: B

Guaranteed Rate is building a winning team to reinvent the mortgage experience through innovation, technology and a relentless focus on providing industry-leading mortgage products and superlative customer service.  The Senior Counsel will embrace and support these efforts by working to pursue claims and resolve disputes as appropriate through negotiation, arbitration or litigation, with a particular focus on employment claims and matters.

United Kingdom

Lending Works hits £150m of loans in five years (AltFi), Rated: AAA

Lending Works, the peer-to-peer lender, has surpassed £150m in loans to households and firms.

Nick Harding, Lending Works Co-Founder and CEO, says the firm is aiming to reaching £300m loans by the end of 2019 thanks in part to its “greatest ISA season yet ”.

LendInvest provides GBP7.35 million bridging loan in under seven days (Property Funds World), Rated: A

UK property finance specialist LendInvest has facilitated a GBP7.35 million bridging finance loan for a developer in just seven days.

Brexit blamed for slowdown in consumer lending (P2P Finance News), Rated: A

UNSECURED consumer lending has slowed to its lowest level since 2014, as Brits scale back their spending amid Brexit uncertainty.

The latest Bank of England Money and Credit statistics also found that the total number of mortgage approvals fell from 126,794 to 124,829 in December 2018, indicating an overall lag in the lending market.

Meanwhile, mortgage approvals for house purchase were around 63,800 in December – just slightly less than the 2018 average of 65,200.

Ultimate Finance lends record £1.4bn to small firms (AltFi), Rated: A

Small business financer Ultimate Finance said it lent a record £1.4bn to small firms across the UK last year.

The Bristol-based business said its overall lending jumped 35 per cent in the year to December 2018, boosted by writing more loans across its operations.

It said its bridging loans more than doubled to £31m over the period, asset finance jumped 37 per cent to £46m, while invoice finance also increased by almost a quarter to £117m.

Primary Factors to Have At Hand When Borrowing Money Online (EconoTimes), Rated: A

Online borrowing should be all about convenience, and Loanski loans have made this aspect their rising pillar for excellence. The only requirement for one to apply for a loan through the platform is they must be United Kingdom residents and have an active bank account. These minimum requirements essentially mean that anyone who uses their bank accounts frequently can have the pleasures of having an instant loan when they need it the most.

China

Ant Financial’s money market fund shrinks to 2-year low (Financial Times), Rated: AAA

The world’s largest money-market mutual fund, Ant Financial’s Tianhong Yu’E Bao, was at its smallest for two years by the end of last year as Chinese regulators pressured it to downsize over concerns about systemic risk.

The shrinkage is a sign that Ant, the financial services business of Alibaba Group, is shifting away from marketing its own financial products to serving as a platform for other groups to access its huge customer base.

Cryptocurrency and pyramid schemes add to US$ 44.5 billion surge in illegal fundraising in China (SCMP), Rated: A

Chinese police investigated more than 10,000 cases of illegal fundraising last year, a 22 per cent rise in the caseload, according to China’s top prosecutors.

The total amount involved also rose, more than doubling to about 300 billion yuan (US$44.5 billion), the Supreme People’s Procuratorate said on Wednesday.

Apart from traditional hotbeds such as product marketing, real estate investment, and education, there has been a big rise in fundraising schemes in online lending, wealth management, private equity, cryptocurrency, and elderly care services.

European Union

Europe’s fintech companies are preparing for a no-deal Brexit (CNBC), Rated: AAA

Europe’s fintech companies are getting serious about the possibility of a no-deal Brexit.

As uncertainty looms over the U.K.’s split from the EU, the industry gathered this week at the Paris Fintech Forum. Payments providers, cryptocurrency exchanges and digital banks all said they were taking steps to prepare for the worst-case scenario.

N26 is a Berlin-based digital bank that was recently named one of Europe’s largest fintech start-ups.

Synsam Group and Klarna Launch Innovative Contact Lens Subscription in the Nordics (Webwire), Rated: A

Synsam Group has over 50 years of experience in improving people’s eye health and is today Sweden’s largest optician chain with over 190 stores in Sweden, and 500 stores throughout the Nordic region. One of the company’s most popular services is Synsam Lifestyle Contact Lens Subscription, which includes home deliveries and annual contact lens examinations. To create a better and smoother customer experience, Synsam Group and Klarna have developed a new concept that allows customers to subscribe to contact lenses by using their mobile phones instore, while they can manage all the administration around the subscription online.

International

China’s Ant Financial raised almost as much money as all US and European fintech firms combined (Quartz), Rated: AAA

When it comes to financial technology companies, Ant Financial is in it own league. The affiliate of e-commerce giant Alibaba raised $14 billion in venture capital last year, not far from the $15.9 billion for all fintech investments in the EU and US in the same period. A key question is whether the growth of the world’s most valuable fintech firm is an anomaly or a sign of things to come from China.

Ant Financial accounted for 35% of global venture capital investment in fintech firms last year, according to CB Insights.

Source: Quartz

Cross River and Railsbank Announce Partnership (BusinessWire), Rated: A

Cross River Bank (“Cross River”), a leading innovator and provider of banking services for financial technology companies, and Railsbank Technology Limited (“Railsbank”), a leading UK-based open banking and RegTech technology services platform, today announced that they have entered into a partnership arrangement that will provide Railsbank the opportunity to offer a variety of API-powered, banking and payment processing services across the U.S.

Fintech companies raised a record $ 39.6 billion in 2018 (Reuters), Rated: A

In the last three months of the year, five companies joined the coveted ranks of fintech “unicorns”, or companies valued at more than $1 billion. These include credit card provider Brex, digital bank Monzo and data aggregator Plaid.

Australia

Canada’s Eguana will set up local manufacturing to join South Australia Home Battery Scheme (Energy-Storage.news), Rated: AAA

The South Australia Home Battery Scheme, launched by the state government, offers a maximum of AU$6,000 assistance per household for the purchase of battery energy storage. Home storage systems are typically, but not always, paired with solar PV, and homeowners can get back between AU$500 and AU$600 per kilowatt hour of battery storage capacity purchased.

Announced in September and then launched a month later, the scheme will assist up to 40,000 households financially, with the state government putting in AU$100 million and peer-to-peer lending group RateSetter later committing the same amount of funding in the form of low-interest loans.

ING latest lender to hike variable home loan rates (Mozo), Rated: A

Online lender ING has become the latest bank to lift its variable home loan rates following an announcement earlier today.

The lender will raise rates across all of its variable rate home loan products by 15 basis points, effective as of February 7, 2019.

India

Small Business Lender Kabbage Expanding to India (Lend Academy), Rated: AAA

Kabbage has opened an office in Bengaluru (formerly Bangalore) and plans to have 125 employees by year end. For comparison, the company has about 350 employees in their Atlanta headquarters.

To our knowledge Kabbage is the first US-based lender to enter the Indian market.

RBI directs P2P lenders to file quarterly reports on key metrics (TechCircle), Rated: AAA

Lending has been our star performer: MobiKwik founder (India Times), Rated: A

As of the end of the last financial year, we have a register user base of more than 107 Mn users and a network of over 3 Mn merchants. We are aiming at 400% growth this fiscal. We are aiming at 400% growth this fiscal. We are adding over 3 Mn new users every month, one of the highest in the industry. We will have close to 200 million users by the end of 2019.

A) Lending is growing by leaps and bounds ever since we started out. The opportunity is huge with less than 10% of Indians having access to credit.

Blockchain-based Loan Marketplace Streamsource Raises $ 1 Mn Seed Funding from Accel India (IndianWeb2), Rated: A

Gurgaon-based StreamSource Technologies, a decentralized marketplace for loans, has raised $1 million in seed funding from Accel India, making it Accel’s first local investment in the blockchain sector.

Indian banks unveil blockchain-linked funding for SMEs (Fintech Futures), Rated: A

A group of 11 Indian banks have teamed together to unveil the nation’s first blockchain-linked funding for SMEs.

According to the Economic Times, the participants include ICICI, Axis, HDFC, Kotak Mahindra, Yes Bank, Standard Chartered, RBL, South Indian Bank, IndusInd Bank, State Bank of India and Bank of Baroda.

How are interest rates set on P2P platforms? (India Times), Rated: A

“Borrowers on our platform are given a score out of 100, which determines their risk profile. A score of 52 to 60 points is high risk while a borrower with more than 60 points will get a lower interest rate,” says Bhavin Patel, Founder & CEO, LenDenClub.

IndiaMoneyMart App Brings P2P Investment and Wealth Creation for Masses (Business Standard), Rated: A

lending or lending is a mode of direct financing that enables individuals to borrow and lend on mutual terms. Platforms like IndiaMoneyMart (IMM) eliminate the traditional financial institutions and enable businesses to flourish through a people to people contact.

P2P industry expectations from Budget 2019 (India Times), Rated: A

“While a great boost to the P2P industry would be via the regulator easing lending caps, we look forward to a critical role from the finance ministry for better financial inclusion by extending SOPs to retail investors,” says Dhiren Makhija, CEO, Cashkumar.

Here’s how you can invest in peer-to-peer lending (CNBCTV18), Rated: A

According to i2ifunding.com, a category A borrower may face the least risk while a category F borrower faces the highest risk.

Following interest rates are paid by borrowers across categories:

  • A category borrowers – 12.00 percent to 14.99 percent
  • B category borrowers – 15.00 percent to 17.49 percent
  • C category borrowers – 17.50 percent to 19.99 percent
  • D category borrowers – 20.00 percent to 22.49 percent
  • E category borrowers – 22.50 percent to 24.99 percent
  • F category borrowers – 25.00 percent to 36.00 percent

CreditVidya receives $ 3m funding to develop credit score tech (Fintech Futures), Rated: A

CreditVidya, an Indian alternative credit score firm, has raised $3 million in a funding round led by Bharat Innovation Fund.

Ryan Khoury, Navroz D. Udwadia and Rick Gerson (founding members of Falcon Edge Capital) also participated in the round.

Abhinav Kumar, of Trivago fame, joins Paisadukan as a marketing advisor (India Times), Rated: B

Digital marketing strategist Abhinav Kumar who shot to fame because of his appearance on television commercials of travel search engine Trivago has joined peer to peer lending platform Paisadukan as a digital marketing and branding advisor and also will be on the company’s advisory board.

Asia

P2P lending third most complained about business sector (The Jakarta Post), Rated: AAA

The country’s growing peer-to-peer (P2P) lending sector has become one of the most complained about business sectors partly because of high interest rates and aggressive debt collection practices, according to a report.

The report by the Indonesian Consumers Foundation (YLKI) shows online lending platforms are the third most complained about business sector while property and banking rank second and first respectively.

NTU and Chinese online lender WeBank launch research centre (Straits Times), Rated: A

Nanyang Technological University (NTU) and China’s first digital-only bank have opened a research centre that aims to help customers manage their finances in real-time wherever they are.

NTU research scientists and engineers from WeBank will also study how to provide personalised wealth management advice to customers, among other projects, in the five-year partnership.

Authors:

George Popescu
Allen Taylor

The post Thursday January 31 2019, Weekly News Digest appeared first on Lending Times.

Thursday August 10 2017, Daily News Digest

Lending Club

News Comments Today’s main news: NSR Invest, LendingRobot merge: Now the largest alt lending robo-advisor.LendInvest makes London Stock Exchange debut.Big banks losing ground to China’s fintech giants. Today’s main analysis: Q2 update from LendingClub CIO.MarketInvoice loanbook snapshot. Today’s thought-provoking articles: LendingClub’s surprise comeback.Sanborn looks ahead.Personal financial management apps fold as banks work them into their […]

Lending Club

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

News Summary

United States

NSR Invest and LendingRobot merge to become the largest robo-advisor in the alternative lending space (LendingRobot Email), Rated: AAA

NSR Invest and LendingRobot, two of the largest specialized Registered Investment Advisors in the alternative lending space, announced today that the companies have merged to create the leading independent advisory platform for alternative lending. Lend Core LLC, the parent company of NSR Invest, acquired Algorithmic, Inc. and all its assets, including the LendingRobot website and technology.

The joint team will combine its knowledge in the industry, investment algorithms, machine learning and blockchain technologies with the goal of providing steady investment returns to more than 8000 clients.

The websites, operating, and trading systems of NSRinvest.com and LendingRobot.com will continue to function separately in the short term. In the immediate future, the company is focusing its newfound strength on the LendingRobot Series.

Q2 2017: An Update from Our CIO (LendingClub), Rated: AAA

Projected investor returns are also largely unchanged from the first quarter and continue to range from approximately 4% to 9% (see below).

A few factors that influence returns on the platform1 are listed below:

  • Economic Backdrop. The American economy remains robust but growth continues to be relatively modest. The unemployment rate has changed little over the past year, measuring at 4.4% as of July 2017. Meanwhile, GDP increased by 2.6% in the second quarter of 2017.
  • Borrower Performance. Recent vintage performance continues to come in broadly in line with our expectations. As mentioned above, we continue to see lower delinquency rates across most grades and terms than in loans issued in the second and third quarters of 2016, which we attribute to changes made in 2016.
  • Interest Rates. The overall interest rate environment remains low, though the Federal Reserve raised its Target Rate by 25 bps in June 2017. After announcing its latest rate increase, the Federal Open Market Committee signaled its willingness to raise rates further, as it “expects that economic conditions will evolve in a manner that will warrant gradual increases in the Federal Funds Rate.” Interest rates on the LendingClub platform are not changing at this time.
Source: LendingClub

Lending Club makes a surprise comeback (Business Insider), Rated: AAA

In Q1 2017, US alt lender Lending Club published disappointing results, which showed a flat performance and seemingly vague turnaround plans, sparking concerns that it could be headed for a dead end. However, the company has now reported its second-highest quarterly revenue to date for Q2 of this year, with analysts pointing outthat it appears back on a growth trajectory.

In Q1 2017, US alt lender Lending Club published disappointing results, which showed a flat performance and seemingly vague turnaround plans, sparking concerns that it could be headed for a dead end. However, the company has now reported its second-highest quarterly revenue to date for Q2 of this year, with analysts pointing outthat it appears back on a growth trajectory.

LendingClub CEO Sanborn ‘Looking Ahead’ After Scandal (Bloomberg), Rated: AAA

LendingClub Corp (NYSE:LC) Stock Soars As Banks Prove To Be Hypocrites (BNL Finance), Rated: A

Importantly, peer to peer lending is the fastest growing industry in lending, and while there are a lot of players in the game, LendingClub is one of the largest. On many occasions over the last year, BNL Finance has told members that banks would come back and that LC stock losses were overdone.

With that said, LendingClub stock has rallied 26% over the last three sessions.

PFM apps are folding as banks work them into their own apps (Tearsheet), Rated: AAA

Last week,  Level Money, the money management app owned by Capital One Financial, said it will shut down on Sept. 1. Also last week, Prosper Marketplace said it would discontinue the Prosper Daily app and urged customers to bring their PFM needs to Clarity Money. Earlier last month, SoFi said it would nix the services by Zenbanx, just six months after it acquired the online banking company, and would use its technology and personnel for its own online bank.

PFM has never been a prominent feature of consumer bank accounts. For most of banks’ existence people had to balance their own checkbooks based on debits and credits. That’s changing now as banks realize the importance of personal financial management for continued customer engagement. And they’re starting to implement PFM features into their offerings to provide more complete banking experiences. As it is today, PFM is usually a separate entity found in entirely different apps like Clarity Money, Moven or Mint.

For example, one of the biggest nuisances of PFM historically has been the lack of good financial data. Customers using an app would have to hand over their online banking credentials so the third party financial app could access their banking data to be able to provide users with their financial snapshot. The data that appeared on the home screen of their online banking wasn’t always in sync with what they would see in their PFM app.

Chinese Stock That Rallied 4,555% Could Get the Boot From the Nasdaq (Bloomberg), Rated: A

Wins Finance Holdings Inc., the Chinese loan guarantor that couldn’t explain a 4,555 percent surge in its stock, is set to be delisted from the Nasdaq Stock Market, which cited violations of exchange rules related to its shareholder base.

Nasdaq said Wins doesn’t meet regulations requiring it to have at least 300 shareholders who own 100 shares. The exchange’s decision was also based on “the making of alleged misrepresentations by the company relating to the 300 round-lot shareholder requirement,” as well as public interest concerns, Wins said in a statement Wednesday.

Source: Bloomberg Markets

Installment Loan Provider Earns Top Rating from TopConsumerReviews.com (PR Web), Rated: A

TopConsumerReviews.com recently awarded their highest five-star rating to Lending Club, an industry leader among companies offering Installment Loans.

“For Installment Loans ranging from $1000 to $40,000, Lending Club provides incredible customer service with fair interest rates and fees,” according to Brian Dolezal, of TopConsumerReviews.com, LLC.

StreetShares raises $ 10.3m for “Shark Tank meets eBay” approach to P2P lending (Banking Technology), Rated: A

Alternative lending platform StreetShares raised $10.3 million in a venture round this week, writes Finovate(Banking Technology‘s sister company).

The funds come from an undisclosed investor and bring the Virginia-based company’s total funding to almost $20 million since it was founded in 2013.

Real Estate Crowdfunding Platforms Work to Find a Niche (National Real Estate Investor), Rated: A

However, as crowdfunding marketplaces are getting bigger and more investors are coming onboard, the power to raise equity through this marketplace is growing, says Tore Steen, co-founder and CEO of CrowdStreet Inc. Initially, many sponsors have been looking to raise $1 million to $2 million as a supplement to their existing base of investors. Those levels are now moving to $3 million to $5 million. CrowdStreet’s largest equity raise on a single offering to date was close to $8 million.

Although it remains a fragmented niche that is difficult to quantify, research firm Massolution had estimated the size of the global real estate crowdfunding industry at $3.5 billion in 2016.

RealtyMogul emerged as one of the early players in real estate crowdfunding. Since the firm launched in 2013, it has raised more than $280 million in equity through its online real estate investing marketplace.

Currently, CrowdStreet has more than 25,000 registered investors on its marketplace. In addition, among its active investors, over 55 percent are repeat investors.

Crowdfunding firms such as RealtyMogul are also fueling growth with online “eREITs” that allow them to target a bigger pool of non-accredited investors. Currently, RealtyMogul has 135,000 registered users on its platform, including both accredited and non-accredited investors.

How David Zalik Skipped High School On His Way To Becoming A Billionaire (Forbes), Rated: A

With that I become the first public witness to the long, irregularly shaped basement office where GreenSky, America’s third-most-valuable fintech company (after Stripe and SoFi), has been incubating in obscurity for the past decade. And it’s Zalik who holds the golden ticket: Last September, GreenSky raised $50 million at a $3.6 billion valuation. The 43-year-old cofounder and CEO still owns more than half of the company, shooting him well into the billionaire ranks.

GreenSky’s real magic, however, is something you can’t see: a model that transfers much of the risk, as well as the work, to other parties–and profits from both sides of each deal. Those 17,000 contractors not only market the loans to homeowners but also pay GreenSky, on average, 6% of the loan amount.

From Illinois’ woes to the state of credit: Jamie Dimon lets loose (Crain’s Chicago Business), Rated: A

Obviously you’re a believer in online lending, given JPMorgan’s relationship with small-business lender OnDeck. Tell me how you see online lending going.

What the real issue in peer-to-peer lending is that the borrower will need the money in good times and bad, but the lender will not lend the money in good times and bad. The second there’s a recession, they’ll pull back. That’s exactly what you saw in February of last year when all of a sudden people were pulling back in giving money to the peer-to-peer lenders, who couldn’t then make loans. And they all got crushed. Some have been quite bright. So I think Chicago-based Avant has been quite bright, and they kind of anticipated this, and they created permanent capital. There are multiple ways to create permanent capital. Securitizations kind of work. But they don’t work in tough times. They disappear. Bank relationships work. There are ways to fix the problem. But that is an issue: Can you sustain your business model through the cycle? I think some of them will succeed.

Would you ever see banks getting directly into online consumer lending?

Remember, there is nothing online lenders can do that we can’t. ling With Insurance Companies Less Miserable

5 fintech trends disrupting retail banking (and how banks can fight back) (The Financial Brand), Rated: A

  1. Quick money transfer apps – Millennials have come to expect such an experience. Many banks and credit unions are starting to realize this, but they’re a little behind the eight ball.
  2. Chatbots and Messenger-Based Payments – Soon, you’ll be able to pay for that used TV you found on Craigslist by texting the seller directly from your phone’s messenger app, including Apple which turned on the Messagespayments functionality in June 2017.
  3. Forget the Card, Pay With Mobile Devices – On its own, this doesn’t seem like much of a Trojan horse for banks, but as more people shift behaviors so too will the expectations of banking customers. And with the global mobile payments market estimated to hit $3.4 trillion by 2022, it’s worth monitoring in relation to banking customers.
  4. Smart Budgeting and Personal Finance Management
  5. Digital Currencies That Don’t Require Central Banks

Fintech expert Maule to join British digital banking startup (American Banker), Rated: A

Fintech expert Sam Maule has been hired by nascent digital banking firm 11:FS to head up its expansion in North America.

Marketplace Lending Abs Fund Form D (Weekly Register), Rated: B

The New Jersey-based Marketplace Lending Abs Fund, Lp filed Form D for $2.75 million offering. This is a new filing. The Limited Partnership raised $2.75 million. The offering is still open. The total offering amount was $2.75 million. This form was filed on 2017-08-09.

Online Lending Policy Institute to Host Second Annual Summit in Washington, D.C. (Markets Insider), Rated: B

The Online Lending Policy Institute (OLPI), the leading voice for policy analysis, in-depth research, and education for the online lending industry, today announced it will host its Second Annual Summit on Sept. 25 at The Renaissance Hotel in Washington D.C.

Capital One VP Joins veteran-focused fintech firm (American Banker), Rated: B

A former Capital One executive has moved to StreetShares, an online lending and investing platform.

Heather Tuason, formerly senior vice president of small business at Capital One, is now the fintech startup’s chief product officer, it announced Tuesday.

EquityBuild Announces Master Class Webinar on Five Years to Wealth Through the Brand New Model (Benzinga), Rated: B

EquityBuild announces a new master class on the Power of Five, highlighting their new five-year investment model.

Here is the upcoming webinar master class to attend August 14, 2017:

EquityBuild Power of Five Master Class – Find out how this unique model changing the way investors view real estate. Join us for this special event here.

Labor Department delays fiduciary rule implementation date (Reuters), Rated: B

The U.S. Department of Labor will give wealth management companies more time to get in line with the new “fiduciary rule,” a regulation that requires financial advisers to put retirees’ interests ahead of their own, the regulator said on Wednesday.

Securities brokerages like Morgan Stanley and Bank of America Corp’s Merrill Lynch now have until July 1, 2019, to present retirement savers with new contracts that spell out the fees brokers make on certain investment products or transition them into accounts that charge a flat fee based on assets.

United Kingdom

LendInvest makes London Stock Exchange debut with £50m raise (Finextra), Rated: AAA

LendInvest, the UK’s leading online platform for property lending and investing, today listed a £50 million retail bond on the London Stock Exchange’s Order book for Retail Bonds (ORB).

The process to raise LendInvest’s first retail bond was closed early and oversubscribed, thanks to strong demand from retail and institutional investors. About half of the proceeds raised came from major financial institutions including several multi-billion pound asset managers, two global insurance businesses and a major UK state pension fund.

The bond pays a fixed annual coupon of 5.25% for five years, and is secured against a portfolio of property loans and guaranteed by LendInvest. From today, the bond trades under the LSE ticker LIV1.

P2P Lending: MarketInvoice Loanbook Snapshot (LinkedIn), Rated: AAA

MarketInvoice, founded in 2010, is the largest UK online P2P lending firm specialising in invoice discounting and invoice factoring. Selective invoice discounting is a facility that allows businesses to sell individual invoices at a discount in order to unlock immediate funding which can be an attractive solution for SMEs periodically strained with cashflow. In early 2017 the platform launched an additional product in the form of MarketInvoice Pro, an invoice factoring product that essentially is a debt facility which businesses can draw on backed by the business’s sales ledger.

Source: Sukhwinder Shoker

MarketInvoice celebrated its strongest origination quarter in 2017Q2 with £161.9m in invoices traded and a healthy 25.3% increase from the previous quarter. Annualised invoice origination growth (2013-2016) for the platform stands at 82.6% and, whilst encouraging, it is clear to see from the oscillation in monthly advanced funding that to-date annualised return performance has been highly influenced by seasonality trends.

Source: Sukhwinder Shoker

Invoice terms exceeding 60 days formed 28.3% of origination in 2016Q2, however, this has significantly increased to 58.2% of 2017Q2 origination.

Invoice originations have shifted away from riskier price grades since the introduction of Market Invoice Pro and this is welcome news for investors.

Meet Finimize: The fintech startup that turned a popular newsletter into a financial planning platform (Tech World), Rated: A

Rofagha quickly realised that the banks couldn’t help him, a financial advisor was unreachable with his income, and the rise of the robo-advisor hadn’t really taken off yet.

Then there is one of his favourite statistics: “86 percent of millennials save each month but they keep more than 50 percent of their assets in cash, because there is no suitable way for them to get financial advice.” This was his lightbulb moment.

Now Rofagha has launched the next phase, a financial planning platform called Finimize MyLife, which is currently in beta and has a waiting list of more than 24,000 people.

The Finimize MyLife platform is free to use and helps users create a financial plan by answering a few questions about their financial position, setting goals and then selecting from a range of options, be that opening an ISA or investing with a partner like Nutmeg or Moneyfarm.

The next steps for Rofagha will be to invest in data science so that the platform can make more tailored product recommendations for users, once it has built out its data set.

WiseAlpha opens up corporate bond market for investors (AltFi), Rated: A

Online lending platform WiseAlpha is adding corporate bond and loan investments to its platform.

Retail investors can now access Tesco’s £300m institutional bond that has a 4.8 per cent return.

Users can buy the debt for as little as  £100 and cash in their bonds via the secondary market on the platform. The grocers bond matures in 2042.

Six of the best alternative income ideas (IG.com), Rated: A

Looking at the ten years to the end of May 2017, inflation as measured by the Retail Price Index (RPI) rose 31.8%, while anyone receiving the Bank of England (BoE) base rate would have made a total return of 13.2%. In other words, cash in a bank account has lost 18.6% of its real value over ten years.

Over several years, the Investment Trust sector has seen huge growth in alternative income products, and here we list six products from sectors that investors may want to consider for inclusion in their investment allocations.

MARKET INSIGHT: OLD MONEY, NEW METHOD (Campden FB), Rated: A

Marketplace or ‘peer-to-peer’ lending can be attractive for family office investors for several reasons:

  • attractive absolute and relative returns compared to other fixed interest instruments
  • ability to create some granular/diverse portfolios through investment in loan parts
  • transparent credit process and loan pricing
  • ability to match maturity profile to desired outcomes

At present, the lack of a uniform set of standards places some obstacles for investors willing to invest across multiple marketplace lenders. The data structure, terminology, and methodologies differ greatly from platform to platform. However, good platforms are able to clearly demonstrate how loans are underwritten, an expected loss rate and basis for making investment decisions.

How can family offices engage with marketplace lenders?

Firstly, investors need to consider the asset class and risk profile they wish to invest in.

Secondly, investors need to consider how active they wish to be—in its truest form marketplace lender allow absolute discretion to bid on individual loans at whatever size suits.

Glint is a stealthy London fintech startup that promises to turn gold into a ‘new global currency’ (TechCrunch), Rated: A

Glint, a stealthy London fintech startup that promises a new “global currency,” has raised £3.1 million from a plethora of individual backers in the financial services and asset management space, alongside early-stage investor Bray Capital.

However, I understand that Glint will offer a frictionless way to both store and spend your money in gold, including at the point of sale, just like a regular local currency.

Railsbank, a new fintech startup from founder of Currencycloud, raises $ 1.2M led by Firestartr (TechCrunch), Rated: A

Railsbank, a relatively new fintech startup co-founded by CEO Nigel Verdon, who previously founded money exchange and payments platform Currencycloud, has raised $1.2 million in a funding round led by seed investment firm Firestartr.

The company, yet to see its full launch and over a year in the making, offers what it describes as an open banking and compliance platform aimed at other companies, including other fintechs, that have global banking requirements that need to be accessed programatically via an API.

China

China targets mobile payments oligopoly with clearing mandate (Financial Times), Rated: AAA

China’s central bank has ordered online payment groups to operate through a centralised clearing house, a move likely to undercut the dominance of Ant Financial and Tencent by forcing them to share valuable transaction data with competitors.

China is the world leader in mobile payments, with transaction volumes rising nearly fivefold last year to Rmb59tn ($8.8tn), according to iResearch. They are now widely used for everything from high-street shopping to peer-to-peer lending.

Now the People’s Bank of China is requiring all third-party payment companies to channel payments through a new clearing house by next June, according to a document sent to payment companies on August 4 and seen by the Financial Times.

Ant Financial, the financial services affiliate of Alibaba Group, is the market leader in mobile payments, with its Alipay unit processing 54 per cent share of all transactions in the first quarter of the year, according to iResearch. WeChat Pay, linked to Tencent’s mobile messaging app, held a 40 per cent share.

Big banks on notice that they’re losing ground to China’s fintech giants (SCMP), Rated: AAA

“JPMorgan every year, as we speak, processes through our QuickPay 94 million payments,” she said, “But Tencent, the Chinese company, over Chinese New Year, in five days processed 46 billion payments. Basically that means 800 million payments per hour.

“Visa has a maximum capacity of processing 25,000 payments per second. But Alipay can process 50,000 payments, twice as much, per second.”

The rise of online payments through non-bank services, exemplified by Alipay and WeChat Pay – which falls under the Tenpay umbrella – in China, has caused another banking giant, Goldman Sachs, to stand up and take notice too.

The firm recently published a report, led by Mancy Sun, which reveals the value of third-party payments in China grew more than 74 times from 2010 to 2016, from US$155 billion to a staggering US$11.4 trillion.

Of that total, 56 per cent took the form of peer-to-peer transfers while about 16 per cent was consumption-related. Furthermore, payments made via third-party payment companies comprised 40 per cent of all retail sales, a figure that is still growing.

Top3 Chinese block chain asset trading platform (the second-tier platforms) (Xing Ping She), Rated: A

First of all, how to define the Chinese second-tier platforms? We refer to the following three factors:

  1. It has been established for a long time, and there is little risk of failure for the company after a long-term market test and trials.
  2. Popular and profitable.
  3. It belong to the major currencies which are the top of the list. And it has certain dominance in a few currencies.

So, the TOP3 Chinese second-tier platforms are finally selected as:

BTC
Online date: May 2013
Website: btc38.com
Registered capital: 10 million
Office address: Shenzhen

CDC CloudCoin
Online date: April 2014
Website: yunbi.com
Registered capital: 10 million
Office address: Beijing

CHBTC
Online date: early 2013
Website:chbtc.com
Registered capital: 10 million
Office address: Zhongshan city, Guangdong province

China Commercial Credit Enters Share Exchange Agreement with Sorghum Investment Holdings Limited (Markets Insider), Rated: A

China Commercial Credit, Inc. (NasdaqCM: CCCR) (“CCCR” or the “Company”), a microfinance company providing financial services to small-to-medium enterprises (“SMEs”), farmers and individuals in Jiangsu Province, today announced that, it has entered into a share exchange agreement (the “Share Exchange Agreement”) by and through its Board of Directors and majority shareholder dated August 9, 2017 with the equity holders of Sorghum Investment Holdings Limited (“Sorghum”), an Internet platform specializing in providing peer-to-peer lending services to individuals and small business owners in China. Pursuant to the Exchange Agreement, the Company has agreed to acquire all of the issued and outstanding equity interests of Sorghum in exchange for 152,586,795 shares of the Company’s Common Stock (the “Acquisition”). Upon completion of the Acquisition, the Company will own 100% of Sorghum, and will be a financial services group operating in both smart financing as well as microfinance sectors in China.

Sina Corp Establishes $ 500M Online Finance Fund To Back Chinese FinTech Firms (China Money Network), Rated: A

Chinese Internet portal Sina Corp said it would establish an Online Finance Fund with a target fundraising size of US$500 million to invest in Chinese fintech companies.

Fintech is one of the most important opportunities in the next three to five years, Chao said during the call. The company believes that it can leverage its own online traffic, data, and microblog services Weibo to attract users and create a strong new brand.

Sina will focus on the business categories where it can obtain its own operating license, such as micro-lending. The company is currently offering micro-lending to users via a partnership with other financial firms, but it is in the process to get its own license.

LendIt Lang Di Fintech Names Omega One PitchIt Competition Winner (PR Newswire), Rated: B

LendIt, the world’s largest show in lending and fintech, named Omega One the winner of its Lang Di Fintech PitchIt competition in Shanghai on July 16. Out of eight PitchIt finalists (and hundreds of applicants) at China’s largest fintech conference, Omega One, an automated trade execution platform, was chosen as the winner for its innovation in the cryptocurrency markets.

As the winner, Omega One received a RMB 1 million investment from JadeValue and co-working space for six months. The company also received two tickets to LendIt USA 2018 as well as round trip airfare and full accommodations for the duration of the conference. The LendIt team will also curate meetings with fintech companies and investors during Omega One’s trip to the U.S.

Lang Di Fintech was held in Shanghai on July 15 – 16, 2017.

European Union

FinTech Group Counts on BearingPoint RegTech (BusinessWire), Rated: B

Management and technology consultancy BearingPoint, a leading provider of Risk and Regulatory Technology (RiskTech/RegTech), announced that FinTech Group AG, one of the leading providers of innovative financial technologies in Europe, included BearingPoint’s regulatory reporting solution ABACUS/DaVinci in its product portfolio.

International

Fintech startup brings blockchain and cryptocurrencies to invoice finance (GT Review), Rated: A

New fintech startup Populous is introducing smart contracts, blockchain technology and digital tokens to the invoice financing space.

Having raised more than US$10mn in crowdfunding in just five days, the company has now started piloting its new platform, which lets firms and individuals sell or buy invoices globally.

Australia

Locked out of property market? Five better places for Millennials to put money (The Sydney Morning Herald), Rated: A

Below are five better places to put your money as a young Australian in 2017.

Another investment opportunity emerging with the rise of fintech is peer-to-peer (P2P) or marketplace lending.

You input a few details into an online form, such as your preferred credit grade, loan term, and maximum amount you wish to invest in any one loan. The algorithm then does the rest on your behalf, and some lenders claim returns as high as 12 per cent per annum.

Women in Finance finalists revealed (TheAdviser), Rated: B

Online lender Prospa received nods in three categories — Alison Binskin, head of operations, made the cut for Fintech Leader of the Year, Lauren Davidson received recognition for Human Relations Professional of the Year and Anna Fitzgerald for Public Relations/Communications Professional of the Year.

India

Just Rent, Don’t Buy (Business Today), Rated: AAA

India has many consumer-lending companies, but there are very few consumer-leasing firms that borrow, convert the money into assets and lease them. RentoMojo does just that and says it has discovered the playbook fairly early, which could be used across categories and not just furniture.

There is one weakness in this model – it is capital intensive, and assets have to be bought before they can be leased.

Adukia, who looks after internal finances, says that the company has lines of credit with banks, non-banking financial companies (NBFCs) and high net-worth individuals (HNIs).

There has been no independent study on the market size of the consumer-leasing business, but the company claims it is about $10-12 billion. To stay on top of this market in terms of affordability, RentoMojo does not deal with middlemen and buys directly from manufacturers, says Nain. “We also act like a quasi-bank that takes a call on the creditworthiness of its customers [to protect our revenues].”

Is our banking industry facing existential crisis from fintech boom? (The Jakarta Post), Rated: A

Recent developments in the rise of Robo-advisers and investments in digital and P2P lending platforms, however, appear to support arguments on the contrary. Already we are seeing Alibaba dominating the payment scene in China while similar local companies like Go-Pay in Indonesia is also rapidly evolving into a commendable competitor of the banks in the payments scheme locally.

The level of threat does not go unnoticed within the banking professionals’ sphere. Based on a survey by PWC, about 81 percent of the banking and fintech players in Indonesia would see a degree of disruption in the way the banks are doing business, with which roughly 50 percent of them observe potential significant disruptions.

On the payment and settlements front, we have also seen how fintech has exposed the inefficiencies in the banks’ existing business processes. For example, in the cross-border interbank payment, the current average transaction costs for sending remittances abroad through bank average around 10.99 percent of the nominal amount globally, according to a report by World Bank. This is highly efficient and perhaps one of the catalysts for online remittance companies like TransferWise to exist.

Another study estimates suggest that mortgage borrowers in the US and European market could potentially save $480 to $960 per loan and banks would be able to reduce costs in the range of $3billion to $11billion by lowering processing costs in the mortgage origination process. Such figure further highlights the inefficiency in the banks’ current operating structure. The figure would likely be more substantial on the percentage basis if similar survey is conducted in Indonesia.

Asia

Globe Telecom’s Fuse to Provide Loans Powered by Mambu (Markets Insider), Rated: AAA

Mambu, the SaaS banking engine, today announced it will be powering the consumer and business lending products of Fuse, the lending arm of Filipino financial technology firm Mynt, by September 2017.

Mynt is increasing access to  financial services through mobile money, micro-loans and technology by leveraging the mobile and store networks of its partners and parent company in a country with 113% mobile penetration but only 31% banking penetration.

Micro, small and medium enterprises (MSMEs), which account for 99.6% percent of total registered companies in the country, as well as individuals face significant difficulty in accessing credit from incumbents due to stringent credit decisioning, limited authentication documentation and lack of collateral.

Singaporean fintech hub Lattice80 to launch office in India (Tech Wire Asia), Rated: A

LATTICE80, Singapore’s fintech hub will be opening an India branch at the end of September, as reported by Bloombergmarking the company’s first step in expanding their global operations.

The fintech hub is planning to open offices in world’s financial capitals, especially London, New York and cities in the Middle East.

MODALKU has become the first and only peer-to-peer (P2P) lending company to attain membership at the International Association of Credit Portfolio Managers (IACPM), a forum where financial institutions share and discuss best practices for credit risk management.

Modalku co-founder and CEO Reynold Wijaya stated that his team is focused on attaining international, even global standards.standards.

Authors:

George Popescu
Allen Taylor