Tuesday October 9 2018, Daily News Digest

LendingClub

News Comments Today’s main news: China Rapid Finance issues regulatory report, board change. H&M invests in Klarna. Tencent drops $180M into Nubank. KKR, Tencent lead $175M investment into Voyager. Today’s main analysis: Gen Z is more optimistic than millennials about home ownership. Today’s thought-provoking articles: The cities in America with the biggest houses. Inside Ameritrade’s integration with WeChat. Unemployment rate […]

LendingClub

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Startup Credit Kit; 48-year Low Unemployment Rate (PeerIQ), Rated: AAA

The US economy added 134k jobs in September and the unemployment rate dropped to a low of 3.7%  – a level not seeing since the Beatles broke up in 1970. Wage growth came in strong at 2.8%, and raises the specter of inflation down the road.

Point-of-Sale lending continues to grow, with Square now providing instalment loans of up to $10,000 to shoppers who purchase big-ticket items from Square’s merchants. Borrowers can repay in fixed monthly payments over a period of 3, 6, and 12 months with interest rates ranging from0% to 24%. The move puts Square in direct competition with other POS lending services – Affirm, Klarna, Greensky and more.

In regulatory news, the FDIC has received 21 banking applications this year, over twice the number for last year. The FDIC however has approved only 4 of these applications to date.

PeerIQ’s Learning of the Week

This week we look at the performance of LendingClub’s 36-month loans. Over the life of the loans, borrowers with verified income have 140 bps higher losses. This is due to a “selection effect” – namely, LendingClub applies an extra layer of income verification high credit risk borrowers.

Source: PeerIQ

LendingTree Reveals the Cities with the Biggest Houses in America (LendingTree), Rated: AAA

LendingTree compared home sizes across the country, but first, let’s look at some national data. The Census Bureau reports that the median size of new homes completed in the second quarter was 2,412 square feet. Home sizes have leveled off the past few years from a peak of 2,488 square feet in the third quarter of 2015, though homes sizes are generally larger today than they were for previous generations.  Because only a small proportion of the housing stock is new each year, the median size of all homes is lower given a median house age of 37 years.

Key findings

  • Everything is bigger in Texas. Whoever coined this phrase must have been thinking about real estate. Houston leads the list, with Austin and Dallas also in the top five. Besides having a lot of space, Texas has been adding new residents at a steady pace, with the nation’s largest annual population growth between 2010 and 2016. More new homes means larger homes.
  • South equals size. Other Southern cities dominate the top 10, with Atlanta, known for its sprawl, at No. 2.
  • Money talks. The Washington, D.C., area, whose suburbs includes the three wealthiest counties in the country, comes in third. Boston, another wealthy city, shows up at ninth.
  • Show me? The Midwest lives up to its unpretentious reputation by having the most cities with the smallest houses. Missouri’s Show Me State nickname clearly does not refer to houses, with its two largest cities both in the bottom 10.
  • Older is smaller. Cities with older housing stock have smaller houses, including Detroit at  No. 45 on our list.
Source: LendingTree
Source: LendingTree

More Optimistic Than Millennials, Gen Z Is Here to Revolutionize the Housing Market (Property Shark), Rated: AAA

Key takeaways:

  • Gen Z has its eye on homeownership, with 83% planning on buying a home within the next 5 years
  • College debt is the #1 obstacle towards homeownership for Millennials and Gen Z
  • Gen X chooses intergenerational living to care for relatives more often than any other generation
  • Gen Z is willing to compromise on almost anything to keep costs down – but dreams of lots of space and amenities
  • Gen Z to pose serious competition to Millennials on the real estate market
  • Millennials are more realistic about their means, and the most pessimistic about the prospect of homeownership
Source: PropertyShark

Whatever they may see as the most significant hurdle towards homeownership, more than 80% of respondents from all three generations expect to buy a home in the next 5 years. Part of more established family units and with stabilized careers, Gen Xers are the least likely to buy homes in the near future, while Millennials are the most likely – 87% of Millennial respondents expect to enter homeownership within 5 years.

Considering that the oldest of Gen Z are barely 23, it is noteworthy that a whopping 83% see themselves entering the real estate market within 5 years.

Source: PropertyShark

B+E announces sale of Darien TD Bank property for $ 6.9 million (Patch), Rated: A

B+E (Brokers+Engineers), the first brokerage firm and trading platform for net lease (NNN) real estate, today announced the sale of property that is leased long-term to TD Bank in Darien, Connecticut.

Located at 55 Boston Post Road, the +/- 4,380SF location was sold for $6,900,000 at a 5.1% cap rate. The property has +/- 7 years remaining on the lease and was sold to a 1031 exchanger. B+E represented the seller, Chimblo Family Real Estate, LLC.

Real Estate Startup Landis Raises $ 2M in Funding (Finsmes), Rated: A

Landis, a NYC-based marketplace for institutional real estate investing, raised $2M in funding.

The round was led by Signia Venture Partners with participation from Red Swan Ventures, Graph Ventures, and Kima Ventures, as well as the founders of RealtyShares (Nav Athwal), Compass, Floored, Tango, Rypple, and Stanford professor and JetBlue Chairman Joel Peterson.

Fintech firm Curve looking to raise $ 50 million to become the ‘Amazon of banking’ (CNBC), Rated: A

Fintech firm Curve is aiming to raise $50 million in funding, its CEO told CNBC in an exclusive interview, as it looks to get some cash to boost its aim to become the “Amazon of banking.”

Smartphone brand can reflect creditworthiness: FDIC study (American Banker), Rated: A

A new study released Thursday bolsters the case for lenders to use borrowers’ digital footprints in assessing their creditworthiness.

The paper, released by the Federal Deposit Insurance Corp.’s Center for Financial Research, said the data trails people leave online — even down to what brand of smartphone they use — are useful at predicting default rates.

Fed studies rural branch closings (American Banker), Rated: A

For a regulator grappling with what is the right balance in big-bank supervision, the Federal Reserve is also trying to drill down on industry trends at the most micro levels.

The Fed’s top regulatory official, Vice Chairman of Supervision Randal Quarles, gave wide-ranging remarks Thursday on the central bank’s efforts to gather and understand data about the community banking sector.

AFR Promotes Brandao to President and Packer to COO (Business Insider), Rated: B

American Financial Resources, Inc. (AFR) is pleased to announce two key executive promotions. Laura Brandao has been promoted to President and Bill Packer is now Chief Operating Officer of the NJ-based leading niche lender.

United Kingdom

Are there too many property investment platforms? (Development Finance Today), Rated: A

A recent poll conducted by Development Finance Today revealed that 65% of industry professionals believed that there were too many property investment platforms in the market.
Source: Development Finance Today

I’m Stephen Moss, the founder and managing director of Sourced (Property Investor Today), Rated: A

Established to match UK and overseas investors with hand-selected investment opportunities, we offer UK-wide investment advice and property sourcing through our 34-strong network of franchises.  This guarantees the same level of local knowledge and off-market opportunities, anywhere in the country.

Since we started in October 2017 our network has grown from one to 34 offices, we have launched a new peer-to-peer (P2P) lending platform and we’re building on our current position as the country’s largest property investment platform and network of property sourcers.  We’re also the first company to provide a free online training platform that gives investors of all levels of experience, the skills, knowledge and support they need to grow their portfolios.

Multiply: the new app that wants to put a financial adviser in everyone’s pocket (Evening Standard), Rated: B

Multiply is the latest fintech app launching on the Apple App Store, which wants to be your own personalised financial adviser so you can understand your money and the best things to do with it.

How Manchester entrepreneurs should begin investing (About Manchester), Rated: B

  • Peer to peer lending – you may have heard of popular companies in this investment sector such as Funding Circle. With peer to peer lending, you lend money to business start-ups to help them become established. When they are profitable you get your money back with any agreed interest.
China

China Rapid Finance Announces Regulatory Report & Board Change (Crowdfund Insider), Rated: AAA

China Rapid Finance Limited (NYSE: XRF) announced last week that it submitted its P2P Compliance Self-Inspection Report to its local P2P regulatory office. According to the online lender, this new report is considered the first of three steps mandated in the inspection process, a key element in demonstrating compliance with industry reforms being promulgated by the National P2P Rectification Office.

China Rapid Finance then explained it is focused on the next two process steps:

  • A self-disciplinary inspection conducted by NIFA and regional regulatory authorities
  • verification of inspection results by the regional P2P Rectification Office to conduct on field inspections

China Looks to Foreign Investors and Pensioners as Distressed-Debt Saviors (The Epoch Times), Rated: A

According to data from Bloomberg, China’s total balance of non-performing loans (NPLs) reached 1.96 trillion yuan ($285 billion) at the end of June 2018. To help lower this figure, China has been pawning off toxic loans onto foreign investors and unsuspecting pensioners.

Oaktree Capital Management in September acquired 115 NPLs for 2.4 billion yuan ($350 million) from one of China’s “bad banks” China Huarong Asset Management Co., according to Bloomberg.

The digital divide: inclusion must not create exclusion (The Finanser), Rated: A

There’s a legitimate concern that the change that’s happened in Chinese society since 2014 with regard to rapid conversion from cash and cards to mobile payments has been too fast for some. What happens to those left behind in the digital economy?

European Union

H&M buys $ 20 million stake in Swedish fintech firm Klarna (Reuters), Rated: AAA

Fashion chain H&M (HMb.ST) is acquiring a small stake in Klarna in what will be the Swedish online payments services firm’s largest partnership so far.

H&M is paying around $20 million for a stake of less than 1 percent, a Klarna spokeswoman said, confirming a Financial Times report on Monday.

Mintos partners with Trustly to offer real-time transfers (P2P Finance News), Rated: A

MINTOS, Europe’s largest peer-to-peer marketplace, has partnered with payments company Trustly to offer its customers the option to transfer funds in real-time from bank accounts across Europe.

Mintos said the collaboration with Swedish e-payments company Trustly will allow investors using its platform to transfer money in real-time from bank accounts across 29 European countries. This strips out the usual waiting time that is associated with conventional clearing systems.

Money laundering and backlogs dent ING’s image as tech leader (American Banker), Rated: A

Since taking charge of ING Group in 2013, Chief Executive Officer Ralph Hamers has labored to make it the most digitally advanced lender in Europe. His motto: disrupt yourself before a competitor does it first.

It’s safe to say the tumult at ING during the last few weeks isn’t what Hamers had in mind.

Equity Crowdfunding Platform Anaxago Launches Asset Management Firm Anaxago Capital (Crowdfund Insider), Rated: B

Anaxago is launching an asset management firm, Anaxago Capital, to attract more institutional investors and ready itself to fund larger projects. With this, Anaxago expects to double its outstanding investments by 2020.

International

China’s Tencent invests $ 180 million in Brazil fintech Nubank (Reuters), Rated: AAA

Chinese gaming and social media firm Tencent Holdings Ltd (0700.HK) paid $180 million for an undisclosed minority stake in Brazilian financial technology company Nu Pagamentos SA, both companies said on Monday.

Inside TD Ameritrade’s integration with WeChat (Tearsheet), Rated: AAA

TD Ameritrade continues to explore how to connect with its clients over different platforms.

The company, which has already launched experiences on Messenger, Twitter DM, Amazon Alexa devices and Apple Business Chat, has launched a chatbot for WeChat.

TD Ameritrade’s chatbot allows retail investors in Hong Kong to do their research, access market information, and get support through one of the most popular social and messaging platforms in Asia.

Celsius, Pays Interest To Crypto Depositors (CoinTrust), Rated: A

Celsius, a recently established cryptocurrency lending firm, has announced that it offers interest to thousands of users who deposit Bitcoin and Ether with its wallet application. Celsius claims to have won over 10,000 users since its mobile app was launched on June 29, with an average deposit of 0.5 BTC or 5.50 Ether earning as much as 6.7% per annum. Celsius generates the interest income by lending the crypto to hedge funds which open short position in the crypto market.

APAC

KKR and Tencent lead $ 175m investment in Philippines’ Voyager Innovations (Banking Tech), Rated: AAA

Telco PLDT, investment firm KKR and Tencent are part of a $175 million investment in Philippine digital tech company Voyager Innovations.

MENA

UAE-based startup Smart Crowd just got funded by Shorooq Investments (Startup MGZN), Rated: AAA

Smart Crowd, a new real estate crowd investing platform is just closed a Seed Funding round with $600,000 from Shorooq Investments, followed by Abaxx Technologies500 Startups, and other high-level strategic individual investors.

Authors:

George Popescu
Allen Taylor

Thursday October 4 2018, Daily News Digest

Wealthfront clients who engage with Path save 28% more

News Comments Today’s main news: Funding Circle tumbles. SoFi partners with Kukun. Petal raises $34M on launch day. China is losing its grip on P2P lending risks. ID Finance Mexico profitable after 8 months. Today’s main analysis: Wealthfront: Clients who engage with automated financial advisors save more. Today’s thought-provoking articles: The difference between LendingClub’s, Funding Circle’s valuations. Venture capital investment […]

Wealthfront clients who engage with Path save 28% more

News Comments

United States

United Kingdom

International

India

Other

News Summary

United States

Lending Club weighs in on Funding Circle’s float (Altfi News) Rated: AAA

Funding Circle’s landmark float is done. Its shares are now trading on the main market of the London Stock Exchange.

The stock closed at 364p yesterday, down almost 20 per cent. This was the result of trading during the period between its float last Friday and the stock’s official market debut yesterday.

Having first narrowed its share price to 440-460p per share, Funding Circle ultimately raised £300m at a valuation of around £1.5bn, approximately 15 times its 2017 revenues of £95m.

In an interview, Lending Club’s communications lead Anuj Nayar pointed to what he sees as an ‘incredible difference’ in the way that Funding Circle and Lending Club are currently valued.

SoFi Forms New Partnership With Kukun to Help Homeowners Understand the Remodeling Cost (Crowdfund Insider) Rated: AAA

On Tuesday, online lending platform SoFi announced it has formed a new partnership with home improvement platform Kukun to offer advanced new tools to help homeowners gain a greater understanding of how much their home improvement project could cost and how it can affect the resale value of their home.

SoFi reported that the tools will help homeowners estimate costs and returns on investment for over 28 project types that range in price from $10,000 to $300,000, including renovations and expansions. These are notably the first tools SoFi is offering related to its home improvement loans. Financial calculators that are built by Kukun are notably based on highly normalized and granular property condition marketplace data, in addition to normalized construction permit data (fresh and historic), as well as customer intent from the Kukun marketplace

Petal Card Announces $ 34 Million Round on Launch Day (Lend Academy) Rated: AAA

Petal, a startup aims to deliver on what we’ve often called the real promise of fintech: financial inclusion. The company describes itself as “credit with a conscience” and announced a new fundraising round of $34 million on the same day that they officially launched their credit card product to the public. Backing the vision is Jefferies and Silicon Valley Bank.

The funding will aid the roll-out to a waitlist which includes 100,000 people. The card is aimed at the tens of millions of Americans who have no credit score at all or a short credit history.

Wealthfront Research Shows Clients Who Regularly Engage With Automated Financial Advice Save More (PR Newswire) Rated: AAA

Today, Wealthfront released the 2018 Savings Report detailing the impact their automated advice engine, Path, has on their clients’ savings patterns. In the last year, the company has observed that consistent engagement with Path correlates with a 28% increase in a client’s savings rate. For a 32-year-old client with a $130,000 income and $100,000 in savings, this could mean an additional $1.25 million dollars at retirement.

Source: Wealthfront

Wealthfront’s goal is to fully automate financial decisions to what some people have called, “self-driving money.” Clients will be able to automatically deposit their paycheck into their Wealthfront account and the company will route their money appropriately based on the lifestyle and goals they’ve set. Bills will be automatically paid, emergency funds and 401(k)s will be topped off and Wealthfront will invest the rest in the most tax efficient way. To date the company offers a suite of automated financial planning, investment management and banking related services. To read the full report visit  to start saving and investing today download the app on iOS or Android.

Worldwide Business with kathy ireland Discusses Blockchain Empowered Real Estate Lending with Lending Coin (Digital Journal) Rated: A

Worldwide Business with kathy ireland is pleased to announce an exclusive interview with The Lending Coin’s CEO Sam Warren and CMO Mindy Ngo to discuss their new real estate blockchain program.

“We provide peer-to-peer lending around the world,” says Ngo. “By using the blockchain, we don’t have high overhead costs or errors like traditional financing. That’s why we are able to offer such low interest rates.”

Backed by Popular Bank, the platform is fully operational. With Highly experienced private banking professionals and dedicated office suites in each of its principal New York and Miami markets, the Popular private client program is well-positioned to cater to current and prospective clients.

U.S. Small Business Lending Keeps Rolling in August, According to PayNet (Business Wire) Rated: A

Small business lending continued its blistering pace in August, according to the latest Strategic Insights Report from PayNet, the leading provider of small business credit data and analysis. The Thomson Reuters / PayNet Small Business Lending Index (SBLI) seasonally adjusted originations increased 7% from 145.1 in July 2018 to 154.7 in August 2018, its second-highest reading ever. Year-over-year, the index is up 16%, marking its 11th consecutive increase over the prior year and the fourth double-digit year-over-year gain in the last five months. The rolling three-month index at 148.3 is relatively flat compared to July 2018 but is up 12% on the year.

The SBLI remained above 140 for the eighth consecutive month. The majority of industries experienced lending growth on an annual basis in August, led by Transportation & Warehousing (+20.4% Y/Y) and Mining (+9.7% Y/Y). Lending in Arts & Entertainment (+4.6% Y/Y) climbed to an all-time high in August, and more than half of industries achieved index readings in the top 25th percentile of all readings since 2005. Construction (+8.0% Y/Y) saw its strongest annual growth since November 2016 (despite weakening residential investment) due to strong investment in commercial and industrial structures. Regionally, lending increased across all ten of the largest states in August, continuing the widespread expansion seen in July. On an annual basis, regional growth was led by Texas (+15.3% Y/Y), Illinois (+12.3% Y/Y), North Carolina (+9.9% Y/Y) and Michigan (+9.4% Y/Y) — each of which saw lending reach record highs in August. Meanwhile, Pennsylvania (+7.9% Y/Y) and New York (+6.2% Y/Y) experienced their fastest year-over-year growth since mid-2015.

Making business analytics as easy to use as a smartphone (American Banker) Rated: A

A constant drumbeat in banking is that businesses require ever more data analytics to remain informed and competitive. Yet Envestnet|Yodlee acknowledged its data offerings were out of tune with customer expectations.

Its Envestnet Envision IQ platform, launched in May, offered up a variety of information concerning a bank’s customers and products, but it had no focus, according to a top executive at the data aggregator.

Branch managers will be able to create their own “playlist” of questions to be answered daily, he said, and the system will record and categorize questions asked into favorited questions and most-asked questions.

Source: American Banker

NetSuite angles for speed-to-market advantage over fintechs (American Banker) Rated: A

The biggest bank technology providers are revamping their most popular platforms to offer new features and reach more financial service sectors — all in the name of protecting market share from insurgent fintechs and pivoting peers.

Oracle joined the fray last week, announcing it was adding banking as a service to NetSuite, the venerable cloud-based enterprise resource planning platform it acquired for $9.3 billion in 2016.

San Jose, San Francisco and Boston are the Best Places for Boomer Entrepreneurs (PR Newswire) Rated: A

Key findings

  • San Jose – the seat of the Silicon Valley – is by far the best place for boomer entrepreneurs, with a final score of 93.6. In addition to representing high business income, San Jose boasts the largest share of boomer business founders.
  • San Francisco comes in second with a score of 86.5, thanks to remarkable earnings potential, relative to the other metros on the list, indicating that boomers are sharing in the general prosperity of self-employed entrepreneurs there.
  • Boston earned the third place on the list, with a score of 74.1.
  • New OrleansMiami and Orlando ranked last on the list, with scores of 16.4, 20.5 and 21.1, respectively.

See the full study here.

U.S. Bank Simple Loan 2018 Review (Nerdwallet) Rated: A

Cost: The Simple Loan costs $12 for every $100 borrowed, which translates into an annual percentage rate of 71%. That’s much cheaper than typical payday loans, where the average rate is 391%, and it’s due after three months, not the two-week cycle that is common of payday loans.

Auto-pay discount: U.S. Bank allows both auto-payments and manual payments. Manual payments cost extra, $15 per $100 borrowed, which is equal to 88% APR.

Payments are reported to the credit bureaus, so your score can increase if you make on-time payments.

RPA: the new tech transforming banking (Kyron Systems email) Rated: A

The number of U.S. banks has almost halved since 2007, from 8,400 to about 5,500 in 2017, and the reason is that it costs more. Rising AML and KYC compliance costs combined with regulatory fines are continuously putting banks out of business, especially small banks; U.S. Fed research indicates that adding just two new employees to a small bank’s compliance team would make a third of these banks unprofitable.

In response, banks are turning to a new field of virtual assistants: RPA, which stands for ‘robotic process automation’ but there are no actual, physical robots, rather virtual bots that run in the background on employee computers, learning what processes the bots can do instead, and then doing exactly that. Although RPA is being implemented in almost every industry, it dovetails particularly well with banking because there are so many repetitive processes that can be automated, everything from risk exposure calculations to compliance reports.

More information on RPA can be found here.

White Oak Healthcare Finance Closes Subsequent SNF Portfolio Financing for Granite Investment Group (Business Wire) Rated: B

White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as sole lender and administrative agent on the funding of a $28 million senior credit facility for Granite Investment Group (“Granite”). Secured by three skilled nursing facilities in Texas, the funds refinanced existing debt and provided a dividend for investors. White Oak recently announced it financed a separate portfolio of four skilled nursing facilities in Texas for Granite.

“We are happy to have had another opportunity to work with Granite. This transaction materialized as an opportunity to provide a bridge-to-HUD financing for an under-levered portfolio. As an active lender in the space, we can optimize our offerings to meet each company’s unique business needs,” said Isaac Soleimani, Managing Director and Partner at White Oak.

Granite Investment Group is a privately held, real estate investment firm focused on multi-family, senior housing, and post-acute care.

Volunteer Organization Tackling the Crippling Student Debt Facing Americans (Crazy Good Turns email) Rated: B

A new non-profit, Shared Harvest Fund has created an impactful way to pay down student debt.  Shared Harvest Fund has created a program that partners non-profit organizations in need of workers, with students looking to not only pay down their debt, but do something with purpose as well.  Once the connection is made, students volunteer a set amount of hours per month, and the non-profit organization in turn sends a check directly to the lender of the student’s choice.

The founders of Shared Harvest Fund; Dr. Briana DeCuir, Dr. Joanne Moreau and Dr. NanaEfua B.A.M,  will be featured on the October 17th Crazy Good Turns podcast, a non-profit podcast that shines a light on people and organizations making a positive impact in the world, to share the in’s and out’s of their platform and discuss in detail how students looking to pay down debt—or non-profits looking for volunteers—can be a part of the Shared Harvest Fund community.

Podcast Topics Include:

  • The founders discuss how and why they created the platform
  • The negative physical and mental consequences that carrying debt has on borrowers and the positive effects of volunteering to help others.
  • How unaware most students are about the length of time it takes to pay off student loans.
  • How corporations can increase their corporate responsibilities goals by supporting the Shared Harvest Fund.

Early-Stage Financial Technology Firms to Benefit from TransUnion and FinTech Sandbox Partnership (Business Wire) Rated: B

FinTech Sandbox today announced it has entered into a partnership with TransUnion to help early-stage financial technology firms launch in the marketplace. As part of the partnership, TransUnion’s Startup Credit Kit will enable startups to test business model concepts and refine their go-to-market strategies.

United Kingdom

Funding Circle rallies as it makes official market debut (The Telegraph) Rated: AAA

Shares in Funding Circle rallied as it made its official market debut on the London Stock Exchange today, in a move likely to quell fears over market uncertainty.

The peer-to-peer lender tumbled as much as 8pc in the company’s first official day of trading, falling well below the 440p per share it had floated at last week, before later jumping back up.

Around 20pc had been wiped off their value during conditional trading, which began last Friday and ran through to Tuesday evening. Shares dropped as low as 340p on Wednesday, before later rising to 390p.

Intrust Bank driving small business opportunities with Funding Circle partnership (Witchita Business Journal) Rated: A

The original partnership was announced in January. It expanded in June and Intrust increased its commitment to more than 500 loans.

Brian Heinrichs, CFO at Intrust, says the bank is now at around 400 of those commitments, though he declined to say what amount of lending that represented for the bank.

Heinrichs says Intrust is the only bank partnered in such a way with U.K.-based Funding Circle.

Funding Circle’s Desai makes top 10 of ‘Tech 100’ list (Peer2Peer Finance) Rated: B

FUNDING Circle’s chief executive Samir Desai has been named as one of the top 10 most influential people in the British tech industry.

The peer-to-peer pioneer appears alongside fellow fintech leaders such as Starling Bank chief executive Anne Boden, and Tom Blomfield, chief executive of Monzo.

The Tech 100 list is compiled by Business Insider and aims to celebrate “the 100 coolest and most ground-breaking people in the UK tech industry over the past 12 months”.

British banks shudder at Goldman Marcus launch (financial Times) Rated: A

Marcus by Goldman Sachs recently launched in the UK and the biggest high street banks are only beginning to grapple with what the new competitor means for the market.  Marcus has seen significant success in the U.S. market and is hoping to bring that to the UK, they currently have a savings rate offer 3 times the traditional powers and have plans to launch more products soon.

The news is not all bad for high street powers as data has shown customers thus far have stayed loyal to their bank and regulations around use of deposits make it a bit trickier for Marcus to repeat their U.S. model.

Keith Horowitz, analyst at Citigroup, tells the FT where the biggest opportunity could exist, “The big key for Goldman ultimately is customer data, that’s the holy grail for banking, creating an open financial marketplace platform that can also utilise their huge balance sheet.”

Orca Money opening up the peer-to-peer lending market to investors (Proactive Investors) Rated: A

LendInvest announce new bridging rate cuts (Property Reporter) Rated: A

Online property finance platform, LendInvest, has announced that it has cut rates across its Bridging product range and introduced a new Bridge to Term transition service.

The lender has cut rates on its Residential and Commercial Bridging, Development Exit and Auction Finance products. Monthly interest rates now start from 0.55% for Residential Bridging, Auction and Development Exit and 0.79% for Commercial Bridging.

A new Bridge to Term service has also been introduced that offers borrowers looking to purchase residential property at auction, undertake refurbishment or carry out minor development the opportunity to then switch to one of LendInvest’s Buy-to-Let mortgages.

Property Fintech LendInvest Adds CFO to Board of Directors (Crowdfund Insider) Rated: B

LendInvest, an online lending platform for property finance, has announced the addition of Chief Financial Officer, Angelie Panteli, to the board of directors.

China

China doesn’t yet have a grip on P2P lending risks (East Asia Forum) Rated: AAA

China’s online peer-to-peer (P2P) lending platforms have been falling like dominos. This has sparked investor panic, exposing deeper risks long hidden in China’s shadow finance sector. It is yet to be seen if Chinese regulators will be able to manage the risks and effectively regulate P2P in the same way they have done in other areas of shadow banking.

Shadow banking from institutions supervised by empowered central regulators is shrinking. One of the best ways to measure shadow credit funded by banks is through their lending to non-bank financial institutions. It rose 80 per cent year-on-year in February 2016, but over the last year has shrunk by 4 per cent.

The number of surviving P2P platforms has been on a gradual decline since November 2015, but regulators were caught off guard when failures suddenly accelerated in mid-June 2018. Investors began to panic and tried to pull their money out, sparking yet more failures. Many protested for government help when they found that their savings had been stolen or sunk into bad loans.

Outstanding loans then plummeted by 300 billion RMB (US$44 billion), from 1.3 trillion RMB (US$190 billion) to just under 1 trillion RMB (US$146 billion). They fell again in August, but the outflows and failures moderated. The storm may have passed, leaving most platforms intact for now.

European Union

German Challenger Bank Kontist Secures Series A Investment (Crowdfund Insider) Rated: A

Kontist, a Berlin-based challenger bank, announced on Tuesday it secured a Series A investment to expand the financial services available to freelancers, small businesses, and entrepreneurs. The round was led by Haufe Group, one of Germany’s providers of digital workplace solutions and services with participation from existing investor Danish company builder, Founders.

International

VC Investment in Blockchain Startups Is Up 280% So Far This Year (CoinDesk) Rated: AAA

As the crypto industry sees a decline in initial coin offerings (ICOs) amid regulatory concerns and major losses across token markets, traditional VC investment is once more on the rise.

In its latest report, blockchain research group Diar reports that blockchain and cryptocurrency-focused startups have raised nearly $3.9 billion through VC investments in the first three quarters of the year – that up 280 percent when compared to the whole of 2017, it says.

Based on data from Pitchbook, the report indicates that number of deals also nearly doubled this year.

Source: CoinDesk

Alongside the increase in VC deals, the average size of crypto and blockchain investments has increased by over $1 million in 2018. Ten of the largest blockchain and crypto investments in 2018 saw the recipient companies raise more than $1.3 billion in total venture capital. While one of the firms has a native token (DFINITY), the rest represent equity investment, says Diar.

Source: CoinDesk

Tencent-backed mobile bank N26 launches in the UK and plans US expansion by early 2019 (CNBC) Rated: A

German app-only bank N26 has launched in the U.K. and is eyeing another expansion to the U.S. in the first quarter of 2019.

The Berlin-based firm, which is backed by Chinese tech giant Tencent, German insurer Allianz and PayPal co-founder Peter Thiel, said on Thursday that its services are now available in Britain, on a limited basis.

Initially, a select number of “early adopters” will be given access to the app in the U.K. More than 50,000 people who have signed up to a waiting list for the U.K. launch will be on-boarded on a phased basis, and a broader launch is planned for next month.

India

Here is Why Flipkart is Keen to Enter the Financial Services Sector (Entrepreneur) Rated: AAA

Looks the Indian startup’s ecosystem is smitten by the opportunities fintech industry is benefiting of. No wonder, we have unicorn startup companies such as the Flipkart looking into tap the market.

Market buzz says that Flipkart is in the middle applying for an NBFC license to extend the line of credit to its sellers and customers. With time, it would expand its financial services offerings beyond its e-commerce platform.

The credit problem in India is beyond surreal. For example, the small and medium enterprises sector (SMEs), which contributes between 30-40 per cent in the country’s GDP, suffers majorly because of its unattended financing need and the gap is as big as around USD 650 billion.

Giving an example of the consumer lending space, Gaurav Chopra, Founder & CEO, IndiaLends says this segment is expected to be a USD 1.2 trillion opportunity for the organised lenders, implying a 22 per cent compound annual growth rate over the next three years.

Credit Card EMI vs P2P Loan: Which one should you opt for? (Economic Times) Rated: A

Credit cards can be extremely handy when it comes to making an impulsive high-ticket purchase. All you have to do is to flash the card and walk away with your purchase. Many credit card companies would immediately offer you an option to pay back the money in equated monthly instalments or EMIs.

Compared to credit cards, personal loans can be cheaper. “Credit cards can charge somewhere around 0.1% every day. Making the annual charges go up to 36% in some cases,” says Tanwir Alam, Founder & CEO, Fincart.

P2P loans, unlike the usual bank loans, offer short-term tenures starting 3-36 months and can be looked as an alternative to credit cards, depending on the requirement of the borrower. The interest rates are anywhere between 12 and 28%.

Aadhaar verdict sends fintech players back to the drawing board (The Week) Rated: A

The recent Supreme Court verdict on Aadhaar may bring in tough times for the fintech companies who used to conduct eKYC (electronic Know Your Customer) via Aadhaar. Not mandating Aadhaar for the verification process has sent some fintech players back to the drawing board to work out strategies for physical verification, which is usually a time-consuming and expensive process. Experts and industry representatives with whom THE WEEK spoke to feel that verification of customers will eventually move to a traditional mode of verifying individuals through physical ID proof.

Bhavin Patel, CEO and co-founder of LenDenClub, a P2P digital lending platform, says that a physical KYC check takes around 24 hours or more now in an ideal scenario and this change in processing will result in longer disbursal time and higher cost for the consumer.

Asia

VN Central Bank working on framework for P2P lending (Vietnam Net) Rated: AAA

Anh spoke at a recent workshop on international experiences in P2P lending held in Ha Noi with the participation of more than 100 representatives, including financial management authorities from China, Singapore, Thailand and Indonesia.

With the rapid proliferation of mobile devices, artificial intelligence and big data, P2P lending—the practice of lending money to individuals or businesses through online services that match lenders with borrowers—has developed rapidly around the world in recent years.

Although P2P can create enormous socio-economic benefits, it also contains potential risks for the relevant parties, he said, adding that it is necessary to strictly monitor this field to mitigate the risks and improve awareness of the relevant parties.

Through this model, lenders can earn higher returns than they can get from banks while borrowers, especially individuals and micro businesses, can get money at lower rates. But the lending is also fertile ground for high-tech crimes. China had to eliminate some 160 online lending companies as they were in fact high-tech criminals working to cheat investors.

Latin America

ID Finance Mexico operations reaches profitability within eight months of launch (Finextra) Rated: AAA

The Mexico operations of ID Finance, the emerging markets fintech company, has reached profitability in just eight months since launching in the region.

The announcement represents a key milestone for the business as it continues its rapid expansion across Latin America. It currently operates in Mexico and Brazil.

Authors:

George Popescu
Allen Taylor

Streamlining Mortgages With Online Lending Solutions for Banks

Roostify online mortgage lending

Rajesh Bhat and his wife were evaluating various ways of arranging finance to purchase a home in 2012 without a real estate agent. The experience made them realize how complex and time-consuming the process of home buying was. This led to Bhat spending a year identifying gaps in the home mortgage sector and, in 2014, […]

Roostify online mortgage lending

Rajesh Bhat and his wife were evaluating various ways of arranging finance to purchase a home in 2012 without a real estate agent. The experience made them realize how complex and time-consuming the process of home buying was. This led to Bhat spending a year identifying gaps in the home mortgage sector and, in 2014, with a seed capital of $200k, he launched a customized mortgage software solution.

What is Roostify?

Located in San Francisco, Roostify is focused on delivering an accelerated and transparent online mortgage experience for consumers. The company aspires to digitize mortgage lending and eliminate paper-based processes. Today, the company partners with dozens of banks, brokerages, and lenders who depend on the company to speed up processing, reduce unnecessary paperwork, and provide a 21st century digital experience to its mortgage borrowers.

Roostify aims to provide a transparent, fast, and simplified mortgage process to its customers. Bhat is its CEO and founder. The firm allows borrowers to enjoy a complete digital mortgage experience and emerge as the end-to-end solution for lenders from the lead stage of home buying to closing.

The company has raised over $33 million from investors with $25 million coming in its Series B round in February 2018 led by Cota Capital, and secured marquee investors like Santander, JP Morgan Chase, and Point 72.

How Roostify Works

The world is digitizing in every sphere of life. Real estate buyers manage to research and shop online for loans; however, the loan application process (especially for traditional street banks) is still offline. With an average home loan taking 40 days and $8,000 to process, the system is definitely broken.

Roostify wants to change the narrative for banks by providing the best possible experience through its proprietary mortgage application software.

Roostify exists entirely on the public cloud providing a private label experience through customer access using Amazon Web Services (AWS). Consumers access the bank’s website with access to Roostify’s AWS solution.

The company charges banks on a subscription basis. The pricing is structured on the amount of closed loans. There is an initiation fee, and other fees are charged on the basis of the features the banks choose.

Roostify’s Relationship With Its Customers (Banks)

The Roostify platform is built around a customer-centric approach to effectively manage the customer relationship (CRM) apart from incorporating automation, digitization, and collaboration. Roostify focuses on saving time by obtaining complete information online and facilitating easy decision-making, thereby eliminating the lengthy processes of physical documentation. Consumers (i.e. borrowers) have access to view the loan’s progress through Roostify’s mobile-accessible, online application. The best part about the application experience is that the platform offers a customizable interface to provide unique user experiences.

Roostify’s platform handles the workflow, paperwork, activity, signings, etc. to provide a true enterprise solution. It is developing continuously, bringing more and more flexibility in its working while it looks for opportunities to integrate with third-party developers.

The Application Programming Interface is built out according to the customer’s requirements. Roostify’s platform, unlike other players that are involved in simple applications, document capture, and other solutions provide an end-to-end customer experience. Some customers have seen a 20% increase in sales funnel volume while others have seen a 40% reduction in closing times.

Partnerships

Roostify has successfully established partnerships with a variety of consumer finance, real estate, and mortgage processing systems in order to ensure an improved digital experience for all the stakeholders in the ecosystem. Recently, Roostify integrated with LendingTree, the leading online loan marketplace, to expand the platform together and provide consumers the additional facility of applying online with the right lender.

Apart from LendingTree, Roostify has partnered with other lead generators like BOK Financial to ease and diversify the process of loan shopping for consumers. Customers see new leads and new business as a result of Roostify’s integration with its partners to enable true online fulfillment. The company’s client roster includes JP Morgan Chase, Bank of Oklahoma, Georgia Credit Union, and others. It is also looking to expand abroad and diversify from its core mortgage offering to other solutions in the fintech space.

Roostify has achieved healthy volumes of loan originations. In March 2018, its loan transactions topped $5.5 billion.

Key Trends in Mortgage Lending

According to Bhat, banks are beginning to figure out how to transact in the online space and rethinking how they acquire customers online. Soon, the entire process will be digital. Also, with data moving online, there is tremendous opportunity for growth in applying machine learning and artificial intelligence to the lending process. Another trend that is shaping fintech is its evolution from B2C focus to B2B specialization. Banks are now comfortable getting technology from fintech startups, and it is a win-win opportunity for all stakeholders.

The company dominates this niche, primarily because the competition is low. Instead of focusing on B2C lead generation, the company has taken the smarter route towards creating enterprise technology for existing lenders. Its latest funding round highlights the Silicon Valley pivot towards B2B fintech players whose business models do not involve burning cash on Google Ads to acquire customers. Roostify is taking that business model to mortgage lending.

Author:

Written by Heena Dhir.

Friday March 2 2018, Daily News Digest

Seed

News Comments Today’s main news: How Funding Circle wants to fix the financial system. VPC Specialty Lending, Ranger Direct see dividends move up. Klarna triples net profit, mainly in Nordic countries. Today’s main analysis: International P2P lending volumes. Today’s thought-provoking articles: Can Seed solve banks’ digital onboarding issues? How banking institutions can decentralize (The best read of the day). Institutional […]

Seed

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United States

This neobank believes it can solve banks’ digital onboarding problem (American Banker), Rated: AAA

Since 2014 the neobank Seed has been reimagining one of the sleepier areas of banking: deposit accounts for small businesses.

Rather than walk into a branch — Seed, of course, has none — yoga instructors, food truck owners and other would-be customers can apply for accounts in less than five minutes on the startup’s web or mobile app. If approved, they receive a business debit card in the mail.

Now Seed, led by veterans of the fintech Simple, is selling banks software to help them solve one of their most pressing problems: finding a way to open accounts online as branch transactions continue to decline.

Source: American Banker

Lendio Franchise Announced in Clemson Region (Lendio), Rated: A

Lendio, the marketplace for small business loans, today announced the opening of a new Lendio franchise in the Clemson, South Carolina Region. Through the Lendio franchise program, Andy Ronemus will help local businesses in the community apply for loans, review their options and secure funding, easing the financial hurdles for small business owners.

In A Time of Need, A Woman Rises To Disrupt Fintech In Puerto Rico (Forbes), Rated: A

One notable leader in this endeavor is 

Fintech Startup Magilla Wants to Be the Match.com of Loans (Big Law Business), Rated: A

Since its launch in January 2016, Sacramento-based startup Magilla Loans says it’s originated more than $5 billion in loans and is changing the way lenders connect with borrowers. The platform can shrink into a few days what can often be a weeks- or months-long process of loan applications, data submissions and waiting just to get a loan term sheet.

Crowdlending helped Shorewood business woman’s dreams come true (tmj4), Rated: A

One Shorewood businesswoman did this all on a website called Kiva.

Shelia Long’s business is a workspace that helps ladies who work from home come together to get inspired.

“It was so great as the loans were coming in you can see like Switzerland, Boston, Carlsbad, Texas,” said Shelia Long.

One-hundred-thirty-seven people in total used PayPal to help her get to a goal of raising $8,000 at zero-percent interest.

Validus Specialty Launches Package Policy for Fintech Companies (Crowdfund Insider), Rated: A

Validus Specialty Underwriting Services, Inc. (Validus Specialty) announced on Thursday a comprehensive package policy specifically designed for private U.S. fintech companies. According to the company, the solution is designed to address Fintech’s complex risk management needs, which are traditionally underserved by incompatible and inadequate policy forms.

What’s next for marketplace ABS? Revolvers, ETFs & IOs (Asset Securitization Report), Rated: A

Last year, marketplace lenders learned that maintaining diverse sources of funding is just as important as managing the credit risk in their loans.

LendingClub, Marlette Funding and others developed their own securitization platforms, rather than relying on whole-loan sales to large investors. They also invited some of these investors to contribute seasoned loans to collateral pools for these in-house deals.

INSTITUTIONAL INVESTORS WARY OF PASSIVITY (All About Alpha), Rated: AAA

Geopolitical events are the most worrisome prospect on the minds of the decision makers at institutions looking ahead to 2018. The percentage of respondents who believe such events will have a negative impact this year is at 74%. The second most worrisome? Asset bubbles (65%).

More than three fifths (63%) of those surveyed said that the growth of passive investing has increased systemic valuation risk: 59% believe that flows into passive strategies artificially suppress volatility.

In 2015, Natixis found that 64% of institutions said they were upping their investments with active managers. In 2016, that number rose to 67%. In the latest survey it rose again, to 68%.

Be cautious when seeking income (Money Week), Rated: A

But Square Pie had sold bonds on the Crowdcube platform, offering lenders 8% a year. It illustrates why so many people are suspicious of mini-bonds (debt issued by small, retail-orientated firms). Anyone thinking of lending to just the one relatively new business has to be aware of the risks – and then ask: is 8% enough?

A more diversified option

The latest offering in this category comes from a platform called Goji, which aggregates a variety of direct-lending and peer-to-peer (P2P) platforms. It has just brought out a Renewables Lending Bond, which pays out anything from 5.5% for a three-year term (with regular income) to 7.6% over five years, where the interest is rolled up at repayment. The underlying assets are provided by a direct lender called Prestige Group, which lends to clean-energy projects.

The book of loans – around 39 – has an average duration of four years, with a typical loan-to-value ratio of between 70% and 80%.

2018 LightStream Home Improvement Survey (PR Newswire), Rated: A

More than half (58 percent) of homeowners are planning to spend money on home improvement projects in 2018, according to the fifth annual LightStream Home Improvement Survey. LightStream is the national online lending division of SunTrust Banks, Inc. (NYSE: STI). Budgets for renovations are on the rise: among homeowners planning renovations, 45 percent will spend $5,000 or more — an all-time survey high. Those planning to spend $35,000 or more doubled from 2017.

The survey shows robust enthusiasm for renovation, as well as a thoughtful desire to balance a home’s needs and the homeowners’ budget, so they have the financial confidence to move forward. Specifically, the survey revealed the following trends:

    • Home “Sweat” Home
      The majority of homeowners plan to invest sweat equity, as 65 percent say they’ll do at least some of the work themselves. The 18-34 group is particularly fond of do-it-yourself projects, with 70 percent planning to work on at least a portion of their renovation.
    • Staying — and Aging — in Place
      Only seven percent of homeowners are renovating to prepare their homes to be sold, the lowest percentage since 2015. Instead, 14 percent of homeowners across all age groups — not just baby boomers — are citing “aging in place” as a reason for making a home improvement. Even respondents aged 18 to 34 (11 percent) and 35 to 44 (10 percent) say they’re renovating “to prepare my home so I can stay in it as I get older.”
    • Tax Reform Boosting Budgets
      With recent passage of tax reform, homeowners have already begun calculating how the changes might affect what they spend on home improvements. One in four homeowners who have set a budget for renovation projects stated that tax reform has had an impact, with 18 percent increasing their budget and seven percent decreasing it.
    • Paying for Projects
      The majority of homeowners (62 percent) plan to pay for projects, at least in part, by using savings. Additional payment strategies were further revealed. Intent to fund through home equity lines of credit (HELOC) jumped from 10 to 13 percent. “U.S. economic growth and limited housing inventory have contributed to healthy home equity gains,” said Ellen Koebler, SunTrust head of consumer solutions. “HELOCs can offer a financial solution for many homeowners, as accrued value may be available to tap for renovations.”

At the same time, the percentage of people intending to use a home improvement loan has grown 29 percent from 2017 with 54 percent more 18- to 34-year-olds planning to fund projects through home improvement financing.

Crowdfunding your way to homeownership (Mic), Rated: A

According to recent research from the National Association of Realtors®, 24% of buyers under age 36 saved for their down payment for more than two years.

NAR research also found that 25% of homebuyers ages 36 and younger used a gift from relatives or friends for some or all of their down payment.

Platforms have popped up that simplify this process: HomeFundMe, which launched last year, and Feather the Nest.

An estimated 1,500 “nesters” have used Feather the Nest to crowdfund a down payment since 2014, according to company president Beth Butler, with an average goal of $10,000 to $15,000.

JPMC’s FinLab Launches $ 3M Contest For FinTech Startups (PYMNTS), Rated: B

To help identify FinTech products that may improve the financial health of underserved populations in the U.S., the Financial Solutions Lab (FinLab) launched its fourth annual $3 million challenge. The lab focuses on products that meet the financial needs of overlooked populations, JPMorgan Chase said in an announcement.

Accounts in Transit (O’Dwyer PR), Rated: B

Kwittken signs up Laurel Road, online lender of student loans, personal loans and mortgages. Aaron Kwittken’s firm will be responsible for raising awareness of the company’s products through content marketing, brand activations, thought leadership and traditional media relations. Laurel Road, which is part of Darien Rowayton Bank, recently surpassed $3 billion in student loan originations.

United Kingdom

Keeping the little guys in the loop: How Funding Circle hopes to fix the financial system (City A.M.), Rated: AAA

“When we think about the people we hire, it’s all about energy,” says Funding Circle co-founder James Meekings. “We want staff to share their excitement about what they do with others in the office – even if they’re talking about tax.”

“Even though we now have 800 employees, we still feel like a small business. We still push for opportunity and for people to be creative.”

VPC and Ranger funds see dividends tick up, but remain below target (AltFi), Rated: AAA

The £219m Ranger Direct Lending and £337m VPC Specialty Lending investment trusts have announced their latest quarterly dividends with both portfolios showing an uptick since their last pay-outs.

Leeds offers business loans through peer-to-peer platform (Room151), Rated: A

Leeds City Council is to use a peer-to-peer lending platform to lend money to local businesses.

The authority has decided to use the rebuildingsociety.com platform — based in the city — to provide money for small and medium sized businesses with an LS postcode.

Isas 2018: Innovative Finance Isas hit stumbling blocks (Financial Times), Rated: A

Innovative finance Isas (IF Isas) offer the promise of a good return, sheltered from tax, to investors willing to take on the higher risks of the peer to peer (P2P) finance market.

The market has taken longer than expected to ignite, however, as providers struggle to match growing demand with limited supply. Many new investors will find the door shut, at least for now.

Growing consumer indebtedness in the UK combined with the prospect of rising interest rates could push up default rates on loans, sharpening the dangers for those invested in the highest-risk P2P products.

How does the Isa allowance actually work? (Which?), Rated: B

For the tax year 2017-18, the maximum amount you can pay into one – or a combination – of Isas held in your name, is £20,000.

Once the new tax year for 2018-19 begins on 6 April, your allowance resets – once again to £20,000.

There are five main types of Isas. The current annual limits are as follows:

  • Help to Buy Isa: Money can only be used to buy your first home, and savings receive a government bonus of 25%. You can save £1,200 in the first month, then £200 per month thereafter. Therefore, in the first year you will have a limit of £3,400. In the following years the limit will be £2,400.
  • Lifetime Isa: Expressly for first-time buyers or to be used in retirement once the account holder has reached the age of 60. There’s a 25% government bonus on savings up until the account holder is 50 years old. You can pay in up to £4,000 per year.
  • Cash Isa: A traditional savings account – money you pay in grows with the provider’s interest rate. You can pay in up to £20,000.
  • Stocks & shares Isa: Money you deposit is invested in stocks & shares by the provider. Returns can be higher, but so is the risk that you may end up with less money than you paid in. There will also usually be fees involved for managing your investments. You can pay in up to £20,000.
  • Innovative finance Isa: Money paid in is invested in Peer-to-Peer (P2P) lending platforms, and you receive the interest when this loan is repaid. There is also some risk involved. You can pay in up to £20,000.
European Union

Klarna’s profits driven by growth in Nordics and Germany (Financial Times), Rated: AAA

The Swedish group posted a 27 per cent increase in revenues to SKr4.53bn ($546m) while net profit more than tripled to SKr346m. Klarna processed about €18bn in online transactions last year, an increase of 42 per cent.

Klarna reports double-digit sales growth (Finextra), Rated: A

As a result, 89,000 retailers globally now use Klarna products, this represents a 20% growth compared to the previous year. Available in 14 countries, retailers are increasingly adopting Klarna solutions which makes the payment processes as smooth as possible for consumers. As a result of the surge in retailer adoption, Klarna now handles 10% of all online payments in Northern Europe.

International

How Banking Institutions Can be Decentralized (CoinTelegraph), Rated: AAA

Decentralized banking is a term that has been construed in the wake of the cryptocurrency boom.

Cryptobanks are decentralized platforms that provide the usual services that centralized banks provide, primarily lending services and credit scoring, but essentially cuts out all of the middlemen that a centralized bank uses. The people needed in a bank to approve loans and structure financial data are replaced in a crypto banking ecosystem by smart contracts and p2p, peer-to-peer, services.

What kind of technologies do crypto banks use?

P2P, Blockchain, cryptocurrencies, Machine Learning, Big Data and smart contracts are used in crypto banking.

All transactions are recorded on the Blockchain.

Machine Learning Big Data.These technologies help to automate the lending process and cut through bureaucracy. AI can work 24/7 and match lenders with borrowers.

Do crypto banks have their own native currency?

Yes. Native cryptocurrencies help make the bank global.

Datarius, the first social p2p crypto bank, for instance, uses their own native token DTRC for all transactions. This helps create a standard for a global payment system within the p2p lending process.

What is social lending?

Thanks to Big Data and AI, crypto banks can see beyond a borrower’s credit score to identify their level of trust. Listings can include Trust Limit, Trust Management and User Ratings which helps AI decide if the participant is justified in borrowing from a specific lender.

Crowdlending: Anatomy of a successful strategy (EurekAlert!), Rated: A

The entrepreneur’s strategy for achieving this can be summarized in three stages. The first consisted of bypassing the banking monopoly on his platform using “cash vouchers,” a tool dating from 1937 that had long been forgotten. They allow personal loans to be made without a bank as intermediary. Secondly, by collaborating with future competitors, the public authorities and the sector’s regulators(2), the entrepreneur contributed to the development of a long-term crowdlending regulation in France. This collaboration relies on the creation of a meta-organization(3) called “Financement Participatif France” (FPF), which worked to define the status of “Intermédiaire en Financement Participatif” (IFP, equivalent to “crowdlending financing intermediary” in English), which regulates this new market.

Asia

Smartag International Signs Agreement to Provide Fintech Solutions to Rural Indonesia (PR Newswire), Rated: A

Smartag International, Inc. entered into a joint venture agreement with PT. Supratama Makmur Sejahtera (“PTSMS”), an Indonesian Fintech company to form a Joint Venture Indonesian PMA company in which Smartag will own 51% equity and PTSMS will own 49%. This follows an earlier MOU signed on October 12, 2017 between PTSMS and PT Rijan Dinamis Selaras (“RDS”) representing Pondok Pesantren Riyadhul Jannah Pacer Mojokerjo, founder of Consultative Assembly of Indonesian Boarding Schools which has a network of 28,000 boarding schools to undertake a Fintech project (the “Indonesian Project”).

Authors:

George Popescu
Allen Taylor

Thursday January 4 2018 Daily News Digest

most funded fintech segments

News Comments Today’s main news: U.S. blocks Ant Financial from buying MoneyGram. Victory Park exits Prosper. Money360 closes $500M in CRE loans. Prosper appoints new marketing chief. Indian startup funding at 3-month low. LaLa World Global to launch token sale. Today’s main analysis: International P2P lending volumes for December 2017. Today’s thought-provoking articles: LendingClub to turn around in 2018. Top hedge […]

most funded fintech segments

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United States

The U.S. Is Blocking a Chinese Fintech Giant from Buying MoneyGram (Technology Review), Rated: AAA

American authorities have decided that Alibaba’s digital payment firm, Ant Financial, won’t be allowed to acquire the cash transfer company Moneygram.

Money360 Passes $ 500 Million in Commercial Real Estate Loans Closed (GlobeNewswire), Rated: AAA

Money360, a technology-enabled direct lender specializing in commercial real estate (CRE) loans, today announced it has surpassed half a billion dollars in loans closed since inception. This includes $357 million in loans closed for the year 2017.  The milestone comes on the heels of other recent successes for Money360, including the initiation of a partnership with Ten-X, the nation’s leading online real estate transaction marketplace, in which Money360 works to accelerate commercial real estate transactions for buyers, sellers and brokers by offering pre-approved financing for qualified properties and buyers.

Money360 specializes in bridge and permanent loans of $1 million to $20 million. Recent loans closed during the period include:

  • A $7.8 million bridge loan for an office property in Evansville, Indiana, brought to Money360 by Benjamin Kadish at Maverick Capital
  • A $7.5 million bridge loan for a full-service hotel in Cromwell, Connecticut, brought to Money360 by Rushi Shah at Conlon Capital
  • A $6.8 million bridge loan for a nationwide portfolio of Pier 1 retail properties, brought to Money360 by Al Dannatt at Commercial Resource Capital
  • A $6.8 million bridge loan for a mixed-use center in Charleston, South Carolina, brought to Money360 by Dominick Scorzo at Ivenhoe Capital Advisors
  • A $4.4 million permanent loan for a retail center in Mount Olive, New Jersey, brought to Money360 through our partnership with Ten-X
  • A $4 million bridge loan for an office building in Amarillo, Texas, brought to Money360 by Steve States at States Mortgage
  • A $3.2 million bridge loan for a retail center in Santa Fe, New Mexico, brought to Money360 by Martin Chera at Express Mortgage

In addition to record loan generation activity and new partnerships, Money360 has taken a number of notable steps in 2017 to further position the company as a leader in commercial real estate and alternative investing, including:

  • Hired new top talent to support company growth.
  • Named a top five company in the real estate fintech industry by Deloitte based on total investment dollars received.
  • Gained backing and support from Ron Suber. Mr. Suber not only invested in Money360, but also joined the firm as a strategic advisor.

M360 Advisors surpasses $300M in Assets Under Management

Finally, Money360 announced that its affiliate, M360 Advisors (“M360”), surpassed $300 million in assets under management.

3 Turnaround Stocks to Consider in 2018 (The Motley Fool), Rated: AAA

One name that has been sold off very recently is Lending Club (NYSE:LC), the leader in the relatively new industry of FinTech personal lending.

Lending Club’s fee-based model depends on increasing volumes, so growth-oriented investors were likely scared off by the reduced targets.

However, I think the hate has gone too far. Lending Club is the largest and only publicly traded loan marketplace, which has made it the go-to for institutional investors looking for exposure to consumer loans. By tightening credit, Lending Club has demonstrated a long-term commitment to sound underwriting, which should deepen its relationships with these important investors.

And while Lending Club did reduce its near-term guidance, it still guided for roughly 20% revenue growth and increasing profitability next year, which isn’t too shabby. The market opportunity in U.S. credit card consolidation — Lending Club’s core business (though not its the only one) — is still large, at $300-$350 billion, which means Lending Club’s current $11.5 billion loans outstanding only amounts to about 3-4% of this market.

TOP HEDGE FUND INDUSTRY TRENDS FOR 2018 (All About Alpha), Rated: AAA

Despite the plethora of negative articles about the hedge fund industry, hedge fund assets have reached an all-time high 5 quarters in a row. Across the hedge fund investor landscape, we see a significant improvement in sentiment towards the industry. We forecast that industry assets will grow by 5.5% over the next 12 months.

Strategies that will gain assets include:

  • Quant
  • Asia long/short equity  – The IMF predicts that 2/3 of world growth will come from Asia over the next 5 years. Less than 5% of Hedge Fund industry assets are invested with Asia based managers.
  • Reinsurance
  • Higher turnover fixed income
  • Strategies that blur the lines between private equity and hedge funds – Most of these are private lending/specialty financing.

Strategies that will lose assets include:

  • Traditional long/short equity focusing on the developed markets.
  • High beta fixed income managers.

Arms race for Alpha

The industry is experiencing an information arms race with respect to how much information can be gathered and how quickly it can be processed.  Information advantages are often short-lived, and many managers are investing in a host of new technologies such as quantitative analytics, alternative data sources and Artificial Intelligence in an attempt to enhance their decision making and improve traditional investment processes. Information and technology are being used to increase efficiency and accuracy in sourcing information, researching ideas and executing investments.

Increase in hedge funds shutting down

The hedge fund industry remains over saturated with an estimated 15,000 funds. We believe approximately 90% of all hedge funds do not justify their fees, as evidenced by the mediocre returns of hedge fund indices. Fed-up with poor performance, investors are increasingly more likely to redeem from underperforming managers leading to an increase in fund closures.

Bullish on Cryptocurrency industry despite potentially one of the largest bubbles in capital markets history

Cryptocurrency is in its infancy stage and will continue to experience tremendous innovation, evolution and exponential growth over the next decade. There are already more than 120 hedge funds focused on cryptocurrencies and block chain technology. We expect this number to increase 2 to 3 times in 2018.

Prosper Marketplace Appoints Former Bank of America Executive Justine Metz Head of Marketing (BusinessWire), Rated: AAA

Prosper Marketplace today announced it has appointed Justine Metz as Executive Vice President of Marketing.

Metz brings more than 25 years of marketing experience and joins Prosper from SRS Acquiom, a financial firm that specializes with M&A transactions. Prior to that, Justine served as Head of Global Wealth and Investment Management Marketing and Sales Support at Bank of America, where she was responsible for driving growth, profitability and loyalty for Bank of America’s Wealth Management business, Merrill Lynch and US Trust. She has also held senior positions at Fidelity Investments, Morgan Stanley and GE Capital (GEFA).

MoneyLion Secures $ 42 Million Investment to Accelerate Growth (BusinessWire), Rated: A

MoneyLion, the digital personal finance platform for the financial middle class, announced today it has secured a $42 million Series B funding, led by Edison Partners. Existing investors FinTech Collective and Grupo SURA, as well as new investors Greenspring Associates and Danhua Capital also participated in the round. All told, MoneyLion has now raised $67 million in equity financing.

The latest investment follows rapid growth of the MoneyLion platform, which has surpassed 1.5 million users and has experienced 178% compounded growth in revenue since 2015. The company, which is cash flow positive, plans on using the growth capital to increase investment in technology and continue to expand its product line.

How Tech Sends Clients Running Back to Human FAs (Financial Advisor IQ), Rated: A

While investors have been using digital tools as an entry into financial planning, they’re simply inundated by too much data and eventually turn to human advisors for help, Cerulli Associates says, according to the publication.

Nonetheless, investors’ appetite for digital advice isn’t subsiding: digital platforms were expected to reach $220 billion in client assets by the end 2017 and more than $600 billion by the end of 2022, according to the report cited by FA magazine.

 

Celsius to replace traditional future exchanges like CME and CBOT with crypto lenders (LeapRate), Rated: A

Celsius, a blockchain powered lending and borrowing platform, just announced that it aims to replace big banks and futures exchanges, like the CME and CBOT, with crypto coin holders who will earn returns through lending. Using its platform, which will launch in Q1 2018, Celsius members can easily borrow coins at significantly reduced rates compared to traditional financial institutions, while lenders can earn automatic interest by holding coins in the Celsius Wallet.

Dubbed as “The Wallet That Pays Back”, registrants who deposit coins into the Celsius Wallet will receive up to 7% per year on loaned coins.

Celsius plans to offer a variety of powerful financial tools for crypto asset holders, including:

  • Peer-to-Peer Lending 
  • Peer-to-Peer Borrowing 
  • Crypto Shorting: Network members will be able to short crypto assets by borrowing coins from lenders almost instantaneously.
  • Global Credit 
  • Capital Protection: Celsius will provide protection for all coins, by collecting a portion of the principal interest amount from borrowers.

Crypto P2P lender Celsius readies for launch (P2P Finance News), Rated: B

CELSIUS, an Ethereum-based peer-to-peer lending platform, is set to launch during this quarter.

Lenders will receive up to seven per cent year by depositing coins into the Celsius Wallet that are lent out to the platform’s network of members, according to LeapRate.com.

2018’s Best Credit Cards & $ 7.4B in Extra Interest Following Fed Hikes (WalletHub Email), Rated: A

With millions of people making a financially themed resolution for 2018 and recent Fed rate hikes expected to cost credit card users an extra  Best For… Card Name Travel Rewards

The Mastermind Behind Chase’s Industry-Changing Sapphire Reserve Card Sets Her Sights on Banking (Bloomberg), Rated: A

Pam Codispoti had a dilemma. She’d been brought on by JPMorgan Chase & Co.to develop a credit card for affluent millennials in 2014—a time when no one thought the group wanted credit cards.

Chase’s response was the Sapphire Reserve. The $450-a-year card came with a sign-up bonus of 100,000 reward points and allowed holders to use them at a wide variety of hotels, airlines, restaurants, and more. Holders were also rewarded extra for spending in those categories, and even given a $300 annual travel credit.

CFPB 2018 outlook: More deregulation, more upheaval (American Banker), Rated: A

The first 11 months alone under former CFPB Director Richard Cordray saw a steady stream of enforcement actions and regulatory policies that by itself would make the bureau’s year more eventful than that of other agencies. That span also saw the Trump administration’s challenges to Cordray’s leadership, and the congressional repeal of the CFPB arbitration rule.

Indiana lawmaker files bill to cap payday loan interest rates at 36 percent (rtv6), Rated: A

State Sen. Greg Walker (R-Columbus) filed on Tuesday the first of its kind legislation that would cap small loan finance charges at 36 percent.

Currently, the cap for payday loans in Indiana is 391 percent, according to Walker.

Indiana ranks 44th, among the worst in the nation, when it comes to bankruptcy and Hoosiers and their communities lose about $70 million a year in payday loan fees, according to the Indiana Institute for Working Families.

If in case you have debt, keep away from this massive mistake many debtors make (Kaplan Herald), Rated: B

In June, cumulative U.S. household debt reached $12.84 trillion, a $114 billion increase from the first quarter.

Four 4 in 5 Americans are in the red, according to data from a provided exclusively to CNBC.

United Kingdom

Victory Park Capital fund exits Prosper loans (AltFi), Rated: AAA

The £336.8m VPC Specialty Lending fund has sold its total holding in Prosper marketplace loans, representing 4.1 per cent of the Company’s net asset value [NAV].

Valuing Funding Circle (Financial Times), Rated: AAA

Back in 2014, Lending Club and OnDeck were riding high. The American startups led a pack of online lending companies “disrupting” consumer and business loans respectively.

The hype reached fever-pitched as they floated within weeks of each other. Lending Club was valued at $5.4bn. OnDeck at $1.3bn.

So, hats off to Funding Circle, the British online lender that is preparing to follow in the footsteps of its struggling peers across the Atlantic.

Making the most of your money (P2P Finance News), Rated: AAA

AS INFLATION grows ahead of expectations, far too many savers are seeing the value of their hard-earned cash decline.

Recent research from the Financial Conduct Authority (FCA) found that just under a third (30 per cent) of UK adults would not be able to cope if their mortgage repayments increased by £50 a month.

With the recent 0.25 per cent rate rise, it won’t be long before these households feel the squeeze.

The rise of P2P

UK savers and investors are also willing to back British businesses. Six in 10 (63 per cent) would be willing to lend to a business. Over a quarter (26 per cent) would lend to a business that could use their assets as security. A quarter (25 per cent) would lend to an established business that has been operating for a few years and 11 per cent would lend to a start-up business.

Click here for more information on ArchOver.

Folk2Folk Announces New CEO as Giles Cross Takes Over Leadership Role P2P Lending Platform (Crowdfund Insider), Rated: A

Folk2Folk, a unique peer to peer lending platform that combines physical locations with an online platform matching investors with small business loans, has announced the appointment of Giles Cross  Chief Executive Officer (CEO).

Cross joined Folk2Folk as Chief Marketing Officer in June 2017.

 

Property Lender Financed Around 1,800 UK Homes in 2017 (Landlord News), Rated: A

LendInvest, a leading specialist property lender, lent £500m to help professional property investors, developers and landlords buy, build or renovate around 1,800 UK homes during 2017.

This marks a 33% increase on the previous year’s £375m lending record.

LendInvest has now lent a total of over £1.2 billion to property investors and developers.

High touch meets high tech (P2P Finance News), Rated: A

FAIRNESS IS pivotal to Newable Lending’s ethos when it comes to lending – and it’s not afraid to nail its colours to the mast. The peer-to-peer business lender is a member of Responsible Finance, a trade body working to increase access to fair finance.

FCA financial advice director steps down (Mortgage Strategy), Rated: B

FCA director of life insurance and financial advice Linda Woodall has stepped down from the regulator.

The regulator understands she intends to retire. A replacement has yet to be appointed.

European Union

New EU financial market rules off to smooth start: Watchdog (Khaleej Times), Rated: AAA

The rollout of new European Union securities rules on Wednesday has been glitch-free so far, though disruptions in coming days and months cannot be ruled out, the bloc’s markets watchdog said.

But given the complexity and size of the reform, Esma could not rule out glitches in coming days or weeks, Maijoor said.

Rocky start for Europe’s financial market revamp (Handelsblatt Global), Rated: A

Even after a year-long delay, precious few experts fully understand the Markets in Financial Instruments Directive II, Europe’s biggest financial markets reform in almost a decade.

Among other key changes, and in a belated nod to technological progress, telephone-based trading will be replaced with electronic platforms in bonds and off-exchange derivatives. And consumers should immediately see financial advice standards rise.

Analysts estimate that MiFid II will cost $6 billion (€5 billion) to implement in the first five years.

Exclusive Interview with Fast Invest CEO Simona Vaitkune (ChipIn), Rated: A

We recently sat down with the CEO of Fast Invest, Simona Vaitkune to have a chat with her about the project as well as finding out her thoughts and insights.

Tell us about how you came up with the idea of Fast Invest. Did you face a problem within the industry or do you think there is a gap in the market for Fast Invest to fill?

Everything started when I wanted not only to save money but to earn from my savings, to get passive income. I began to search for a platform which would fit me, but I could not find anything because I wanted to do it easily and safely without investing a lot of money.

What do you think is the biggest problem Fast Invest will solve and why is the problem important to solve?

Fast Invest is solving a problem that I mentioned before – complexity and large entry point of investment platforms. With Fast Invest, you can start investing from 1 Euro, Zloty or Pound. On top of that, you do not need to worry about your money, because we offer BuyBack and default guarantees.

International

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

Mintos finished a remarkable month fueled by the cashback promotion. The total volume for the reported marketplaces adds up to 582 million Euro.

This month I added PeerBerryLook&Fin and MyTripleA.

Source: P2P-Banking

Setting the Tone for 2018 in the Most Important Charts of 2017 (Let’s Talk Payments), Rated: AAA

In 2017, lending startups around the world scored almost $4 billion in total funding, followed by $3.55 billion gathered by InsurTech startups, $3.24 billion invested in payments, and, of course, $850 million pocketed by startups building blockchain-based solutions.

Keep shoppers, the planet, and your profits happy by allowing in-store returns (Biz Report), Rated: A

Reverse-logistics firm Optoro found that nearly half (45%) of people will begin sending back unwanted items no sooner than the ripped up wrapping paper has been balled and binned. UPS recently forecast that returns would peak at 1.4 million packages on Wednesday 3 January, 2018, up 8% on last year and the fourth consecutive yearly increase. UPS said consumers returned more than 1 million packages a day to retailers last month.

According to Optoro’s report, the majority of returns (91%) will take place in-store. While total returns account for more than $351 billion in lost sales for U.S. retailers (Appriss Retail) the fact that most of those returns are happening in store is good news. More than half (57%) of shoppers who return items to a physical store make additional purchases during the process.

Could blockchains replace banks in real estate lending? (American Banker), Rated: A

The startup Propy recently sold an apartment in the Ukraine through its blockchain, and in the last week of December it began letting Californians buy and sell properties on its blockchain using bitcoin. They will be able to use U.S. dollars next year.

ShelterZoom has built an Ethereum-based platform that went live Dec. 14. RealBlocks lets people invest in housing on its blockchain with fiat or digital currency (and starting in February 2018, its own tokens). It has completed seven deals so far.

RealBlocks lets people invest in rental properties like Section 8 housing over a blockchain.

It has also partnered with SALT Lending so that after February, participants will be able to take out a loan or line of credit using the tokens they buy from RealBlocks as collateral.

A blockchain could also facilitate crowdsourced mortgages. Instead of taking out a $200,000 loan from one lender, a borrower could get $2,000 each from 1,000 investors.

18 Blockchain Predictions for 2018 (Consensy), Rated: A

Bitcoin as a digital store of value is the least interesting use of blockchain … There, I said it.

A Loan

Source: Consensys

An Initial Public Offering or Crowdfunding

Source: Consensys

10. People will take control of their online identities

We will continue to see the growing trend wherein people, companies, and machines manage their identity self-sovereignly rather then by a third party service provider like a bank, Facebook, or another internet service provider.

Interestingly, governments will increasingly find themselves as attestors to these self-sovereign identities, similar to how Zug, Switzerland is attesting to citizens identity usage with uPort, Ethereum leading self-sovereign identity solution.

11. In 2018, governments and regulatory bodies will mandate the use of blockchain to track and trace high value assets.

Major Fortune 50 companies are already demanding public chain track and trace use cases for which they are using the Viant platform to build their solutions.

18. The total market cap of blockchain-based digital assets will exceed $2 trillion U.S. dollars by January 1, 2019.

The price of ether will exceed $2,000 in 2018. Ether will continue to outperform bitcoin, and the total market cap of ether will exceed that of bitcoin in 2018.

8 fintech trends on our radar for 2018 (O’Reilly Media), Rated: B

  1. AI will be implemented across the stack
  2. New products will make advanced analytics easier
  3. Blockchain technologies will be used in financial services products
  4. Data partnerships will increase
  5. We’ll see even greater regionalization and regulation in payments – This is an area where both startups and global companies are flourishing. The technologies, protocols, and players vary by region. I’m amazed by how widely used QR codes are in China (WeChat and Alipay) and the rest of the world (GoPay in Southeast Asia, Paytm in India). For companies operating in the EU, PSD2 is a new 2018 regulation aimed at fostering innovation and competition in the payments industry.
  6. Customer experience will be increasingly mobile
  7. There will be increased pressure around privacy and security
  8. More quants will be analyzing or trading cryptocurrencies
Australia

Can a fintech lending firm disrupt the big four? (Asiamoney), Rated: AAA

As CVs for Australian bankers go, Jason Yetton’s background doesn’t quite scream ‘disruptor’. High-flyer perhaps, certainly ambitious and across trends. But helming a startup?

Two years on from Westpac and now running SocietyOne, the Sydney-based loans fintech that is one of Australia’s more prominent financial startups, the mid-career Yetton seems to bite with near evangelistic fervour the very hand of establishment banking that once nourished him.

Australian banking is backward in many critical areas, Yetton tells Asiamoney. He wants to see a tech-led democratization that would revolutionize payments and settlement, as well as lending, data and information infrastructure, while allowing customers to switch banks without penalty.

The current system preserves the status quo, Yetton says, in which the formidable foursome control 80% to 85% of Australia’s banking market and from which they earned a collective A$32 billion ($24 billion) in the 2017 financial year.

India

Funds Raised By Indian Startups Hit Three-Month Low (Bloomberg), Rated: AAA

Funds raised by Indian startups hit a three-month low, as four startups together managed to raise just around $10 million last week. That compares with $36 million raised by 10 startups the week before in angel, seed or venture capital funding.

Online lending firm Lendingkart Finance Ltd. raised around $3.7 million (Rs 25 crore) from the country’s largest public sector bank State Bank of India to grow its loan books, the company said in a statement.

Indian start-up ecosystem on a growth path in 2018 (Outlook), Rated: A

India’s start-up eco-system has been growing at a rapid pace and has all the right ingredients to support the fast paced economic growth of the country. With an addition of 1000 start-ups in the year 2017, the start-ups have played a big role in the growth of the Indian economy, making it a major source of employment, innovation and industrialisation.

i2ifunding, India’s second largest P2P lending platform plans to expand its business across the country, instead of focussing on metro cities.

Asia

LaLa World Global to Launch $ 10M Public Token Sale Jan. 5 (BusinessWire), Rated: AAA

Blockchain startup LaLa World is pleased to announce the long anticipated launch of the Lala Token sale to commence on January 5, 2018 and to run through February 5, 2018. A total of 150 Million LALA Tokens will be released in an initial coin sale (ICO) starting this Friday.

LALA World Products from their Financial Ecosystem Include:

  1. LALA Transfer – A Peer-to-Peer local and global remittance backed by crypto as well as fiat.
  2. LALA Bill Pay – Local and International bill payments for you and your family.
  3. LALA Lends – Domestic and International peer-to-peer lending via crypto and fiat, individual and small businesses.
  4. LALA Card – Crypto and Fiat card synced to your Wallet and usable at millions of PoS globally.
  5. LALA Kit – Contains a mobile phone with pre-loaded LALA Wallet, LALA Insurance, LALA Card, partners’ products, etc.

LaLa World is a wholesome financial ecosystem for the unbanked, starting with migrants and their families back home. Investors can purchase LaLa Tokens here: 

8 promising Fintech Startups in Singapore to Watch in 2018 (Fintech News), Rated: A

  1. MyCash Online is an online marketplace designed for migrant workers in Malaysia and Singapore.
  2. Instarem is a remittance startup that aims to offer fast, safe and cost effective cross border money transfer services for individuals and businesses from countries including Hong Kong, Australia and Singapore to more than 25 countries.
  3. Singapore Life is a new life insurance firm which commenced its operations in 2017 by providing insurance solutions via its online platform.
  4. soCash has developed a solution that allows people to withdraw cash at small businesses part of its “Cashpoints” network. The solution plugs into the mobile apps of banks.
  5. Bluzelle Networks is a blockchain startup that’s building a decentralized, on-demand, scalable database for decentralized applications.
  6. TenX is a cryptocurrency payment platform that consists of a wallet, physical debit card, bank account, ATM access and more.
  7. AGDelta is a Singapore headquartered fintech software company specialized in digital wealth management.
  8. Flywire, formerly peerTransfer, is a provider of international payment solutions headquartered in Boston with operations in Singapore, China, Australia, Spain and the UK.
Canada

New payday loan rules still too soft, says group (CBC.ca), Rated: A

On Monday, New Brunswick became the eighth Canadian province to introduce regulations governing the payday loan industry.

Earlier this week, the Financial and Consumer Services Commission announced a new set of regulations, including mandatory licensing for payday lenders, requiring then to display posters showing their rates, and making insurance on loans optional.

Lenders are also prohibited from issuing more than one loan at a time to the same consumer, or lending more than 30 per cent of the consumer’s net pay.

Under the new rules, the commission is able to take action against unlicensed lenders and those that fail to comply with legislation.

Africa

Kenya most lucrative market for fintech top staff in Africa (Business Daily), Rated: AAA

Kenya is the most attractive market in Africa for workers in the fintech industry with new data showing that companies pay the highest salaries in comparison to their peers on the continent.

In a recent survey, the Digital Frontiers Institute (DFI) found that executives and senior managers working for Kenyan fintech companies earn each a base monthly salary of Sh2 million (Sh24.6 million or $238,509 annually) and Sh1.2 million (Sh14.2 million or $137,303 annually), respectively.

Authors:

George Popescu
Allen Taylor

Thursday January 4 2018 Daily News Digest

most funded fintech segments

News Comments Today’s main news: U.S. blocks Ant Financial from buying MoneyGram. Victory Park exits Prosper. Money360 closes $500M in CRE loans. Prosper appoints new marketing chief. Indian startup funding at 3-month low. LaLa World Global to launch token sale. Today’s main analysis: International P2P lending volumes for December 2017. Today’s thought-provoking articles: LendingClub to turn around in 2018. Top hedge […]

most funded fintech segments

News Comments

United States

United Kingdom

European Union

International

Australia

India

Asia

Canada

Africa

News Summary

United States

The U.S. Is Blocking a Chinese Fintech Giant from Buying MoneyGram (Technology Review), Rated: AAA

American authorities have decided that Alibaba’s digital payment firm, Ant Financial, won’t be allowed to acquire the cash transfer company Moneygram.

Money360 Passes $ 500 Million in Commercial Real Estate Loans Closed (GlobeNewswire), Rated: AAA

Money360, a technology-enabled direct lender specializing in commercial real estate (CRE) loans, today announced it has surpassed half a billion dollars in loans closed since inception. This includes $357 million in loans closed for the year 2017.  The milestone comes on the heels of other recent successes for Money360, including the initiation of a partnership with Ten-X, the nation’s leading online real estate transaction marketplace, in which Money360 works to accelerate commercial real estate transactions for buyers, sellers and brokers by offering pre-approved financing for qualified properties and buyers.

Money360 specializes in bridge and permanent loans of $1 million to $20 million. Recent loans closed during the period include:

  • A $7.8 million bridge loan for an office property in Evansville, Indiana, brought to Money360 by Benjamin Kadish at Maverick Capital
  • A $7.5 million bridge loan for a full-service hotel in Cromwell, Connecticut, brought to Money360 by Rushi Shah at Conlon Capital
  • A $6.8 million bridge loan for a nationwide portfolio of Pier 1 retail properties, brought to Money360 by Al Dannatt at Commercial Resource Capital
  • A $6.8 million bridge loan for a mixed-use center in Charleston, South Carolina, brought to Money360 by Dominick Scorzo at Ivenhoe Capital Advisors
  • A $4.4 million permanent loan for a retail center in Mount Olive, New Jersey, brought to Money360 through our partnership with Ten-X
  • A $4 million bridge loan for an office building in Amarillo, Texas, brought to Money360 by Steve States at States Mortgage
  • A $3.2 million bridge loan for a retail center in Santa Fe, New Mexico, brought to Money360 by Martin Chera at Express Mortgage

In addition to record loan generation activity and new partnerships, Money360 has taken a number of notable steps in 2017 to further position the company as a leader in commercial real estate and alternative investing, including:

  • Hired new top talent to support company growth.
  • Named a top five company in the real estate fintech industry by Deloitte based on total investment dollars received.
  • Gained backing and support from Ron Suber. Mr. Suber not only invested in Money360, but also joined the firm as a strategic advisor.

M360 Advisors surpasses $300M in Assets Under Management

Finally, Money360 announced that its affiliate, M360 Advisors (“M360”), surpassed $300 million in assets under management.

3 Turnaround Stocks to Consider in 2018 (The Motley Fool), Rated: AAA

One name that has been sold off very recently is Lending Club (NYSE:LC), the leader in the relatively new industry of FinTech personal lending.

Lending Club’s fee-based model depends on increasing volumes, so growth-oriented investors were likely scared off by the reduced targets.

However, I think the hate has gone too far. Lending Club is the largest and only publicly traded loan marketplace, which has made it the go-to for institutional investors looking for exposure to consumer loans. By tightening credit, Lending Club has demonstrated a long-term commitment to sound underwriting, which should deepen its relationships with these important investors.

And while Lending Club did reduce its near-term guidance, it still guided for roughly 20% revenue growth and increasing profitability next year, which isn’t too shabby. The market opportunity in U.S. credit card consolidation — Lending Club’s core business (though not its the only one) — is still large, at $300-$350 billion, which means Lending Club’s current $11.5 billion loans outstanding only amounts to about 3-4% of this market.

TOP HEDGE FUND INDUSTRY TRENDS FOR 2018 (All About Alpha), Rated: AAA

Despite the plethora of negative articles about the hedge fund industry, hedge fund assets have reached an all-time high 5 quarters in a row. Across the hedge fund investor landscape, we see a significant improvement in sentiment towards the industry. We forecast that industry assets will grow by 5.5% over the next 12 months.

Strategies that will gain assets include:

  • Quant
  • Asia long/short equity  – The IMF predicts that 2/3 of world growth will come from Asia over the next 5 years. Less than 5% of Hedge Fund industry assets are invested with Asia based managers.
  • Reinsurance
  • Higher turnover fixed income
  • Strategies that blur the lines between private equity and hedge funds – Most of these are private lending/specialty financing.

Strategies that will lose assets include:

  • Traditional long/short equity focusing on the developed markets.
  • High beta fixed income managers.

Arms race for Alpha

The industry is experiencing an information arms race with respect to how much information can be gathered and how quickly it can be processed.  Information advantages are often short-lived, and many managers are investing in a host of new technologies such as quantitative analytics, alternative data sources and Artificial Intelligence in an attempt to enhance their decision making and improve traditional investment processes. Information and technology are being used to increase efficiency and accuracy in sourcing information, researching ideas and executing investments.

Increase in hedge funds shutting down

The hedge fund industry remains over saturated with an estimated 15,000 funds. We believe approximately 90% of all hedge funds do not justify their fees, as evidenced by the mediocre returns of hedge fund indices. Fed-up with poor performance, investors are increasingly more likely to redeem from underperforming managers leading to an increase in fund closures.

Bullish on Cryptocurrency industry despite potentially one of the largest bubbles in capital markets history

Cryptocurrency is in its infancy stage and will continue to experience tremendous innovation, evolution and exponential growth over the next decade. There are already more than 120 hedge funds focused on cryptocurrencies and block chain technology. We expect this number to increase 2 to 3 times in 2018.

Prosper Marketplace Appoints Former Bank of America Executive Justine Metz Head of Marketing (BusinessWire), Rated: AAA

Prosper Marketplace today announced it has appointed Justine Metz as Executive Vice President of Marketing.

Metz brings more than 25 years of marketing experience and joins Prosper from SRS Acquiom, a financial firm that specializes with M&A transactions. Prior to that, Justine served as Head of Global Wealth and Investment Management Marketing and Sales Support at Bank of America, where she was responsible for driving growth, profitability and loyalty for Bank of America’s Wealth Management business, Merrill Lynch and US Trust. She has also held senior positions at Fidelity Investments, Morgan Stanley and GE Capital (GEFA).

MoneyLion Secures $ 42 Million Investment to Accelerate Growth (BusinessWire), Rated: A

MoneyLion, the digital personal finance platform for the financial middle class, announced today it has secured a $42 million Series B funding, led by Edison Partners. Existing investors FinTech Collective and Grupo SURA, as well as new investors Greenspring Associates and Danhua Capital also participated in the round. All told, MoneyLion has now raised $67 million in equity financing.

The latest investment follows rapid growth of the MoneyLion platform, which has surpassed 1.5 million users and has experienced 178% compounded growth in revenue since 2015. The company, which is cash flow positive, plans on using the growth capital to increase investment in technology and continue to expand its product line.

How Tech Sends Clients Running Back to Human FAs (Financial Advisor IQ), Rated: A

While investors have been using digital tools as an entry into financial planning, they’re simply inundated by too much data and eventually turn to human advisors for help, Cerulli Associates says, according to the publication.

Nonetheless, investors’ appetite for digital advice isn’t subsiding: digital platforms were expected to reach $220 billion in client assets by the end 2017 and more than $600 billion by the end of 2022, according to the report cited by FA magazine.

 

Celsius to replace traditional future exchanges like CME and CBOT with crypto lenders (LeapRate), Rated: A

Celsius, a blockchain powered lending and borrowing platform, just announced that it aims to replace big banks and futures exchanges, like the CME and CBOT, with crypto coin holders who will earn returns through lending. Using its platform, which will launch in Q1 2018, Celsius members can easily borrow coins at significantly reduced rates compared to traditional financial institutions, while lenders can earn automatic interest by holding coins in the Celsius Wallet.

Dubbed as “The Wallet That Pays Back”, registrants who deposit coins into the Celsius Wallet will receive up to 7% per year on loaned coins.

Celsius plans to offer a variety of powerful financial tools for crypto asset holders, including:

  • Peer-to-Peer Lending 
  • Peer-to-Peer Borrowing 
  • Crypto Shorting: Network members will be able to short crypto assets by borrowing coins from lenders almost instantaneously.
  • Global Credit 
  • Capital Protection: Celsius will provide protection for all coins, by collecting a portion of the principal interest amount from borrowers.

Crypto P2P lender Celsius readies for launch (P2P Finance News), Rated: B

CELSIUS, an Ethereum-based peer-to-peer lending platform, is set to launch during this quarter.

Lenders will receive up to seven per cent year by depositing coins into the Celsius Wallet that are lent out to the platform’s network of members, according to LeapRate.com.

2018’s Best Credit Cards & $ 7.4B in Extra Interest Following Fed Hikes (WalletHub Email), Rated: A

With millions of people making a financially themed resolution for 2018 and recent Fed rate hikes expected to cost credit card users an extra  Best For… Card Name Travel Rewards

The Mastermind Behind Chase’s Industry-Changing Sapphire Reserve Card Sets Her Sights on Banking (Bloomberg), Rated: A

Pam Codispoti had a dilemma. She’d been brought on by JPMorgan Chase & Co.to develop a credit card for affluent millennials in 2014—a time when no one thought the group wanted credit cards.

Chase’s response was the Sapphire Reserve. The $450-a-year card came with a sign-up bonus of 100,000 reward points and allowed holders to use them at a wide variety of hotels, airlines, restaurants, and more. Holders were also rewarded extra for spending in those categories, and even given a $300 annual travel credit.

CFPB 2018 outlook: More deregulation, more upheaval (American Banker), Rated: A

The first 11 months alone under former CFPB Director Richard Cordray saw a steady stream of enforcement actions and regulatory policies that by itself would make the bureau’s year more eventful than that of other agencies. That span also saw the Trump administration’s challenges to Cordray’s leadership, and the congressional repeal of the CFPB arbitration rule.

Indiana lawmaker files bill to cap payday loan interest rates at 36 percent (rtv6), Rated: A

State Sen. Greg Walker (R-Columbus) filed on Tuesday the first of its kind legislation that would cap small loan finance charges at 36 percent.

Currently, the cap for payday loans in Indiana is 391 percent, according to Walker.

Indiana ranks 44th, among the worst in the nation, when it comes to bankruptcy and Hoosiers and their communities lose about $70 million a year in payday loan fees, according to the Indiana Institute for Working Families.

If in case you have debt, keep away from this massive mistake many debtors make (Kaplan Herald), Rated: B

In June, cumulative U.S. household debt reached $12.84 trillion, a $114 billion increase from the first quarter.

Four 4 in 5 Americans are in the red, according to data from a provided exclusively to CNBC.

United Kingdom

Victory Park Capital fund exits Prosper loans (AltFi), Rated: AAA

The £336.8m VPC Specialty Lending fund has sold its total holding in Prosper marketplace loans, representing 4.1 per cent of the Company’s net asset value [NAV].

Valuing Funding Circle (Financial Times), Rated: AAA

Back in 2014, Lending Club and OnDeck were riding high. The American startups led a pack of online lending companies “disrupting” consumer and business loans respectively.

The hype reached fever-pitched as they floated within weeks of each other. Lending Club was valued at $5.4bn. OnDeck at $1.3bn.

So, hats off to Funding Circle, the British online lender that is preparing to follow in the footsteps of its struggling peers across the Atlantic.

Making the most of your money (P2P Finance News), Rated: AAA

AS INFLATION grows ahead of expectations, far too many savers are seeing the value of their hard-earned cash decline.

Recent research from the Financial Conduct Authority (FCA) found that just under a third (30 per cent) of UK adults would not be able to cope if their mortgage repayments increased by £50 a month.

With the recent 0.25 per cent rate rise, it won’t be long before these households feel the squeeze.

The rise of P2P

UK savers and investors are also willing to back British businesses. Six in 10 (63 per cent) would be willing to lend to a business. Over a quarter (26 per cent) would lend to a business that could use their assets as security. A quarter (25 per cent) would lend to an established business that has been operating for a few years and 11 per cent would lend to a start-up business.

Click here for more information on ArchOver.

Folk2Folk Announces New CEO as Giles Cross Takes Over Leadership Role P2P Lending Platform (Crowdfund Insider), Rated: A

Folk2Folk, a unique peer to peer lending platform that combines physical locations with an online platform matching investors with small business loans, has announced the appointment of Giles Cross  Chief Executive Officer (CEO).

Cross joined Folk2Folk as Chief Marketing Officer in June 2017.

 

Property Lender Financed Around 1,800 UK Homes in 2017 (Landlord News), Rated: A

LendInvest, a leading specialist property lender, lent £500m to help professional property investors, developers and landlords buy, build or renovate around 1,800 UK homes during 2017.

This marks a 33% increase on the previous year’s £375m lending record.

LendInvest has now lent a total of over £1.2 billion to property investors and developers.

High touch meets high tech (P2P Finance News), Rated: A

FAIRNESS IS pivotal to Newable Lending’s ethos when it comes to lending – and it’s not afraid to nail its colours to the mast. The peer-to-peer business lender is a member of Responsible Finance, a trade body working to increase access to fair finance.

FCA financial advice director steps down (Mortgage Strategy), Rated: B

FCA director of life insurance and financial advice Linda Woodall has stepped down from the regulator.

The regulator understands she intends to retire. A replacement has yet to be appointed.

European Union

New EU financial market rules off to smooth start: Watchdog (Khaleej Times), Rated: AAA

The rollout of new European Union securities rules on Wednesday has been glitch-free so far, though disruptions in coming days and months cannot be ruled out, the bloc’s markets watchdog said.

But given the complexity and size of the reform, Esma could not rule out glitches in coming days or weeks, Maijoor said.

Rocky start for Europe’s financial market revamp (Handelsblatt Global), Rated: A

Even after a year-long delay, precious few experts fully understand the Markets in Financial Instruments Directive II, Europe’s biggest financial markets reform in almost a decade.

Among other key changes, and in a belated nod to technological progress, telephone-based trading will be replaced with electronic platforms in bonds and off-exchange derivatives. And consumers should immediately see financial advice standards rise.

Analysts estimate that MiFid II will cost $6 billion (€5 billion) to implement in the first five years.

Exclusive Interview with Fast Invest CEO Simona Vaitkune (ChipIn), Rated: A

We recently sat down with the CEO of Fast Invest, Simona Vaitkune to have a chat with her about the project as well as finding out her thoughts and insights.

Tell us about how you came up with the idea of Fast Invest. Did you face a problem within the industry or do you think there is a gap in the market for Fast Invest to fill?

Everything started when I wanted not only to save money but to earn from my savings, to get passive income. I began to search for a platform which would fit me, but I could not find anything because I wanted to do it easily and safely without investing a lot of money.

What do you think is the biggest problem Fast Invest will solve and why is the problem important to solve?

Fast Invest is solving a problem that I mentioned before – complexity and large entry point of investment platforms. With Fast Invest, you can start investing from 1 Euro, Zloty or Pound. On top of that, you do not need to worry about your money, because we offer BuyBack and default guarantees.

International

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

Mintos finished a remarkable month fueled by the cashback promotion. The total volume for the reported marketplaces adds up to 582 million Euro.

This month I added PeerBerryLook&Fin and MyTripleA.

Source: P2P-Banking

Setting the Tone for 2018 in the Most Important Charts of 2017 (Let’s Talk Payments), Rated: AAA

In 2017, lending startups around the world scored almost $4 billion in total funding, followed by $3.55 billion gathered by InsurTech startups, $3.24 billion invested in payments, and, of course, $850 million pocketed by startups building blockchain-based solutions.

Keep shoppers, the planet, and your profits happy by allowing in-store returns (Biz Report), Rated: A

Reverse-logistics firm Optoro found that nearly half (45%) of people will begin sending back unwanted items no sooner than the ripped up wrapping paper has been balled and binned. UPS recently forecast that returns would peak at 1.4 million packages on Wednesday 3 January, 2018, up 8% on last year and the fourth consecutive yearly increase. UPS said consumers returned more than 1 million packages a day to retailers last month.

According to Optoro’s report, the majority of returns (91%) will take place in-store. While total returns account for more than $351 billion in lost sales for U.S. retailers (Appriss Retail) the fact that most of those returns are happening in store is good news. More than half (57%) of shoppers who return items to a physical store make additional purchases during the process.

Could blockchains replace banks in real estate lending? (American Banker), Rated: A

The startup Propy recently sold an apartment in the Ukraine through its blockchain, and in the last week of December it began letting Californians buy and sell properties on its blockchain using bitcoin. They will be able to use U.S. dollars next year.

ShelterZoom has built an Ethereum-based platform that went live Dec. 14. RealBlocks lets people invest in housing on its blockchain with fiat or digital currency (and starting in February 2018, its own tokens). It has completed seven deals so far.

RealBlocks lets people invest in rental properties like Section 8 housing over a blockchain.

It has also partnered with SALT Lending so that after February, participants will be able to take out a loan or line of credit using the tokens they buy from RealBlocks as collateral.

A blockchain could also facilitate crowdsourced mortgages. Instead of taking out a $200,000 loan from one lender, a borrower could get $2,000 each from 1,000 investors.

18 Blockchain Predictions for 2018 (Consensy), Rated: A

Bitcoin as a digital store of value is the least interesting use of blockchain … There, I said it.

A Loan

Source: Consensys

An Initial Public Offering or Crowdfunding

Source: Consensys

10. People will take control of their online identities

We will continue to see the growing trend wherein people, companies, and machines manage their identity self-sovereignly rather then by a third party service provider like a bank, Facebook, or another internet service provider.

Interestingly, governments will increasingly find themselves as attestors to these self-sovereign identities, similar to how Zug, Switzerland is attesting to citizens identity usage with uPort, Ethereum leading self-sovereign identity solution.

11. In 2018, governments and regulatory bodies will mandate the use of blockchain to track and trace high value assets.

Major Fortune 50 companies are already demanding public chain track and trace use cases for which they are using the Viant platform to build their solutions.

18. The total market cap of blockchain-based digital assets will exceed $2 trillion U.S. dollars by January 1, 2019.

The price of ether will exceed $2,000 in 2018. Ether will continue to outperform bitcoin, and the total market cap of ether will exceed that of bitcoin in 2018.

8 fintech trends on our radar for 2018 (O’Reilly Media), Rated: B

  1. AI will be implemented across the stack
  2. New products will make advanced analytics easier
  3. Blockchain technologies will be used in financial services products
  4. Data partnerships will increase
  5. We’ll see even greater regionalization and regulation in payments – This is an area where both startups and global companies are flourishing. The technologies, protocols, and players vary by region. I’m amazed by how widely used QR codes are in China (WeChat and Alipay) and the rest of the world (GoPay in Southeast Asia, Paytm in India). For companies operating in the EU, PSD2 is a new 2018 regulation aimed at fostering innovation and competition in the payments industry.
  6. Customer experience will be increasingly mobile
  7. There will be increased pressure around privacy and security
  8. More quants will be analyzing or trading cryptocurrencies
Australia

Can a fintech lending firm disrupt the big four? (Asiamoney), Rated: AAA

As CVs for Australian bankers go, Jason Yetton’s background doesn’t quite scream ‘disruptor’. High-flyer perhaps, certainly ambitious and across trends. But helming a startup?

Two years on from Westpac and now running SocietyOne, the Sydney-based loans fintech that is one of Australia’s more prominent financial startups, the mid-career Yetton seems to bite with near evangelistic fervour the very hand of establishment banking that once nourished him.

Australian banking is backward in many critical areas, Yetton tells Asiamoney. He wants to see a tech-led democratization that would revolutionize payments and settlement, as well as lending, data and information infrastructure, while allowing customers to switch banks without penalty.

The current system preserves the status quo, Yetton says, in which the formidable foursome control 80% to 85% of Australia’s banking market and from which they earned a collective A$32 billion ($24 billion) in the 2017 financial year.

India

Funds Raised By Indian Startups Hit Three-Month Low (Bloomberg), Rated: AAA

Funds raised by Indian startups hit a three-month low, as four startups together managed to raise just around $10 million last week. That compares with $36 million raised by 10 startups the week before in angel, seed or venture capital funding.

Online lending firm Lendingkart Finance Ltd. raised around $3.7 million (Rs 25 crore) from the country’s largest public sector bank State Bank of India to grow its loan books, the company said in a statement.

Indian start-up ecosystem on a growth path in 2018 (Outlook), Rated: A

India’s start-up eco-system has been growing at a rapid pace and has all the right ingredients to support the fast paced economic growth of the country. With an addition of 1000 start-ups in the year 2017, the start-ups have played a big role in the growth of the Indian economy, making it a major source of employment, innovation and industrialisation.

i2ifunding, India’s second largest P2P lending platform plans to expand its business across the country, instead of focussing on metro cities.

Asia

LaLa World Global to Launch $ 10M Public Token Sale Jan. 5 (BusinessWire), Rated: AAA

Blockchain startup LaLa World is pleased to announce the long anticipated launch of the Lala Token sale to commence on January 5, 2018 and to run through February 5, 2018. A total of 150 Million LALA Tokens will be released in an initial coin sale (ICO) starting this Friday.

LALA World Products from their Financial Ecosystem Include:

  1. LALA Transfer – A Peer-to-Peer local and global remittance backed by crypto as well as fiat.
  2. LALA Bill Pay – Local and International bill payments for you and your family.
  3. LALA Lends – Domestic and International peer-to-peer lending via crypto and fiat, individual and small businesses.
  4. LALA Card – Crypto and Fiat card synced to your Wallet and usable at millions of PoS globally.
  5. LALA Kit – Contains a mobile phone with pre-loaded LALA Wallet, LALA Insurance, LALA Card, partners’ products, etc.

LaLa World is a wholesome financial ecosystem for the unbanked, starting with migrants and their families back home. Investors can purchase LaLa Tokens here: 

8 promising Fintech Startups in Singapore to Watch in 2018 (Fintech News), Rated: A

  1. MyCash Online is an online marketplace designed for migrant workers in Malaysia and Singapore.
  2. Instarem is a remittance startup that aims to offer fast, safe and cost effective cross border money transfer services for individuals and businesses from countries including Hong Kong, Australia and Singapore to more than 25 countries.
  3. Singapore Life is a new life insurance firm which commenced its operations in 2017 by providing insurance solutions via its online platform.
  4. soCash has developed a solution that allows people to withdraw cash at small businesses part of its “Cashpoints” network. The solution plugs into the mobile apps of banks.
  5. Bluzelle Networks is a blockchain startup that’s building a decentralized, on-demand, scalable database for decentralized applications.
  6. TenX is a cryptocurrency payment platform that consists of a wallet, physical debit card, bank account, ATM access and more.
  7. AGDelta is a Singapore headquartered fintech software company specialized in digital wealth management.
  8. Flywire, formerly peerTransfer, is a provider of international payment solutions headquartered in Boston with operations in Singapore, China, Australia, Spain and the UK.
Canada

New payday loan rules still too soft, says group (CBC.ca), Rated: A

On Monday, New Brunswick became the eighth Canadian province to introduce regulations governing the payday loan industry.

Earlier this week, the Financial and Consumer Services Commission announced a new set of regulations, including mandatory licensing for payday lenders, requiring then to display posters showing their rates, and making insurance on loans optional.

Lenders are also prohibited from issuing more than one loan at a time to the same consumer, or lending more than 30 per cent of the consumer’s net pay.

Under the new rules, the commission is able to take action against unlicensed lenders and those that fail to comply with legislation.

Africa

Kenya most lucrative market for fintech top staff in Africa (Business Daily), Rated: AAA

Kenya is the most attractive market in Africa for workers in the fintech industry with new data showing that companies pay the highest salaries in comparison to their peers on the continent.

In a recent survey, the Digital Frontiers Institute (DFI) found that executives and senior managers working for Kenyan fintech companies earn each a base monthly salary of Sh2 million (Sh24.6 million or $238,509 annually) and Sh1.2 million (Sh14.2 million or $137,303 annually), respectively.

Authors:

George Popescu
Allen Taylor

How a Loans Marketplace Can Change Online Lending

Magilla Loans marketplace

Magilla Loans is an online lending exchange founded in 2015 that connects borrowers to banks without requesting any personal information. The idea of building the “search engine” for loans was conceptualized by Chris Meyer, a graduate in BA Politics and history from Brandeis University, and Dean J. Sioukas, a graduate from the University of California […]

Magilla Loans marketplace

Magilla Loans is an online lending exchange founded in 2015 that connects borrowers to banks without requesting any personal information. The idea of building the “search engine” for loans was conceptualized by Chris Meyer, a graduate in BA Politics and history from Brandeis University, and Dean J. Sioukas, a graduate from the University of California in BA economics. They had first-hand experience of the struggle in applying for loans and getting the best deal possible. This motivated them to launch Magilla Loans and solve an important pain point for borrowers.

The Story Behind Magilla Loans

Confounded by the way traditional banks provide loans, Meyer and Sioukas wanted to create a search engine for providing multiple loan options to borrowers at one place. Meyer was tired of the providing private financial information to multiple banks and then working with them for two to three months to go through the entire process of underwriting and negotiation. In order to take the friction out of the process the founders envisioned creating a Kayak-like platform for borrowers and lenders. The marketplace is focused on the customer experience and the borrower gets to choose with which lender he wants to work.

Key Features of Magilla Loans

The key to Magilla Loans is that the borrower remains anonymous and does not have to provide any personal information such as name, phone number, or social security number while using the website. The only information the website asks the borrower for is their e-mail. The borrowers can compare the lender options without being spammed by banks or having their personal information sold to third parties, thereby providing complete anonymity while surfing the site.

Business Model

Magilla Loans has concentrated on premium borrowers with credit scores of around 700. This focus has given good returns with an average loan size of $1.4 million for business loans and $500,000 for home loans. A high-ticket size instantly differentiates the platform from the hundreds of players fighting in the sub-$100,000 segment. The Magilla Loans platform has FDIC-insured lenders, commercial banks, and hard money lenders with nearly 130 lenders on its search engine. There are no concerns about any violation with regards to Real Estate Settlement Procedures Act or the Dodd-Frank Act, as Magilla Loans is simply a marketplace.

The fee structure of Magilla Loans is based on CMSAs (Combined Metropolitan Statistical Area). The company has divided the United States into four CMSAs. It’s a subscription model where the lender pays a monthly fee for access depending on the CMSA targeted. There are no add-on broker fees.

The company does not charge any kind of fee from the borrowers. Its larger plan is to become a one-stop provider for them. The founders understand that once the loan is approved, the borrower will need services of appraisal, environment inspection, insurance etc. If it can collate all of these ancillaries in one place, there is a good probability that the borrower will choose loans from Magilla. This allows the platform to earn supplementary revenue and enhances the perceived utility of the website in the eyes of the borrower.

Magilla’s Working Process

The website is unique in a way that it empowers the borrower to choose the lender and the terms and not the other way around where banks get to choose the borrower.

Magilla Loans helps borrowers by finding and comparing the best loan terms without having the borrower apply to scores of banks individually. Magilla Loans sends a comparison chart (called a MagChart) incorporating proposals of nearly five to 10 lenders along with the rate, terms, closing costs, and other metrics. After performing their due diligence, the borrower chooses his/her lender. The borrower’s personal information is disclosed only to the lender chosen by the borrower specifically.

Why Traditional Lenders are Partnering with Magilla

Traditional lenders have lost a lot of space to fintech alternatives. Bloated cost structures have made it difficult for banks to be nimble in their marketing and outreach programs. The top 15 banks spend at least a billion dollars a year on marketing and business development. The Magilla model allows for banks to concentrate on underwriting rather than competing for leads in the marketplace. The founders believe they can reduce the marketing and business development budget of a bank by 50% and 25%, respectively.

The platform also allows for fine tuning the lenders’ portfolio. If a lender is heavily bullish on industrials and wants to focus on that market in the short term, Magilla Loans will only offer them applicants looking for industrial loans. This micro-targeting saves a lot of time for all parties involved.

Performance

Magilla Loans has experienced exponential growth. Currently, it has 130 lenders on board with 200 loan officers. Rather than spending millions of dollars in marketing, the company focuses on creating relationships with professional associations, dental and medical practitioners, and real estate brokers. The model’s success can be seen from the fact that it has had loan requests of over $3 billion on its platform in less than two years of operations.
It is currently limited to California and is seeking Series-A to roll out the model nationwide. The simplicity of the model allows the founders to harbor ambitions for international expansion, as well.

Conclusion

The US alternative lending market has grown aggressively over the last decade. VC funding has allowed many me-too startups to proliferate. Magilla Loans is a breath of fresh air with its focus on high-ticket size and a search engine model that does not disclose the borrowers’ personal information to lenders. With $3 billion in loan requests, the company is poised to dominate its niche.

Author:

Written by Heena Dhir.

Friday August 4 2017, Daily News Digest

immediate payments

News Comments Today’s main news: SoftBank invests $250M in Kabbage. SoFi begins search for IPO-focused CFO. MarketInvoice has record trading day. George Banco acquired by Non-Standard Finance. Yirendai made $40M net profits in Q2. ID Finance partners with Da Vinci Capital on $200M fintech fund launch. Lendingkart Group raises $10M in debt funding. Today’s main analysis: Square Q2 shareholder letter. Immediate payments […]

immediate payments

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

Israel

News Summary

United States

SoftBank invests in US online lender to small business (Financial Times), Rated: AAA

SoftBank is investing $250m in Kabbage, one of the biggest US online lenders to small businesses, in a deal that could provide the firepower for a potential takeover of OnDeck Capital, a rival digital lender.

Kathryn Petralia, co-founder of Kabbage, told the Financial Times that the deal would finance growth in the company’s direct lending operation, which has provided nearly $3.5bn of funding to more than 100,000 small businesses in the US.

There has been speculation that Kabbage is planning to make a bid for OnDeck, a rival online lender that went public in 2014 and has since suffered an 80 per cent fall in its share price, hit by growing losses, rising defaults and higher funding costs.

SoFi Hints at IPO, Reports Record Results (WSJ), Rated: AAA

Social Finance Inc. posted record earnings and loan volume in the second quarter, as the privately held company’s chief executive hinted that it is moving closer to an initial public offering.

In a letter to investors reviewed by The Wall Street Journal, SoFi Chief Executive Mike Cagney sounded more optimistic about a potential public offering, as opposed to previous forums in which he said no deal would be coming in the foreseeable future.

(LT Editor: Here’s the letter again–in case you missed it yesterday).

Source: SoFi

Goldman Sachs is Going Big on Lending (Lend Academy), Rated: AAA

The firm created GS Select to reach clients of nearly 4,000 independent investment advisors from Fidelity Investments. Clients will be able to borrow from $75,000 to $25 million backed by their investment portfolios.

What’s interesting about this move is that it could be expanded to other RIAs and financial advisors not just through Fidelity. We’ve seen this type of model before with self described “Lending as a Service” fintech companies, but this time it’s a big bank that has built this technology.

Source: Lend Academy

Square  Q2 2017 Shareholder Letter (LendIt), Rated: AAA

In the second quarter, our top-line results reflect our continued ability to attract larger sellers and increase product usage through cross-selling. Total GPV grew 32% year over year, and GPV from larger sellers grew 45% year over year. Transaction-based revenue increased 32% year over year—the same rate as GPV, which is a result of our ability to maintain transaction revenue margin. Subscription and services-based revenue nearly doubled year over year. Strong top-line growth, lower risk loss rates, and ongoing operating expense leverage drove another quarter of significant EBITDA and margin improvement.

We grew Square Capital loan volume 68% year over year and further diversified our investor base.

 

Source: Square Q2 2017 Shareholder Letter

Read the full report here.

An Australian Entrepreneur And Ron Suber Want To Fix America’s Student Debt Crisis With A Fintech Solution (Benzinga), Rated: A

A trillion-dollar black cloud of student debt hangs over multiple generations of Americans. Student debt is delaying marriages, major purchases, home ownership and general enjoyment of life for millions of people. There’s more student debt than even credit card debt.

Enter Credible CEO Stephen Dash. The Australian entrepreneur is taking inspiration from his home country’s approach to offer student borrowers a marketplace of easier options to get and refinance loans. Australia has an income-based debt repayment system, and Credible’s tech helps borrowers refinance to make affordable payments.

loanDepot’s Groundbreaking Tech Spurs Demand for New Innovation Lab (PR Newswire), Rated: A

loanDepot, America’s lender, today announced details of its new standalone tech campus, the mello ™ Innovation Lab. At this unique facility, the LD tech team will continue to innovate and expand mello, the company’s proprietary digital-lending technology.

With loanDepot’s goal to transform the lending industry, its mello ecosystem is shaping lending’s future as it expands its online and offline consumer relationship model. mello’s technology includes an intuitive web-based consumer portal, a state-of-the-art, mobile point-of-sale system, and a fully-digital mortgage loan application experience. The company has invested $80 million to date on its digital-first technology strategy.

loanDepot’s mello exists within a larger next-gen lending ecosystem that is boosted with the integration of digital-marketing tools and by third-party data enrichment that ensure greater accuracy, speed and certainty throughout the origination experience. On a massive scale, mello is changing the loan origination process into a digital consumer experience, making it faster, easier, and more accurate.

USAA lets members bare their financial souls to Alexa (American Banker), Rated: A

USAA went live Wednesday morning with a virtual assistant that works with Amazon’s Alexa voice interaction device and its corresponding shopping app. Now, USAA members — at least the first 400 that sign up at USAA Labs — can ask Alexa a range of questions about their accounts, balances, spending and transactions, and the bot will answer with specific details from the member’s USAA card and bank accounts.

In so doing, USAA is joining a small group of financial institutions — including Capital One, American Express and several credit unions — that have created Alexa Skills, as the chatbots that work with Alexa are called.

US CFTC Launches Initiatives to Promote Fintech in the Futures and Swaps Markets (Lexology), Rated: A

First, the CFTC announced Project KISS—“Keep It Simple, Stupid”—as a forum to examine how its existing rules might be applied in less costly and burdensome ways. Second, the CFTC launched LabCFTC as a way to promote responsible fintech and regulatory technology (“regtech”) innovation. Together, these initiatives appear to be a significant part of the CFTC’s response to calls for streamlined regulation from the industry, the White House and some members of Congress.

Project KISS

The CFTC website specifically invites public input on the following five “KISS Initiatives”:5

  1. Registration—the process of becoming regulated by the CFTC as any of the several entity types that the agency regulates
  2. Reporting—all reporting obligations, including swap data and recordkeeping
  3. Clearing—clearing services in connection with various contracts and transactions
  4. Executing—the execution of futures and swaps transactions
  5. Miscellaneous—any topics not specifically enumerated above

LabCFTC

This initiative is intended to enhance the agency’s involvement in fintech and regtech7 solutions and to support the goals of (1) providing regulatory certainty for fintech innovators and (2) enabling more efficient regulation through the use of emerging technologies. LabCFTC contemplates a variety of means to accomplish these objectives, including:

  1. Proactive outreach to and collaboration with the fintech industry to better understand the strengths and weaknesses of the CFTC’s current regulatory framework as applied to new technologies
  2. Participation in research and engagement with academia and professionals to harness and promote the advantages of fintech/regtech for the CFTC and the markets it regulates
  3. Collaboration with other financial regulators at home and abroad and the sharing of information about promising fintech applications and their potential risks
  4. The tracking of fintech developments to ensure that CFTC regulation supports rather than impedes innovation

Money360’s just getting started (Bankless Times), Rated: A

The company closed $143 million in loans in Q2, bringing its total to more than $350 million. It is on pace to top the $500 million mark before the end of 2017.

Many D.C.-area homeowners are guilty of this financial no-no — financing renovations on credit cards (The Washington Post), Rated: A

A May study by Hearth, a financial technology start-up that provides support for homeowners making renovation decisions, found that 12 percent of Americans planned to finance their renovation with a credit card, which is one of the most expensive ways to finance the cost.

The Hearth Home Renovation Survey, which asked 2,000 homeowners about their remodeling plans for the coming year, found the number of people planning to use a credit card to pay for their renovation is even higher in the Washington region at 16 percent.

In this region, 52 percent of homeowners prefer to pay with savings or cash, compared with 62 percent nationally. D.C.-area residents are also more likely to finance their project with a loan — 32 percent — compared with 26 percent nationally.

Computer says no: robo-advice is growing but we still don’t trust it (The Conversation), Rated: B

People are open to receiving financial advice from robots, our studiesshow, but there might be a way to go to in convincing people to trust them over a human.

We surveyed 138 people about their attitudes to, and preferences for, superannuation advice from a human or a computer. Unsurprisingly, most stated they would prefer to deal with a human across a broad range of financial decisions.

Some did prefer the computer – these tended to be younger people, and those on higher incomes.

Ideas to Help Cash-Strapped or Underbanked Consumers (Southeast Missourian), Rated: B

With the inception of new types of loans, cash-strapped customers can borrow a certain amount from alternative lenders. These loans entail borrowing money against your next paycheck. Unlike traditional payday loans, these lenders allow their customers a fair grace period to make their repayment, making it easier for borrowers to repay and meet their other financial needs. The traditional lenders, on the other hand, require borrowers to repay their full loan amount with their next paycheck.

Peer-to-peer funding is an alternative to acquiring financial aid. This entails letting other businesses invest in your business venture. Finding willing investors is not a hard process itself as you can acquire them by applying online. Small businesses can source one to five-year loans. The loans are available from widely known businesses like Lending Club.

Private Lenders to Gain Insight from Industry Experts (Benzinga), Rated: B

American Association of Private Lenders (AAPL) will hold its eighth annual conference Sunday, November 12 through Tuesday, November 14 at Caesars Palace in Las Vegas. The keynote speaker will be Daren Blomquist, Senior Vice President of Communications at ATTOM Data Solutions, formerly RealtyTrac, curator of the nation’s largest fused property database. The AAPL annual conference is one of the largest national events for private lenders and will include a full slate of speakers, resources, education and networking. More information can be found at .

First Associates Loan Servicing Opens a New 1000-Seat Operations Center in Baja California (Benzinga), Rated: B

First Associates Loan Servicing announced today the opening of their new 1000-seat capacity operations center in Baja California, Mexico. This state-of-the-art center will support the continued global expansion of First Associates and enable the company to continue delivering first-class service and security for their clients.

United Kingdom

RateSetter Milestone: Investors Fund £2 Billion of Loans & Have Earned More Than £76 Million in Interest (Crowdfund Insider), Rated: AAA

RateSetter recently announced its lenders have now delivered more than £2 billion in loans to people and businesses across the UK and in doing so have earned over £76 million in interest. According to the online lender, 94% of its lenders are individuals looking for a decent return on their money by investing, and accepting some degree of risk, rather than settling for the pitiful interest rates offered on bank deposits.

P2P business platform MarketInvoice marks record trading day (AltFi), Rated: AAA

The company had more invoice advances on 1 August than any other day.

The trading platform saw £4.1m  in invoice advances to UK businesses on Monday, a record setting day for the firm.

Usually £3.2m is the average amount that is advanced in a day. The increase in trading is largely do to MarketInvoice Pro, an invoice discounting facility.

RateSetter-backed lender acquired by Non-Standard Finance (P2P Finance News), Rated: AAA

RATESETTER investors are likely to get repaid early by George Banco following the acquisition of the guarantor loans provider by Non-Standard Finance.

Approximately £30m of RateSetter lending is currently outstanding to George Banco and many lenders will be repaid early as a result of the refinancing.

Blend Network launches with vow to be the “Goldman Sachs of P2P” (P2P Finance News), Rated: A

Blend Network will offer asset-backed property loans to retail and high-net-worth individuals, as well as hedge funds and other institutional investors. P2P specialist F&P will act as introducer for all of its loans, although Blend Network’s chief executive Yann Murciano said that he would be open to further partnerships in the future, as the business scales up.

P2P lending looks less than attractive on a forward-looking basis (AltFi), Rated: A

But, and yes, there is an important caveat, I am beginning to sense an important tipping point. Returns of between 4 and 6% pa from the big platforms – with an emphasis on the lower range of that spectrum – haven’t changed too much (in fact they’ve slightly fallen back). But I’m increasingly thinking that these returns are now inadequate for the potential of increased risk.

If one comes from a lending POV (point of view) then I would argue that the current returns are woefully inadequate, given where we are in the lending cycle.

  • The big banks are starting to increase their provisioning for bad debts
  • Here in the UK we’ve probably reached Peak Unsecured Lending with the BoE bearing down on all lenders about risk, worried senseless about a downturn in consumer spending as Brexit grinds on
  • The car lending market is quite clearly close to a systemic meltdown
  • ‘challenges’ are already appearing within the P2P space, most recently at Ratesetter where its wholesale lending capacity is being wound down
  • The housing market looks more vulnerable than ever before, with the very real possibility that we’ll see a steady drip feed of small price declines
China

Yirendai Made $ 40M Net Profits in Q2 and Dividend for the First Time (Xing Ping She), Rated: AAA

Yirendai, the first US-listed Chinese internet finance company, has recently issued its financial report for the Q2, 2017. In the second quarter of 2017, Yirendai has reached the loans volume of $1.22bn, increasing by 18 percent from the last quarter, especially increased 80 percent from the same period in 2016. By the end of second quarter, the accumulated loans transaction of Yirendai was up to $7.1bn.

Yirendai’s main revenue was charged for service fee from borrowers and lenders. As a result, its income scale is increasing rapidly with the fast growth of loans volume. In the period, Yirendai has made net income of $176 million, increasing by 16 percent from the last quarter and 61 percent from the same period of last year.

Tencent and national development banks to practice the national “Internet +” strategy (163.com), Rated: A

(Hereinafter referred to as “National Bank”) and Tencent (hereinafter referred to as “Tencent”) in Shenzhen Tencent headquarters signed the “Internet +” development of financial strategic cooperation agreement. “.. In the future, the two sides will be in the Internet + precision poverty alleviation, Internet financial innovation, domestic and international credit financing, Kechuang enterprise cultivation, information technology applications and many other areas of long-term, stable, in-depth and sustainable strategic cooperation. Chairman of the State Development Bank Party Committee, Vice President Zhang Xuguang, Director of the China Development Bank Shenzhen Branch Wu Liangdong, Vice President of Tencent Xie Qinghua, Tencent Internet + Strategic Cooperation General Manager Zhang Wei attended the signing ceremony of strategic cooperation.

European Union

ID Finance Teams Up With Da Vinci Capital to Launch $ 200 Million Fintech Fund (Crowdfund Insider), Rated: AAA

Marketing fintech firm ID Finance announced on Wednesday it has joined forces with former Elbrus Capital fund manager, Yuri Popov, and asset management Da Vinci Capital to launch FinTech Credit Fund, which is described as a $200 million debt finance fund aimed towards fintech companies with a focus in alternative lending.

ID Finance also reported that the Fund will initially focus on projects within the CIS and European markets. Funding will be provided to companies involved in consumer/SME lending, with balance sheet and marketplace lenders being eligible.  Projects offering analytical solutions for credit scoring based on Big Data, AI and machine learning, as well as SaaS and PaaS solutions and payment services are of particular interest to the Fund and align with the investors’ areas of expertise.

International

GIC to invest in US talent agency (Straits Times), Rated: A

Singapore sovereign wealth fund GIC, along with Canada’s largest pension fund manager, will invest US$1 billion (S$1.4 billion) in American talent management agency WME-IMG.

Canada Pension Plan Investment Board, in a separate statement, said it would invest about US$400 million for an 8 per cent stake in WME-IMG, which owns brands like Ultimate Fighting Championship and the Miss Universe Organisation.

The US firm also counts the SoftBank Group, Silver Lake Partners and Fidelity Investments among its investors. Terms of the transaction were not disclosed.

Australia/New Zealand

Harmoney’s loss is really a gain (AltFi), Rated: AAA

New Zealand peer-to-peer lender Harmoney’s revenue climbed 63 percent this year, edging the company closer to profitability.  While still loss-making, Harmoney has halved its losses from $NZ14 million last year to $7 million this year.

As well as climbing revenue, its financials were helped by a 15 percent drop in marketing costs, suggesting the company has grown out its brand recognition to a point where it feels comfortable paying less for advertising.

To date, Harmoney has lent more money than any other Kiwi P2P platform.

A new whitepaper by CoreData and HUB24 titled ‘The modern face of advice’, argues that while technological tools were reshaping the wealth management industry, the role of advisers remained critical and the relationship they built with their clients remained more relevant than ever.

The paper, which is based on interviews with advisers, said technology used in advice practices continued to mature and costs, including platform fees and management expense ratios were decreasing to boost bottom line results of firms.

Robo-advice could play a role in tapping into the estimated $2 trillion worth of unadvised savings in Australia but awareness was still in its infancy. However, the Australian Securities and Investments Commission’s (ASIC’s) ‘RG255: Providing digital financial product advice to retail clients’suggested robo-advice was here to stay.

India

Lendingkart Group raises $ 10 million in debt funding (Medianama), Rated: AAA

Lendingkart Finance Limited has raised $10 million in debt funding from Kotak Mahindra Bank, Aditya Birla Financial Services, and other financial institutions. The funds will be used to expand its operations to 700 cities and restock its loan book.

Retail banking may lose 55% of business to fintech (livemint), Rated: AAA

The retail banking sector could lose up to 55% of its business to fintech firms if it does not up the ante in terms of investment in digital transformation, according to a new study titled ‘Enterprise Digital Transformation: Evaluating Indian Enterprises’, brought out jointly by research firm Frost & Sullivan and software lobby body, Nasscom.

 

Havas Media bags integrated media mandate of Faircent.com (Exchange 4 Media), Rated: A

Havas Media Group, India has bagged the integrated media duties of Faircent.com, India’s largest peer to peer lending platform. The account will be handled out of the agency’s Gurgaon office.

Digital Disruption: Lending Trends Turn the Next Leaf! (DQ India), Rated: A

Lending in India is hard as only a fraction of people have access to organized credit. Less than 50% of SMEs get access to bank  finance. The lack of access to credit is forcing people to depend on money lenders at high rates of interest. In India, of the over 1.3 bn population, 600 mn is working class, out of which 150 million has access to credit and 20 million have scores acceptable  to banks.

P2P lending provides investors higher returns than investing in mutual funds/ stock markets, which are linked to the stock market and come with a risk of losing money due to their inherent volatile nature. With the lower interest rates, traditional investment tools like FDs and RDs look less attractive to customers.

Peer-to-Peer loans give regular monthly income to the investors in the form of EMIs.

Now own a piece of prime real estate investing a few thousands (India Times), Rated: A

RealX, a pune-based fintech start-up, has completed India’s “first fractional ownership” deal in real estate sector. The platform has bought a commercial property in Karad (Maharashtra) by pooling in investments from about 19 investors, RealX officials claimed.

RealX is an ecommerce platform which will allow property sellers and agents post their saleable property. Registered buyers, on the other side of the platform, could invest in these projects. The minimum investment threshold, currently, is Rs 5 lakh per investor.

Asia

Immediate payments key driver of banking revenue (The Asset), Rated: AAA

Sixty-six percent of banks with live IP systems in place see it as a revenue driver for their institution, which compares to less than 50% for companies without IP systems in place. Moreover, for all banks 53% say that IP will drive revenue growth for their organization, 61% believe that IP will enhance their level of customer service and 60% expect IP to reduce costs.

While 65% of surveyed institutions stated that open APIs would benefit their customer-facing proposition banks differed in their implementation strategy. The majority (55%) of banks opted for immediately creating open APIs and interfaces for developers, while a minority (45%) took a ‘wait and see’ approach.

Source: The Asset

Mastercard and PayPal expand Partnership in Asia (The Asset), Rated: A

The deal will expand PayPal’s presence at the point of sale and enable Masterpass for Braintree merchants in the region. Additionally, both companies will collaborate to create opportunities to leverage Mastercard’s new payment flow technologies, providing increased value to Mastercard cardholders, financial institutions, and PayPal customers. PayPal will also have the opportunity to give consumers and small businesses across Asia-Pacific the ability to cash out funds held in their PayPal accounts to a Mastercard debit card.

Israel

All of Israel’s FinTech innovation geniuses have left the country and taken their brilliant ideas with them (Finance Feeds), Rated: AAA

Israel was never a center of actual trading, but was always synonymous with the brilliant minds that invented every ancillary service from digital marketing and conversion funnels that have brought tremendous efficiency to retail brokerages, Plus500 being a case in point, to social trading networks that have prospered on a gigantic scale across China – read eToro’s efforts with PingAn as very much an example where other social trading ventures wilted and disappeared.

Mr Mandelzis secured $40 million in venture capital from Sequoia Capital and sold the company to ICAP in 2007 for $250 million which became the subject of a Kellog Business School case study.

Where is Mr Mandelzis now? New York.

Optimove consolidates, mines and models customer data, dynamically grouping customers into micro-segments, and forecasting their future behavior and value.

Optimove is headquartered in New York, and is a completely American company.

Social trading has died a death. There is very little evidence of the large firms that used to dominate, and most of that technology came from Israel.

The only one in existence is eToro, which is a social investment platform.

Authors:

George Popescu
Allen Taylor

Funding Commercial Real Estate Loans Online

commercial real estate loans

P2P lending was born out of unsecured lending between individuals. The ticket size was usually a few thousand dollars. In a sign of how much the market has evolved, fintech lenders now cover commercial real estate loans with ticket sizes ranging from $1 million to $20 million. This evolution is being led by a host […]

commercial real estate loans

P2P lending was born out of unsecured lending between individuals. The ticket size was usually a few thousand dollars. In a sign of how much the market has evolved, fintech lenders now cover commercial real estate loans with ticket sizes ranging from $1 million to $20 million. This evolution is being led by a host of players with RealtyMogul, Sharestates, Patch of Land, and Money360 dominating their respective niches.

Money360 is an online marketplace for commercial real estate loans and caters to both institutional as well accredited retail investors. They secure the property with a first priority lien against income-producing commercial real estate, and, for the borrower, they focus on bringing convenience, speed, and reasonable commercial terms to the deal. Along with this, they run an investment management company, M360 Advisors, which manages diversified fund vehicles for institutional and accredited retail investors.

Money 360’s Background

Co-founder Evan Gentry started MoneyLine Lending Service, a mortgage lending company that transitioned into a mortgage tech company. The company was sold to Genpact, a spinoff from GE. He then started G8 Capital in 2007, a private real estate investment firm specializing in the acquisition of commercial real estate and non-performing loans. The company made most of the real estate meltdown in 2007-08 and bought non-performing residential as well as commercial loans. From 2007-2014, the company acquired distressed assets (major commercial real estate loans) worth $800 million. As the market has normalized, the company stopped acquiring further loans.

Gentry and his partner Daniel Vetter founded Money360 in 2010. It was a logical step forward considering Gentry had ample experience in mortgage, real estate, and investments, as did Vetter, a veteran of PIMCO and alumnus of Harvard Business School. After closely studying the business models of LendingClub and Prosper, and beta testing it on the real estate market, they zeroed in on commercial real estate bridge loans.

How Money360 works

In the beginning, they would source commercial projects that needed funding and potential investors who wanted to invest in the project; for instance, 10 investors pitched in for a $5 million loan. This model was not scalable and they shifted their focus into selling loans to whole loan buyers. In order to attract accredited retail investors, Money360 needed a more refined and sophisticated product; they needed to be diversified across multiple loans. Inspired by LC Advisors, they launched M360 CRE (a commercial real estate income fund), which was launched last year and is on track to achieve a fund size of $180 million this month.

The company does not crowdfund its loans. They either buy loans through the fund or partner with whole loan buyers like federal credit unions and banks.

Products and performances

Money360 has two primary products:

  1. Bridge Loan – Available for commercial real estate for a maximum of two years. Returns range from 8%-10%, loan-to-value (LTV) is usually 65%-70%, but in some cases can go up to 80%. Loan size is between $1 million to $20 million and, to safeguard its interests, Money360 holds the first lien position. The company did $45 million in loans in April and in the process broke its monthly record. The secret behind its success is a well-executed business model. Though they leverage technology for underwriting and processing, origination and due diligence are still performed using traditional models. Money360 have eight development officers who work with local borrowers and brokers around the country. By the end of the year, the company wants to cross the elusive $100 million per month mark.
  2. Permanent Capital – They also offer competitively-priced 7-10 year loans, which are funded in-house and then syndicated to banks and credit unions.

The Money360 Difference

The team at Money360 is immensely experienced, and that is proving to be a difference maker in the highly competitive commercial loan market. The CTO has over 20 years experience in mortgage technology and, with his expertise, the company has developed technology that allows them to accelerate the underwriting and closing process as well as streamline the entire back-end process. This allows investors and whole loan buyers to track details of every single deal in a detailed manner.

Another difference is the reputation of management. Unlike other players in the industry, the company and its founders have a proven track record of scaling up companies into multi-billion dollar entities. Because of that, it is easier for the company to attract investor interest as compared to competitors.

Compliance & Investors

Accredited retail investors own the real estate loans through a REIT structure, which gives them diversification across all loans in the fund. They use marginal leverage and are able to provide returns of 8%-10%. Money360 have been able to attract influential institutional investors and have one of the largest banks in South Korea as an investor in the fund.

The company expects to become the market leader in the commercial loan segment in terms of origination by the end of the year. After successfully carving its niche in the market, the company is now looking for strategic partnerships to extend its dominance.

Competitors

Considering commercial real estate is a multi-trillion dollar market, fintech startups represent a very small fraction. Most of its competitors deal in crowdfunding whereas Money360 specializes in being a direct lender. This difference is a major competitive advantage as it shortens the time period for processing and allows for more flexibility to the borrower. Also, competitors mainly focus on fix-and-flip real estate. Having already fixed and flipped 4,000 residential properties in G8, they know it is a cyclical market, which is why they are concentrating on stable and more permanent commercial loans.

Even Realty Mogul, one of the most famous online real estate crowdfunding marketplace, prefers equity over debt funding, or, in some cases, both types of funding are done. This is fine as long as project/asset is performing, but in the case of a non-performing asset/project, a conflict of interest arises between equity and debt holders.

Conclusion

Money360 is headquartered in Ladera Ranch, California and has a team of 30 people. The company has the benefit of a hugely experienced founding team coupled with a razor sharp focus on what it does best. The company’s focus limits its reach, but the niche it has chosen is a trillion dollar market, which it is clearly dominating.

Author:

Written by Heena Dhir.

Thursday July 13 2017, Daily News Digest

alternative lending deal tracker

News Comments Today’s main news: SoFi aims for 12 ABS deals in 2017. Funding Circle’s business boomed after Brexit. Dianrong acquires Quark Finance asset-origination operations. Mambu recognized as European growth excellence leader. Santander invests in three fintechs. Today’s main analysis: Europe’s alt finance market hits $9.1B in Q1. Today’s thought-provoking articles: How non-prime millennials struggle. Top 40 payments trailblazers. United […]

alternative lending deal tracker

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

Canada

News Summary

United States

SoFi preps new deal, aims for 12 in 2017 (Global Capital), Rated: AAA

Online lender SoFi is on track to sell its eighth ABS this month and is said to be looking to bring as many as 12 deals through year end across student loan refinancing and consumer loan platforms.

Money Management by Non-Prime Millennials: How They Struggle and Worry More Than Their Peers (BusinessWire), Rated: AAA

Young people have always struggled with money, but for non-prime Millennials today, managing their personal finances is especially hard, according to the final two studies in a series of Millennial-focused reports by Elevate’s Center for the New Middle Class.

According to the research, 58 percent of non-prime Millennials – those with credit scores below 700 – find themselves living paycheck-to-paycheck and 41 percent run out of money every other month, or more often.

Additional key findings include:

  • 13 percent of non-prime Millennials admit that it is difficult to predict their month-to-month income
  • 13 percent regularly overdraft their savings or checking accounts
  • 64 percent say that they have too much debt right now, twice as likely as prime
  • Only 37 percent of non-prime Millennials express any confidence that they could come up with $1,200 for an emergency expense in a month
  • Non-prime Millennials are 71 percent less likely to turn to credit cards if they needed to come up with $1,200, compared to their prime counterparts
  • Are more likely to experience unexpected car repairs or non-routine medical expenses
  • Are 45 percent less likely than prime Millennials to maintain a monthly budget
  • Are 58 percent less likely than prime Millennials to put aside money for savings

Invesco co-launches robo-advice platform for financial advisers (AltFi), Rated: A

The U.S. platform will provide a digital space for financial advisers to open new accounts.

Investment management giant Invesco is continuing its foray into digital wealth management.

The company is co-launching a U.S.-based platform for financial advisers through its wealth management solution company, Jemsteps. The site is for financial advisors affiliated with Advisor Group, an American network of independent financial advisory firms.

Funding Circle Names New Chief Compliance Officer for US (Corporate Counsel), Rated: A

Funding Circle Ltd. has named Richard Stephenson as its U.S. chief compliance officer. He joins the San Francisco-based small business lending platform after working in financial services for three decades, most recently as the CCO of Silicon Valley Bank.

Stephenson has also held various senior roles with financial institutions and in private practice, including at Bank of America, Union Bank, Washington Mutual Bank and Mechanics Bank.

For a fintech company, particularly one that partakes in lending, Hodges said it has been important to prioritize compliance, given all of the uncertainties in the regulatory space.

Sindeo is back in the mortgage business after acquisition (Inman), Rated: A

“Renren, one of Sindeo’s investors, has acquired Sindeo and all of its assets,” Nick Stamos, one of Sindeo’s co-founders, told Inman in a statement. “We are excited to work closely with the Renren team to execute on our original mission of offering homebuyers a straightforward path to home ownership and refinancing.” He did not disclose the terms or the sum of the acquisition.

Ex-Merrill Lynch FAs with $ 1B in Assets Go Indie (Financial Advisor IQ), Rated: A

A team of Merrill Lynch financial advisors has jumped ship to launch a new independent wealth management practice, according to a press release from Dynasty Financial Partners, with whom the team has partnered.

Celenza, who’s been an advisor for close to 20 years and with Merrill Lynch for six of them, says the decision to go independent was prompted in part by the ability to access “a greatly expanded selection of investment capabilities, lending platforms, sophisticated insurance products, planning resources, capital market solutions, and alternative manager opportunities.”

Treasury quietly looking at revamping CRA (American Banker), Rated: A

The Treasury Department is embarking on an effort to revise the implementation of the Community Reinvestment Act, a law many community groups say is out of step with modern banking practices and that institutions say has devolved into a compliance exercise.

Tucked away in Treasury Department’s regulatory reform report released last month was a nascent effort to reform the way regulators implement the CRA — a law intended to compel banks to offer loans and financial services to low- and moderate-income areas.

Backed by Israeli Bond Funds, Moinian Capital Partners Rides the Nonbank Lending Wave (Commercial Observer), Rated: A

When the Moinian Group tapped Morgan Stanley and UBS alumnus Jonathan Chassin to lead its newly formed real estate lending platform, Moinian Capital Partners, in February, it was a testament to the Joseph Moinian-led firm’s ambitions to become the latest developer to expand its business into the realm of financing.

Thus far, Moinian Capital Partners has sought to focus its energies on “smaller, $50 million to $100 million development deals where we can quote the whole loan,” Chassin said—the sorts of projects that often have greater difficulty securing funds from more established debt lenders.

The operation is also finding success in the market for mezzanine debt, where its flexibility as a nonbank means it can provide “additional terms that other lenders don’t,” Chassin said. “Where banks and traditional mezz funds are doing five-year deals as a rule, we can quote six- or seven-[year terms]. We can do bridge deals because we understand the basis and understand the market.”

Coinsource Launches Five Bitcoin ATMs in Phoenix (Crowdfund Insider), Rated: A

Coinsource, a bitcoin ATM network, announced on Monday it launched five new machines in Phoenix Metropolitan Area, marking its first venture into Arizona. According to the company, the bulk installation caps off a strong first and second quarter, with it installing 50 machines so far this year, now with a portfolio of 116 machines across 10 states. The five new Bitcoin ATMs have been installed in Phoenix, Peoria, and Mesa.

CrediFi enables real time streaming of real estate deal and client data directly into Salesforce (PR Newswire), Rated: A

CrediFi Corp., the market intelligence and deal discovery engine for commercial real estate (CRE) finance, has announced the launch of a new solution that seamlessly streams CrediFi data into the Salesforce® CRM platform with the click of a button.

CrediFi simplifies the work of CRE dealmakers by serving as the one-stop-shop for data and analytics on commercial properties and loans as well as CRE owners and lenders. Now, CrediFi enables users to sync its vast repository of CRE data seamlessly and directly into Salesforce.

The launch of CrediFi for Salesforce® follows the April launch of CredifX, an online marketplace for CRE financing, and CrediFi recently secured $13 million for its Series B funding.  Michael Helpern has joined CrediFi’s team as Head of Strategy, and will oversee further innovation of solutions for this market. Mr. Helpern brings with him over a decade of experience in commercial real estate brokerage, at firms including Marcus & Millichap and CBRE.

Thales provides database encryption solution for Beyond Platform’s peer-to-peer lending service (PR Newswire), Rated: A

Thales announces internet-based financial services technology company Beyond Platform has adopted Vormetric Transparent Encryption from Thales to deliver a secure credit evaluation model for its peer-to-peer (P2P) lending platform.

Beyond Platform wanted to implement a data security system that offered a security level required by the major banks in order to comply with the Personal Information Protection Act (PIPA) in South Korea. In addition, the solution needed to pass a security review by NongHyup Bank (an agricultural and retail bank in South Korea)  with whom Beyond Platform was developing a joint P2P lending service. Beyond Platform adopted Vormetric Transparent Encryption from Thales to encrypt structured and unstructured data in an enterprise system. As a result, it met the database encryption requirements and passed the bank security review, opening the floodgate for developing and launching P2P services. In addition, the company has built a reputation among customers as a reliable and safe P2P provider.

Vormetric Transparent Encryption is a kernel-level encryption solution that encrypts all file types including logs and images as well as database data, so there is no need for enterprises to purchase a separate encryption solution for database encryption and unstructured data encryption.

EPHESOFT SECURES $ 15M SERIES A FUNDING FROM MERCATO PARTNERS (Ephesoft), Rated: A

Ephesoft Inc., the developer of document capture and analytics solutions that extract meaning from unstructured content, today announced that it has completed a $15 million Series A financing round. Mercato Partners, a trusted growth capital partner, is the exclusive investor in this round. The investment will be used to accelerate Ephesoft’s product development while expanding operations, market presence and sales channels. Joe Kaiser of Mercato Partners will join the Ephesoft Board of Directors as part of the investment.

Founded in 2010, Ephesoft has developed advanced machine learning solutions that capture, extract and analyze unstructured content. The company has over 500 customers globally ranging from financial services, Federal government, insurance, mortgage and healthcare sectors.

Why Chicago is the best city to launch a fintech company (Crain’s Chicago Business), Rated: A

Chicago was recently ranked among the top five global fintech hubs by Deloitte and the Global FinTech Hubs Federation, thanks in part to FinTEx Chicago’s strong advocacy. Further, fintech and financial services companies even account for 14 percent of the 50 fastest-growing companies in the region, according to Crain’s 2017 Fast 50.

And most important, the financial sector is driving real job growth in the city. The U.S. Bureau of Labor Statistics reported that as of March, year-over-year employment in Chicago’s financial sector grew 3.6 percent—more than double gains in the next-highest industry. That also trounces growth of 2.2 percent in the financial sector nationally.

AlphaFlow Launches “Tax Implications of Crowdfunding” eBook (Benzinga), Rated: B

To help investors more effectively evaluate real estate crowdfunding investment opportunities and their potential tax implications, AlphaFlow has released its inaugural eBook: “Tax Implications Of Crowdfunding.” This 23-page eBook, written by AlphaFlow and Sundin & Fish, CPA, closely examines the top tax issues investors must consider as they invest across the real estate crowdfunding industry.

  • A few of the topics discussed in this eBook include:
  • Types of crowdfunding platforms
  • Differences between debt and equity deals
  • Federal and state tax issues
  • Pros and cons of using self-directed IRAs
  • Unrelated Business Taxable Income (UBTI)
  • Tax planning and strategies

Ballard Spahr closes San Diego office (Bloomberg Law), Rated: B

Ballard Spahr, which recently lost two partners to Dinsmore & Shohl, said it has closed its office in San Diego, transferring other lawyers from the city to its Los Angeles office. (Legal Intelligencer)

United Kingdom

Funding Circle CEO Says Business Boomed After Brexit (Bloomberg), Rated: AAA

ThinCats teams up with Alderburn Finance to fund Scottish marine trainer (P2P Finance News), Rated: A

THINCATS has sealed a deal with commercial finance broker Alderburn Finance and Stream Marine Training (SMT) to help the latter step up its cost efficiency and growth plans.

The peer-to-peer lending platform, which channels funds to small- and medium-sized enterprises, will help the Scottish training specialist cut time and overall costs as it plan to boost its consultancy services to the global maritime, oil and gas, renewables and construction sectors.

Edinburgh-based Alderburn Finance acted as a loan sponsor, as it vetted the borrower’s funding application and assisted ThinCats in the origination process.

Navigating a complex market (P2P Finance News), Rated: A

Despite being around for many years, direct lending, which also encompasses peer-to-peer (P2P) lending, has only recently been recognised as a mainstream asset class.

There are several fundamental things to consider if you are thinking about direct lending as an addition to your investment portfolio.

  • Your objectives: Be clear about your objectives and your appetite for risk. Why are you investing?
  • Timing: Investing in direct lending can be more effective if you keep your money invested for at least 12 months.
  • Diversification: Diversification is also an effective tactic.
  • Loan opportunities: A good rule of thumb is to use the RADAR principle: reason, assets, duration, amount, repayment.
  • Investing for Capital Growth or Income: The concept of compounding applies to direct lending in the same way as other investments.
  • Taking control: Finally, it’s good to stay pro-active.

 

China

Dianrong Acquires Asset-Origination Operations of Quark Finance (PR Newswire), Rated: AAA

Dianrong today announced the acquisition of Quark Finance’s asset-origination operations, including the new Credit Studio platform. This transaction will significantly expand and strengthen Dianrong’s existing asset-generation capabilities across China.

Quark Finance operates 71 borrower service centers in 47 Chinese cities. These centers provide comprehensive loan underwriting data collection and servicing. Dianrong already operates 28 technology-enabled borrower service centers in 27 cities in China.

Additionally, Quark Finance owns and operates Credit Studio, a platform that provides data analysis through automated and human interactions to achieve mass-production credit evaluations and processing. Credit Studio leverages Dianrong’s technology to minimize manual activities and lower operational risks, expenses and processing time. Marketplace-lending assets generated by Credit Studio are available to Dianrong and Quark Finance lenders.

By combining Quark Finance’s borrower network with Dianrong’s existing local footprint and fintech capabilities, Dianrong is adding significant scale to its overall asset-generation capabilities. The combination also adds new distribution channels for Dianrong’s borrower lending products and services.

Wang Zhengyu: It will take more time to make profit for China Rapid Finance (Xing Ping She), Rated: A

Recently, China Rapid Finance held a media briefing on IPO issues and Q1 financial report. Just before the meeting, Wang Zhengyu, the CEO of China Rapid Finance, revealed that the company currently is still in the loss. Although, it doesn’t mean a bad management for the company, it’s just a problem of time to make money.

In Q1 2017, China Rapid Finance’s net loss is $149 million, decresed by 46 percent on the basis of the earlier time. The net revenue is $10.5 million, declined by 20 percent compared with the beginning of the year. In fact, China Rapid Finance has been being losed for two consecutive years, the loss amount in 2016 and 2017 were $33.366 million and $3002.6 million respectively. In 2014, the profit was only $131,000.

European Union

MAMBU RECOGNISED AS EUROPEAN GROWTH EXCELLENCE LEADER (Financial IT), Rated: AAA

Mambu, the SaaS banking engine powering innovative loan and deposit products, today announced that they have been named the European Growth Excellence Leader for Native Cloud SaaS Banking and Lending by research and consulting firm Frost & Sullivan.

Frost & Sullivan’s global team of analysts and consultants research a wide range of markets across multiple sectors and geographies identifying companies that maintain consistently high standards for delivering customer value, which translates into growth above the industry average.  The award recognises the company which excelled in driving growth and is best-in-class in three key areas: meeting customer demand, fostering brand loyalty and carving out a unique, sustainable market niche.

Santander Buys Stakes in Three Startups as Botin Pushes Into Fintech (Bloomberg), Rated: AAA

Banco Santander SA, Spain’s biggest lender, bought minority stakes in three financial-technology firms as Chairman Ana Botin makes machine learning a hallmark of her growth plan.

Pixoneye’s algorithms can build a profile of a consumer from photographs stored on his or her smartphone or other device, while Gridspace utilizes artificial intelligence to analyze the sentiments of people on phone calls with customer service representatives.

Europe’s alternative finance market hits $ 9.1 billion in first quarter (Consultancy.uk), Rated: AAA

The alternative finance economy for mid-market players across Europe hit $9.1 billion in closed deals across the first quarter of 2017. Deal activity in the relatively new segment hit more than a 1000 accumulative deals this year, with the UK remaining out ahead in terms of closed deals – at almost 400. Fundraising for buyouts remains the driving force for turning to alternative lending platforms.

In response to demand, marketplace lenders (MPLs) have sprung up – usually as online platforms – which, through a range of new mechanisms, offer an easy means for peer-to-peer lending across a range of segments – with low returns on other forms of assets continuing to entice investors to the market.

Source: Consultancy.uk

In total around 1011 deals were completed in the past 18 quarters across the burgeoning market, with 612 of those in Europe and 399 in the UK – making the UK by far the largest contributor in terms of activity.

In the UK the most deals took place in the technology, media & communications segment, at 19% of all deals, followed by the business, infrastructure & professional services segments, at 18%. Human capital represented 6% of deals in the UK, while financial services firms accounted for 10% of closures.

Source: Consultancy.uk

ECN Reminder to Complete Cross Border Crowdfunding Survey (Crowddfund Insider), Rated: A

The European Crowdfunding Network (ECN) is reminding alternative finance industry types to complete the survey on cross-border crowdfunding and online lending (IE P2P lending, marketplace lending etc.).  The survey deadline is 12 Noon this Friday, July 14th.

The survey focuses only on crowdfunding models that entail a financial return, notably:

  • investment-based crowdfunding (where companies issue equity or debt instruments to crowd-investors through a platform) and
  • lending-based crowdfunding (where companies or individuals seek to obtain funds from the public through platforms in the form of a loan agreement)

Paycock Enters Russian Fintech Market with Its Convenient Mobile Payment Service (MarketWatch), Rated: A

The K-ICT Born2Global Centre, a major Korean government agency under the Ministry of Science, ICT and Future Planning (MSIP), announced that Paycock, one of its member companies, has signed a business MOU with AEB IT, a Russian financial IT corporation. As a result, Paycock will now begin commercializing its mobile payment solution to satisfy the needs of the Russian financial market, which is expected to undergo rapid growth in the near future.

Paycock Check is a mobile payment service that does not require a card-reading device, as the entire payment process is conducted using only a smartphone camera and near field communication (NFC) technology.

Fintech lender strikes partnership with major Italian bank (AltFi), Rated: A

iwoca has announced a strategic partnership with Italy’s Intesa Sanpaolo. The fintech lending platform will now sell its credit products into the Italian banking group’s SME client-base.

Intesa Sanpaolo is one of the biggest banking groups in Europe, with a market capitalisation of €42.7bn. The company boasts over 11.1 million customers in Italy alone, but is also active across Central Europe, Eastern Europe, the Middle East and North Africa.

International

Top 40 Payments Functions Trailblazers (Everest Group), Rated: AAA

Australia

Why a majority of Australians don’t know about peer-to-peer lending (news.com.au), Rated: A

New research by Finder.com.au has found despite the sector growing from one to eight lenders since it launched in Australia in 2012, 65 per cent of consumers don’t know about it and women are less likely than men to understand and use it.

Finder’s research found that only 8 per cent of women would consider using a P2P lender, compared with 20 per cent of men, and three-quarters of women do not know what it is.

Finder’s data shows 63 per cent growth in P2P users in the past six months, while data from some providers shows 195 per cent growth last financial year.

India

Accel-backed Good Methods Global acqui-hires fintech startup Save Your Money (VC Circle), Rated: AAA

Save Your Money (SYM), a fintech startup that offers an automated micro-saving platform, has been acqui-hired by health-tech startup Good Methods Global (GMG), a company statement said.

What is LoanAdda doing to make itself profitable in a crowded market? (Your Story), Rated: A

But all this was far from the mind of Anshuman Mishra (39), when he set up LoanAdda in 2015 to make loans available to large sections of people left out from the purview of the informal and formal banking channels.

As someone who was responsible for managing ICICI Bank’s priority sector lending business, he was acutely aware of the limited access to credit for unbanked customers and poor guidance in facilitating loans.

Today, 78 percent of LoanAdda’s customers are first-time loan takers. Moreover, LoanAdda’s technology algorithm follows its own logic while measuring the eligibility of a certain customer to take loans and throws up the best possible product to the consumer.

Currently, LoanAdda has tie-ups with more than 42 banks to provide home, business, personal, gold and collateral loans on its platform. Through a partnership with India Infoline, an NBFC, the company also gives out its own loans.

Anshuman says that 50-60 percent of LoanAdda’s customers are salaried people with a monthly salary of less than Rs 40,000. The average ticket size is Rs 3.39 lakh for unsecured loans and Rs 34 lakh for secured loans. However, 70-75 percent of all loan takers on the platform get loans of less than Rs 30 lakh.

Why Indians Should Invest in Peer-to-Peer Lending (BW Disrupt), Rated: B

Online peer-to-peer lending as a prospective investment class offers many unique propositions.

  • Net Returns and Interest Yields

While savings accounts or fixed deposits usually yield interest rates of 6% to 8% on average, Mutual funds on the other hand, offer returns averaging at 9% to 13%, with some funds yielding up to 15% p.a. Compare this to online P2P loans, which can generate average net returns of 18% to 22% p.a for lenders.

  • No Lock-in period, enjoy benefits of compounding interest
  • Risk Mitigation

As with any debt-based investment, there is a risk of default in online P2P lending as well. But since the premise on which P2P lending is based is similar to that of debt instruments, the capital risk is lower, and there are ways to mitigate it. One of these is diversification.

Asia

Singapore and Thailand Central Banks Unite in FinTech Deal (Cryptocoins News), Rated: AAA

The Bank of Thailand (BOT) and the Monetary Authority of Singapore (MAS) have entered a FinTech Cooperation Agreement (CA) to further develop and enhance the existing financial ecosystem in the ASEAN region.

The agreement aims to “develop a richer financial ecosystem” in both countries and South-East Asia, an announcement revealed. As per the agreement, both central banks will also share information on new and emerging market trends in an era of micro-financing and digitization as well as their impact on traditional regulatory practices.

Vertex Ventures invests $ 2m in Turnkey Lender (Deal Street Asia), Rated: AAA

Turnkey Lender, a cloud- based loan management system, has raised $2 million venture investment from Vertex Ventures. The venture offers a SaaS solution that employs machine learning and data analysis to understand potential loan applicants, ranging from small scale to large scale loans.

Turnkey Lender has previously received seed funding from SMRK VC Fund. The initial development for the company was done in the Ukraine, where it has its roots. It is currently headquartered in Singapore, where the team believes that can have greater flexibility in approaching the different financial needs of their international clients.

Investment proceeds will be used to engage in expanding business operations across the region, product development and talent acquisition. The company told DEALSTREETASIA that the primary growth markets it if focusing on are Indonesia, Philippines and Thailand.

Bank Mandiri invests in cashless payment startup (Nikkei Asian Review), Rated: A

The venture capital unit of Indonesia’s largest lender by assets, Bank Mandiri, on Wednesday said it is leading a $2 million funding round for local financial technology startup Cashlez, which claims to offer a portable, more user-friendly alternative to electronic data capture machines.

Cashlez’s “mobile point of sales” system runs on a slim card-reader device operated with a smartphone application.

Canada

John D. Orr, Senior Banker and Investor, Joins FutureVault as Chief Executive Officer and a Significant Investor (PR Newswire), Rated: A

FutureVault, a personal and business information management company, has named banking executive, lawyer, entrepreneur and investment professional John D. Orr as Chief Executive Officer. In addition to joining the management team, Mr. Orr has made a significant personal investment in the Company for a material ownership position.

Launched commercially in North America in late 2016 after two years of development, FutureVault has created an advanced cloud-based information management platform with patents pending. In an increasingly digital world, characterized by volume, complexity and risk, FutureVault’s secure platform provides both individuals and businesses with the tools and intelligence to select, retain and optimize all their information. The platform represents a new category: an intelligent, secure, encrypted, auditable repository for all the information in one’s life or business. FutureVault’s product suite and feature set accommodate a broad range of customer information management needs, from a relatively straightforward individual’s requirements to those of a multi-jurisdictional business or a large family office.

Authors:

George Popescu
Allen Taylor