Thursday October 17 2019, Weekly News Digest

LendingClub

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

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

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United States

United Kingdom

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News Summary

United States

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

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

Preliminary Ratings Assigned: Marlette Funding Trust 2019-4

Class

Preliminary Rating

Initial Class Principal

A

AA (sf)

$260,298,000

B

A (sf)

$30,117,000

C

BBB- (sf)

$35,854,000

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

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

Earnings & Valuation

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

Profitability

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

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

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

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

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

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

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

Source: Lend Academy
Source: Lend Academy

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

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

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

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

Lendio has provided over 10,000 Kiva microloans through its

Source: Kiva

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

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

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

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

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

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

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

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

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

Fewer branches, more online

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Seeking Alpha

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

European Union

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

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

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

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

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

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

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

Source: sifted
Source: sifted

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

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

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

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

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

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

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

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

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

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

Klarna
Founded 2005 — Stockholm, Sweden — Unicorn

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

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

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

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

Greensill
Founded 2011 — London, UK — Unicorn

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

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

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

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

International

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

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

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

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

India

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

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

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

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

Asia

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

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

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

MENA

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

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

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

Canada

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

Authors:

George Popescu
Allen Taylor

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

Thursday January 24 2019, Weekly News Digest

millennials loan money

News Comments Today’s main news: Funding Circle, Stripe partner on small business expansion. Goldman, Citi drop Chinese P2P lenders. RateSetter attracts 75K investors. MarketInvoice gets 56M GBP in equity, debt funding. Hexindai shares credit data with Baihang Credit. Today’s main analysis: PeerIQ on bank earnings. Today’s thought-provoking articles: The link between marketplace lending and personal bankruptcy. 10 best places to […]

The post Thursday January 24 2019, Weekly News Digest appeared first on Lending Times.

millennials loan money

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Goldman, Citi Drop Chinese Peer-to-Peer Lenders After Crackdown (Bloomberg), Rated: AAA

First came a sweeping government crackdown and a surge in defaults and failures at thousands of China’s peer-to-peer lenders. Now, in another troubling sign for the industry, some of the biggest investment banks have stopped taking them public.

Wall Street firms including Goldman Sachs Group Inc. and Citigroup Inc. walked away from U.S. initial public offerings of Chinese P2P lenders in recent months, people with knowledge of the matter said. Their concerns mainly stemmed from the timing of the deals, with an uncertain outlook for P2P companies and a slumping market knocking down valuations. In each case, the businesses went ahead with their offerings after finding new underwriters.

Marketplace Lending & Personal Bankruptcy: Cause and Effect (Lend Academy), Rated: AAA

A national wave of personal bankruptcies that began in 2008 reached a peak in the year ending September 2010, when nearly 1.6 million bankruptcies were filed.

Filings fell by 1.8 percent for the 12-month period ending March 31, 2018, compared with the year ending March 31, 2017. The data continues a national trend of declining bankruptcy filings since 2010-2011.

An interesting white paper (The Real Effects of Financial Technology: Marketplace Lending and Personal Bankruptcy) co-authored by Dr. Piotr Danisewicz, University of Bristol and Ilaf Elard, Assistant Professor of Finance at Shanghai University of International Business and Economics was released last summer.

Among the many additional conclusions Danisewicz and Elard reach in the white paper are:

  • The Madden win triggered Lending Club and Prosper, the two largest U.S. marketplace lenders, to reduce lending in the states affected by the verdict.
  • The co-authors attribute the increase in the incidence of personal bankruptcy following Madden to the reduction in marketplace lending. This hypothesis is supported by a number of further results.
  • The consequences of Madden are limited to the enforceability of marketplace loans and suggest that the increase in bankruptcy rates following Madden arises predominantly from changes in marketplace lending.
  • Danisewicz and Elard also rule out that the rise in bankruptcy following the verdict could be the result of an increase in defaults by marketplace borrowers in the affected states. This may occur if marketplace borrowers are over-indebted and default after being unable to obtain additional marketplace loans in the affected states.

Strong Bank Earnings (PeerIQ), Rated: AAA

Banks had a rough quarter for trading revenues. FICC revenues at MS dropped by 30% YoY and by 18% YoY at GSBank of America’s 15% YoY drop in trading revenues was offset by a 10% increase in consumer banking revenuesRevenues at Wells Fargo dropped by 5% YoY driven by lower consumer loan balances. WFC faces a regulatory asset cap until the end of 2019 which is hampering loan growth. JPM was the only bank where the provision for credit losses increased, driven by a reserve build for credit cards due to loan growth.

Source: PeerIQ

10 Best Places to Pay Down Debt (LendingTree), Rated: AAA

Americans’ debt balances continued climbing in 2018, with total consumer debt tracking to top $4 trillion by the end of that year. With balances climbing high, many borrowers will want to use the new year to take their debt down a peg. For those who do so, prioritizing paying off debt can bring major rewards both in the near and long distance future.

86 Million Americans Fear Maxing Out Plastic on Large Purchases (WalletHub), Rated: AAA

The holiday shopping season is over now, and many Americans are seeing the impact on their credit card bills and bank statements. During the holidays, people often make a lot of large purchases, and sometimes max out their cards in order to do so. In a nationally representative survey conducted by WalletHub, 34 percent of respondents say they worry about maxing out their card with a large purchase.

Source: WalletHub

Credit Line Increases Drive Consumer Engagement and are Most Likely to Happen at the Beginning of the Year (AP News), Rated: A

According to a new study from TransUnion (NYSE: TRU), consumers are 50% more likely to receive a credit line increase (CLI) between the months of January and May. However, credit line decreases (CLD) occur at twice the normal rate during the month of January.

Lendio Provides More Than 5,000 Kiva Loans to Support Women-Owned Businesses Around the World (Lendio), Rated: A

Lendio announced today that through continued efforts to support business growth around the world, the Lendio Gives program has funded more than 5,000 Kiva microloans. To-date, Lendio’s employee contribution and employer matching program has provided more than $130,000 in loans to underserved business owners in 78 countries.

Lendio Franchising Named No. 1 Financial Services Brand in Entrepreneur’s Franchise 500 (Lendio), Rated: B

Lendio Franchising recently ranked in Entrepreneur magazine’s Franchise 500, the world’s first, best and most comprehensive franchise ranking. Named #1 in the Business Financial Services category for the second year running, Lendio Franchising was recognized for its outstanding performance in areas including unit growth, financial strength and stability, and brand power. Placement in the Franchise 500 is a highly sought-after honor in the franchise industry; Entrepreneur received more than 1,000 applications this year, making it one of the company’s most competitive rankings ever.

Commercial Real Estate Finance Platform CrediFi Milestone: Total Capital Raised Has Surpassed $ 29 Million (Crowdfund Insider), Rated: A

CrediFi, a fintech and commercial real estate finance platform, on Wednesday it has raised an additional $6 million in funding. This funding comes on the heels of the $13 million previously raised in Series B funding. The company reported that the total amount it has raised has surpassed $29 million.

Lending Express Celebrates $ 100M Lending Milestone & California’s Golden Opportunities (Crowdfund Insider), Rated: A

Lending Express, an Israeli tech company dedicated to creating a better world of funding for SMBs, has surpassed $100 million in financing facilitated between small and medium business owners and online lenders. Lending Express also obtained state permission to open for business in California.

Fundation Launches Digital Lending Capability with Banc of California for Small Business Customers (OAOA), Rated: A

Fundation announced that it has recently launched a digital lending solution in partnership with Banc of California, enabling the California-based bank to offer a new, streamlined end-to-end solution for small businesses seeking a business loan or line of credit. The solution enables small businesses to apply for loans and lines of credit through a simple online application at Bancofcal.com and receive funds in a little as one business day.

Entrepreneurs Take Note: Success Is Within Reach (WWD), Rated: A

With insight from 600 “thriving” U.S. small business owners, a study by global financial services platform Kabbage, Inc. reveals one-third of small businesses started with less than $5,000 in start-up capital.

According to the report, particularly scrappy or thrifty entrepreneurs may want to consider starting a business in one of the three categories costing $5,000 or less “during the first six months.” Accounting; at 45 percent, online retail; at 44 percent and construction and landscaping; at 39 percent represented the least amount of start-up capital, or lowest entry barriers.

Officials caution federal workers of predatory online payday lenders during federal shutdown (News 8), Rated: A

Attorney General William Tong and Department of Banking Commissioner Jorge Perez cautioned federal workers on Wednesday to avoid predatory online payday lenders who may seek to exploit the struggling workers during the partial government shutdown.

Most People Would Not Loan Their Loved Ones Money to Start a Business (Fundera), Rated: A

The time and effort it takes to raise the funds for your startup can quickly get out of hand, which may be the reason that 29% of new small businesses run out of cash and fail.

In fact, 38% of startups are funded by friends and family members.

We surveyed 1,000 Americans on whether or not they would loan a friend or family member money to start their business and found that 82% of people would not loan a friend or family member money to start a business.

Source: Fundera

No Pay Stub? No Problem. Unconventional Mortgages Make a Comeback (WSJ), Rated: A

Lenders issued $34 billion of these unconventional mortgages in the first three quarters of 2018, a 24% increase from the same period a year earlier, according to Inside Mortgage Finance, an industry research group. While that makes up less than 3% of the $1.3 trillion of mortgage originations over that period, the growth is notable because it came as traditional home loans declined. Those originations fell 1.2% over the same period and were on track for a second down year in 2018.

North Capital Launches REITless Impact Income Strategies (PR Newswire), Rated: A

North Capital Investment Technology Inc. recently launched a new investment vehicle, REITless Impact Income Strategies (REITless), focused on lending and strategic debt investments to primarily single- and multi-family real estate development and redevelopment projects that aim to produce positive social impact in communities nationwide. The impact initiatives targeted by the company are energy efficiency, employment generation, affordable housing, and green-housing improvements that promote environmental sustainability. REITless is managed by North Capital Inc., an SEC-registered investment advisor (RIA).

BFS Capital Achieves $ 2 Billion in Financing (BusinessWire), Rated: A

BFS Capital, a leading small business financing platform, today announced it has now issued more than $2 billion in financing to over 22,000 small businesses across the United States, Canada and, through its United Kingdom subsidiary, Boost Capital.

KeyBank To Acquire Online Lending Business Laurel Road (PR Newswire), Rated: A

KeyBank National Association today announced that KeyBank and Laurel Road Bank have entered into a definitive agreement for the acquisition by Key of Laurel Road’s digital lending business; Laurel Road’s three bank branches located in southeast Connecticut are not part of this transaction. Through the acquisition, Key will enhance its digital capabilities with state-of-the-art, customer-centric technology and will leverage Laurel Road’s proven ability to attract and serve professional millennial clients.

GROUNDFLOOR Launches Real Estate Investments Specific To Georgia Residents During Federal Shutdown (PR Newswire), Rated: A

Today, Atlanta-based GROUNDFLOOR is launching new investment opportunities specific to Georgia residents. The crowdsourced real estate investing and lending platform regularly offers investment opportunities to accredited and non-accredited investors throughout the country. Due to the federal shutdown and furloughs at the Securities and Exchange Commission, GROUNDFLOOR is now resurfacing state-by-state securities to continue to offer investors the opportunity to invest on a fractional, self-directed basis in Georgia real estate.

Is community banks’ loan growth too much of a good thing? (American Banker), Rated: A

Total loans at publicly traded banks with assets of less than $20 billion rose 9.2% in the fourth quarter from a year earlier, based on Jan. 18 data compiled by FIG Partners. Publicly traded banks above that threshold have reported a 2.7% increase in loans.

Breakout Capital Finance expands Board of Directors, appoints Neil Gurvitch and Firoze Lafeer (PR Newswire), Rated: B

Breakout Capital Finance, a leading fintech innovator, announces the expansion of its Board of Directors by appointing Firoze Lafeer, company CTO, and Neil Gurvitch as an independent director.  In making the appointments, Carl Fairbank, Breakout’s Founder and CEO, said, “We continue to see rapid growth in our lending- and technology-focused endeavors.  Adding more seasoned leadership continues our expansion and growth plans.”

Samsung NEXT, NBKC Executives and Ellie Mae Veteran Join ProPair Advisory Board (BusinessWire), Rated: B

ProPair, a Silicon Valley innovator using machine learning and predictive decision-making to change how mortgage lenders are assigning and prioritizing their leads, today announced the additions of Leo Chang, Chad Cronk and Nick Hedges to its advisory board.

United Kingdom

RateSetter attracts over 75,000 investors (Bridging and Commercial), Rated: AAA

RateSetter has announced that over 75,000 investors have put money into its platform.

Since its launch in 2010, investors have earned £120m through the P2P lending platform at an average interest rate of 4.4% per year.

RateSetter currently has £830m of investment under management, including £170m invested through its Isa.

MarketInvoice secures £56m equity and debt funding (MarketInvoice), Rated: AAA

Fintech business MarketInvoice today announced it has raised £26m in new equity funding. This Series-B funding round was led by Barclays and Fintech fund, Santander InnoVentures with significant participation from European venture fund Northzone, an existing investor in the company. Technology credit fund Viola Credit, who also participated in the equity round, will provide a debt facility of up to £30m. The facility will help scale the MarketInvoice business loans offering that sits alongside their core invoice finance solutions.

Goldman Sachs’ Marcus platform reveals AUM (AltFi), Rated: A

The US investment giant said its digital bank attracted has more than £5bn in UK savings just three months after its launch.

The US investment giant debuted its online lending and deposit platform, Marcus, in the UK at the end of last summer, and pulled in 100,000 customers and £5.4bn in the final quarter of the year.

Metro Bank shares crash after loans blunder revealed (The Guardian), Rated: A

Metro Bank has revealed a major blunder in how it classifies its loan book, an admission that drove its share price down by nearly 40% on Wednesday, wiping £800m off the value of the company.

The bank, which has been opening new branches as established rivals cut back, revealed that hundreds of millions of pounds of commercial property loans and loans to commercial buy-to-let operators had been wrongly classified in risk terms, and should have been among its “risk-weighted assets” (RWAs).

Glenhawk grows team with LendInvest hire following strong start to 2019 (Property Funds World), Rated: B

Having originated GBP28.4 million of potential loans since the start of the year, and completed on just over GBP4 million, early indications are that 2019 will see accelerated demand for Glenhawk’s fast and flexible short term property finance. Wareham joins Glenhawk’s 20-strong team of real estate professionals, supporting an increasingly diverse range of borrowers across the South of England and Midlands.

China

Hexindai Begins Sharing Credit Data with Baihang Credit (PR Newswire), Rated: AAA

Hexindai Inc. (NASDAQ: HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, announced today that it has connected its systems and begun sharing credit data with Baihang Zhengxin (“Baihang Credit”).

China crackdown aims to push peer-to-peer lenders out of the industry (Australian Financial Review), Rated: A

Chinese authorities have further tightened controls on the peer-to-peer lending industry, aiming to clear out as many P2P platforms as possible, according to an official document seen by Caixin.

Microlenders need to obtain licences from the regulators and meet certain minimal capital requirements. For instance, a microlender in Shanghai needs to register its business with more than 200 million yuan ($41.2 million). P2P platforms usually don’t have to meet such requirements.

Chinese investors try to storm company after P2P lender failure (Business Times), Rated: A

In the latest sign of turmoil in China’s once booming peer-to-peer (P2P) lending sector, around 80 investors in failed lender Xinhehui protested outside the Hangzhou headquarters of a related company on Tuesday, demanding a US$330 million bailout.

Mrs Xue, who would only provide a surname for fear of retaliation, said she arrived at 8am with around 80 other investors from Zhejiang and neighboring provinces, demanding payment for 2.26 billion yuan (S$452 million) of products that Xinhehui had sold, including 860 million yuan (S$172 million) worth that were due for repayment on Jan 6.

Xi Tells Cadres to ‘Prevent and Control’ Risks as China’s Economic Woes Mount (The Epoch Times), Rated: B

At a high-level meeting of senior Chinese Communist Party officials held in Beijing, Chinese leader Xi Jinping gave an opening speech on Jan. 21 that hinted at the severity of China’s economic downturn.

European Union

Fellow Finance Launches Peer to Peer Lending in Denmark (Crowdfund Insider), Rated: AAA

Finland based peer to peer lender Fellow Finance is now operating in Denmark. The company says it will offer Danish consumers access to credit while Fellow Finance investors will be able to fund Danish loans. Currently, Fellow Finance provides consumer loans in Finland, Germany, Poland, and Sweden.

Note to Irish and US parents: college not the only path for your cherished offspring (Irish Central), Rated: A

According to the student loan marketplace www.lendEDU.com, the average debt per borrower at a public college is $26,872. This rises to $31,710 if you’re inclined to a private college experience. For graduate school students – whose parents have by now presumably said, “Time to pay your own way, sunshine” – the average debt is a staggering $57,600.

International

Funding Circle partners with Stripe to help small businesses expand (PR Newswire), Rated: AAA

Funding Circle, the global small business loans platform, today announced that it has joined the Stripe Partner Program, providing businesses using Stripe with access to affordable business financing through Funding Circle. As a verified extension partner, Funding Circle now enables Stripe users to import their data directly and securely to apply for a business loan up to $500,000 — making the process faster and easier so they can get back to running their businesses.

Boost Capital ups firepower as US parent hits $ 2bn lending milestone (AltFi), Rated: A

Small business lender Boost Capital has refinanced its credit facility lifting its funding capacity to $60m, as its US parent targets European growth.

The Chelmsford-based platform, which provides business loans and merchant cash advances, said it upped its credit firepower from $40m after signing a deal with New York-based investment firm Atalaya Capital Management.

India

Matrix Partners invests in P2P lending platform LiquiLoans (Techstory), Rated: AAA

Mumbai based peer to peer lending platform LiquiLoans, one of the few players to have secured a P2P license, has now secured an undisclosed amount of funding from some of the existing investor that is Matrix partners India.

Fintech startup floated by ex-Lendingkart execs MoneyOnClick raises funding (VC Circle), Rated: A

Two former executives from online lending platform Lendingkart have quit the firm to set up a new venture in the alternative lending space, catering to consumers.

According to their respective LinkedIn accounts, the startup, which has been operational since October 2018, has already raised $2.25 million (Rs 16.02 crore at current exchange rates) as part of its first institutional funding round from undisclosed investors.

Women, non-metros topping up on credit, says BankBazaar survey (MoneyControl), Rated: A

Non-metro cities have emerged as the bigger market for unsecured credit in terms of volume than the metros in 2018, according to BankBazaar Moneymood 2019 report.

The average personal loan ticket size in non-metros is Rs 2.80 lakh compared to Rs 2.55 lakh in metros. The unsecured credit portfolio includes personal loans and credit cards which are used more for consumption activities than secured loans.

Online rental marketplace Sacorooms Rises fresh funding Pre-Series A (Times of India), Rated: A

Sacorooms, a start-up that is building co-living spaces, has closed a pre-Series A round of funding for an undisclosed amount from Mr. Broadway. The investment comes after a strategic round led by Incubate Fund and a group of investors from the real estate industry this year.

Asia

OJK Zero Down Payment Policy Drives Multifinance Growth (Tempo.co), Rated: AAA

The recent policy of zero percent down payment for vehicle credit issued by the Financial Services Authority (OJK) believed to be able to drive the performance of the multifinance industry. Businesses are confident that multi-finance companies will perform better with the new regulation.

Chairman of the Indonesian Financing Company Association (APPI) Soewandi Wiranto, said that the business expansion stated in the new regulation can increase financing industry growth. Based on APPI’s calculation, industrial asset growth for 2019 can reach up to 9 percent while the growth rate of receivables is predicted to be in a range of 6 to 7 percent.

Authors:

George Popescu
Allen Taylor

The post Thursday January 24 2019, Weekly News Digest appeared first on Lending Times.

Wednesday August 22 2018, Daily News Digest

Elevate Credit

News Comments Today’s main news: Elevate Credit expected to announce $203.49M in sales. Ant Financial delays IPO again. SocietyOne getting close to $500M in total lending, six years in. ClearScore to offer credit scores in India. Capital Float buys Sequoia and Walnut. Today’s main analysis: 10 years after financial crisis, credit market on upward curve. Today’s thought-provoking articles: New […]

Elevate Credit

News Comments

United States

China

International

India

Other

News Summary

United States

Brokerages Anticipate Elevate Credit Inc (ELVT) Will Announce Quarterly Sales of $ 203.49 Million (Baseball Daily Digest) Rated: AAA

Equities research analysts forecast that Elevate Credit Inc (NYSE:ELVT) will post $203.49 million in sales for the current fiscal quarter, Zacks reports. Two analysts have issued estimates for Elevate Credit’s earnings, with estimates ranging from $201.00 million to $205.97 million. Elevate Credit reported sales of $172.85 million during the same quarter last year, which indicates a positive year-over-year growth rate of 17.7%. The firm is expected to report its next quarterly earnings report on Monday, October 29th.

According to Zacks, analysts expect that Elevate Credit will report full-year sales of $803.23 million for the current financial year, with estimates ranging from $801.00 million to $805.45 million. For the next financial year, analysts expect that the company will report sales of $927.09 million per share, with estimates ranging from $926.97 million to $927.20 million. Zacks’ sales calculations are a mean average based on a survey of research firms that follow Elevate Credit.

Financial Crisis – 10 Years Later: Consumer Credit Market on an Upward Curve (Nasdaq) Rated: AAA

Ten years after the biggest financial crisis to hit the United States since the Great Depression, much has changed in the consumer credit marketplace. Serious delinquency rates have recovered since that period, and the credit quality of consumers has broadly improved. Yet the crisis has had a profound effect on consumer access to credit and the relationship they have with it.

TransUnion’s (NYSE:TRU) just-released Q2 2018 Industry Insights Report allows for comparisons between Americans’ credit preferences today versus 2008, specifically in the auto finance, credit card, mortgage and unsecured personal loan markets.

Source: TransUnion

Lawmaker Questions FinTech Industry Over Lending Practices (Govtech) Rated:A

Rep. Emanuel Cleaver (D-Mo.) released a report Friday detailing the lending practices of some prominent fintech companies, finding that some companies could be discriminating against minorities and calling for more transparency from the fintech sector.

Fintech companies are somewhat controversial because many engage in traditional banking practices, and some consumers and regulators are calling for them to be regulated like traditional banks.

Small banks need big data to maintain customer service edge (American Banker) Rated: A

Big data isn’t just for big banks.

The modern banking customer wants advanced online and mobile banking options, and delivering such services requires even the smallest community bank to get a handle on customer data, said Corey LeBlanc, chief technology officer and vice president at Origin Bank.

Blockchain Meets REIT – A New Era in Real Estate Investing (Market Insider) Rated: A

Building Block, Inc. announced today it is the first North American REIT (Real Estate Investment Trust) to embrace the emerging efficiencies of blockchain technology and provide a new way to invest in one of the world’s most well-known and trusted assets, real estate.   Blockchain technology will enable Building Block REIT to virtually eliminate friction in REIT shareholder communication by allowing direct dividend disbursement, secure user voting, and smart contract functions that execute automatically when pre-set parameters are met.

Building Block REIT plans to raise funds in the form of a digital initial public offering (Digital IPO) accepting payments via U.S. Dollars or fractional Ethereum cryptocurrency.  Investors worldwide will be able to purchase shares in Building Block REIT on SEC compliant alternative trading systems (ATS) or peer-to-peer exchanges with whitelisted parties to invest in US commercial office, multi-family and mixed-use real estate.

JPMorgan launching Roar platform for crowdsourced data (Business Insider) Rated: A

JPMorgan’s corporate and investment bank is best known for advising businesses on billion-dollar acquisitions, helping private unicorns tap into the public markets, and managing the cash of Fortune 500 companies.

But now it is quietly working on a new platform that would go far beyond anything the firm has previously done, using crowdsourcing to accumulate massive amounts of data intended to one day help its clients make complex decisions about how to run their businesses, according to people familiar with the project.

The platform, called Roar by JPMorgan, would store sensitive private data, such as hospital records or satellite imagery, that’s not in the public domain. Typically, this type of information is exchanged between firms on a bilateral arrangement so it is not improperly used. But Roar would allow clients to tap into this data, which they could then use in a secure fashion to make forecasts and gain business insights.

New Report Shows Identity Verification a Priority for eCommerce and Online Lending Businesses (Global News) Rated: A

A new report from Whitepages Pro shows that an overwhelming majority of North American companies in ecommerce and financial services surveyed consider identity verification to be a top business priority but many still don’t believe they do it well or have all the data and tools they need to be successful. For the report, “The State of Identity Verification Maturity in North America,” businesses were asked, among other things, to rank themselves on a 4-stage scale of identity verification maturity for how they use identity data to combat fraud and improve the customer experience.

Among the report’s key findings:

  • Driven by the belief that fraud attempts are increasing in frequency and sophistication, identity verification is a priority for most organizations (93 percent). While they vary in the degree to which they use advanced techniques, most organizations want to improve their identity verification methods and outcomes. Just 2 percent believe they are completely successful at identity verification.
  • Organizations want access to more data points (just 13 percent say they have all the data they need) and see data linkages (the relationships between data elements) as a way to improve their identity verification processes. While access to traditional data (like a street address) is common, many still don’t have or use digital data (like an IP address). Most of the survey respondents believe linking data reduces fraud with 77 percent believing it increases confidence in a customer’s identity.
  • Organizations want more and improved identity verification automation. However they often rely on in-house (such as historical data and white/black lists) that make it difficult to expand the use of automation, resulting in an over reliance on costly and time consuming manual reviews. A large majority (71 percent) believe machine learning can play a role in reducing manual reviews and making identity verification more effective.

Bank of the West exec bolts for startup, sees chance ‘to redefine retail banking’ (American Banker) Rated: A

Thibault Fulconis, who until recently was chief operating officer of Bank of the West, has joined the fintech digital banking startup Varo Money as its chief financial officer.

Varo Money is a mobile-first challenger bank that aims to help Americans achieve financial health. It is in the same league as Chime, Digit, Moven, MoneyLion, Qapital and N26.

White Oak Healthcare Finance Closes $ 40 Million Financing for LifeCare Holdings, Inc. (Business Wire) Rated: A

White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as lead lender and administrative agent on the funding of a $40 million asset based senior credit facility for LifeCare Holdings, Inc. (“LifeCare”). The funds were primarily used to refinance existing indebtedness. White Oak previously announced the financing of LifeCare Home Health LLC, the home health entity owned by LifeCare.

TradeStation Launches New Fully Paid Lending Program (GlobeNewswire), Rated: A

TradeStation, a Monex Group company and award-winning online broker-dealer and futures commission merchant, today announced the launch of its Fully Paid Lending Program. This program allows qualified equities account holders the opportunity to earn interest income on lendable securities in their accounts.

Under the Fully Paid Lending Program, TradeStation identifies stocks in qualified accounts that are eligible for lending. Based on market demand, some or all of a qualified client’s fully paid positions or excess-margin securities may be lent out to other financial institutions to satisfy their customers’ position requirements. While their stocks are on loan, clients automatically receive 50% of the net proceeds earned by TradeStation for lending out the shares, which is accrued daily and automatically posted monthly to their accounts. Daily income ceases to accrue when the client sells a lendable stock or the stock is no longer on loan.

US wakes up to SME cybersecurity needs (Fintech Futures) Rated: B

US President Donald Trump has signed the National Institute of Standards and Technology (NIST) Small Business Cybersecurity Act, a bill which will provide a set of resources for small businesses to best protect their digital assets from cybersecurity threats.

United Kingdom

Private credit offers an escape from miserly bond yields (Citywire) Rated: AAA

For reasons that are quite clear if you follow my writings on a regular basis, equities and bonds will most likely deliver disappointing returns for many years to come.

My central forecast is an annual average inflation-adjusted return of 0-2% on a global portfolio consisting of 40% bonds and 60% equities between now and 2050.

The good news next.  Fortunately, there are many things you can do to improve on those lacklustre numbers. Those returns are for the lazy investor; someone who invests passively.

China

Ant Financial IPO plans pushed back again (Financial Times) Rated: AAA

A blockbuster listing of Ant Financial, the fast-growing electronic payment affiliate of China’s leading tech group Alibaba, has again been delayed as it continues to burn through cash and come under pressure from Beijing’s crackdown on non-traditional financial institutions.

Ant was valued at $150bn in its last private fundraising in June, a round that bankers said paved the way for an initial public offering as early as this year.

Moody’s: China’s new measures on P2P lending are credit positive (ECNS) Rated: AAA

The global credit rating agency Moody’s called China’s newly-issued regulations on peer-to-peer lending platforms are “credit positive”, because they will strengthen protections to individual lenders and prevent risk spilling over to the broader financial system.

Moody’s commentary came after Chinese regulators announced 10 measures to address risks related to P2P lending platforms on August 12. The P2P platforms enable individuals to lend directly to borrowers through the Internet.

The new regulations clarified responsibilities of P2P platforms and their shareholders, stipulated conditions for orderly liquidation of failed platforms, outlined penalties for borrowers that escape their debt obligations and prohibited registration of new platforms.

Next Step to Regulating P2P Lending Platforms — Figuring Out Who Owns Them (Caixin Global) Rated: A

Months into the crisis in China’s online lending industry, regulators want to know who actually owns the country’s peer-to-peer (P2P) lending platforms.

The National Internet Finance Association of China (NIFA) issued a notice on Monday designed to help it keep tabs on key stakeholders in China’s online P2P lending platforms as financial and legal difficulties continue to engulf the business.

The effort to bring greater clarity to the workings of P2P platforms comes after hundreds of online platforms have encountered financial and legal troubles in the last few months. In July, at least 165 P2P platforms had difficulties meeting cash-withdrawal demands, saw their owners abscond with investor funds, or were investigated by police, according to a report by internet lending research firm Wangdaizhijia. The number was nearly triple that in June, Wangdaizhijia said.

In-Depth: Police Launch Global Hunt for ‘Solar King’ Caught Up in P2P Bust (Caixin Global) Rated: AAA

Peng Xiaofeng was once China’s youngest billionaire and a rising star in the solar industry. But the founder of now-bankrupt LDK Solar has been put on China’s most-wanted list, hunted by law enforcement agencies for illegal fund-raising by his peer-to-peer (P2P) lending platform Solarbao.com.

Police in the city of Suzhou, where Solarbao.com is registered, want Interpol to issue a Red Notice against 43-year-old Peng, who is accused of swindling more than 5,000 investors and leaving a trail of debt amounting to 220 million yuan ($32.1 million). They have also branded the platform, a subsidiary of Nasdaq-listed SPI Energy Co. Ltd., a fraud.

HuaAn Finds Itself Target of Investor Ire After P2P Company Accused of Fraud (Caixin Global) Rated: A

The Shanghai office of fund manager HuaAn Future Asset Management Co. Ltd.was surrounded on Monday by throngs of angry investors who blame the company for what they perceive to be its role in an online-lending fraud. HuaAn denies any involvement.

Monday’s protest centered on P2P site PPMiao.com, which was accused of illegal fundraising by police in the eastern city of Hangzhou, where PPMiao.com operator Guangxi PPMiao Internet Technology Co. Ltd. is registered. HuaAn held a 37.5% stake on behalf of an asset management plan in PPMiao.com’s former operator, Hangzhou Fuqian Network Technology Co. Ltd., as of June 30, making HuaAn the target of investor ire when PPMiao.com’s financial problems surfaced.

International

Many countries don’t use credit scores like the US — here’s how they determine your worth (Business Insider) Rated: AAA

In the US, a good credit score can feel like a key determinant of success. It defines how good an interest rate you can get on a car loan or mortgage, the quality of credit card you can get approved for, or if you’ll get approved for any credit at all.

The better your score, the better the perks. A bad score can become a black mark that leads to missing out on the home you want (credit checks are a common aspect of apartment applications), higher car insurance rates, or even difficulty getting a cell phone, according to Nerdwallet.

But as monolithic as the credit score seems, many countries in the world handle credit very differently — with many having no credit score system at all.

Blockchain Can Help Peer-To-Peer Car Lending Schemes Gain Traction (Market News) Rated: A

Blockchain technology can help car-sharing companies to track a person using the car any time. According to industry analysts, the car sharing economy is expected to hit $335 billion by the year 2025.

The car sharing idea has been gaining a lot of interest among car drivers over the recent years. According to estimates by Global Market Insight, the peer-to-peer car sharing sector will amount to $11 billion. The growth has largely been attributed to raising cost of owning a car.

The biggest challenge with the Peer-to-peer lending system is trust. The car owner has to have total trust in the person hiring the car. Additionally, the car owner has to be sure that the hirer has enough money to cover the period the car is hired. The owner of the vehicle would also like to track where the car is as well as the condition in which it is being driven. On the side of the hirer, they would love to know if they are hiring the car from the original owner and that the data exchanged between the two parties is secure.

Australia

SocietyOne Celebrates Sixth Anniversary; Total Lending Now Approaching $ 500 Million (Crowdfund Insider) Rated: AAA

Australia-based marketplace lender SocietyOne announced celebrated its sixth anniversary of operations as total lending since inception approaches $500 million.

SocietyOne also reported it has more than 20,000 customers and since the beginning of 2016, total lending has grown nearly 6 times and the lender’s loan book now totals over $220 million, up from $41 million at the start of 2016.

India

UK’s fintech startup ClearScore set to offer credit scores in India (Economic Times) Rated: AAA

UK-headquartered fintech startup ClearScore is all set to start its business in India offering credit scores to Indian consumers in partnership with Experian, free of cost, to improve the awareness levels of the consumers regarding credit. India is their second international market after the company started operations in South Africa last year.

ClearScore will be available on Google Play Store and will provide details of the credit score, giving alerts about changes in the score and provide details about how consumers can improve the score.

Capital Float buys Sequoia & SAIF-backed Walnut for $ 30 mn (VC Circle) Rated: AAA

Bengaluru-based digital lending platform Capital Float has acquired personal finance management app-maker Walnut for $30 million (Rs 209 crore) in a cash and stock deal, a company statement said. Both the companies count Sequoia Capital and SAIF Partners as common venture capital investors.

Walnut allows users to track spends, check on credit and bank balance, bill payments and split expenses within a group. In July 2017, it launched a small ticket credit line for its users called Walnut Prime based on user data and consumer behaviour. The platform has so far disbursed Rs 100 crore in consumer loans.

OfBusiness Raises INR 200 Crore in Series C Financing (FinSMEs) Rated: A

OfBusiness, a Gurgaon, India – based technology enabled SME financing platform, raised INR 200 crore (approx $29m) in Series C financing.

The round was led by Creation Investments and Falcon Edge with participation from existing investors Matrix Partners India and Zodius Capital. With this new round of funding, the company has raised a total of INR 500 crore of equity and debt funding to date. It has also raised debt lines from Kotak, Tata Capital, RBL Bank and Northern Arc amongst other lending partners.

The capital will be used for continued rapid growth and model scaling.

Five Star Business Finance Raises USD$ 100M in Funding (FinSMEs) Rated: A

Five Star Business Finance Limited, a Chennai, India–based fully-secured small business financing company focused on South India, raises USD$100M in funding.

The round was led by alternative asset firm TPG, with participation from existing investors Norwest Venture Partners, an investment fund managed by Morgan Stanley, and Sequoia Capital. The company’s first investor, Matrix Partners India, continues to stay invested in the company.

Led by D. Lakshmipathy, Chairman and Managing Director, Five Star is a non-bank finance company providing loans to nearly 40,000 customers.

P2P Online Lending Startup Finzy Completes $ 2.3 Mn Pre-Series A Fund Raise (Indian Web) Rated: A

Bangalore-based peer to peer (P2P) lending platform Finzy on Monday announced raising funds worth USD 2.3 million in Pre-Series A round, including USD 1.3 million raised in the first tranche in March 2018.

This funding round has been funded by senior professionals from BFSI industry and successful entrepreneurs. The startup plans to use the freshly raised capital for geographical expansion, technology investment and stronger distribution networks.

Founded in 2016, by Abhinandan Sangam, Amit More and Vishwas Dixit, Finzy is a premier P2P lending solution in India that connect borrowers with investors and make the entire process simple and easy so that one can get a loan in as little as 48 hours.

Five things you should know before lending on P2P platform (Economic Times) Rated: A

Don’t let greed cloud your judgment. If you are in a tearing hurry to pocket double-digit returns, you are likely to overlook many warnings signs. That is why it is always better to start with a small amount, learn the ropes, before going for the kill.

Different platforms have different ticket size for lending. With companies like Faircent offering as low as Rs 750 per loan. The ROI would vary as per the borrower profile and loan tenure. The total amount invested by a lender across all P2P-NBFCs is capped at Rs 10 lakh, as per the existing RBI norms.

The RBI came out with regulations for P2P companies in October. There are around 30 online P2P companies in India, of which only eight have received a certificate of registration (CoR) from the RBI to carry out P2P lending activities.

Asia

Singapore police recover S$ 27 million linked to China Ponzi scheme (Channel News Asia) Rated: AAA

Singapore police said on Tuesday (Aug 21) they have recovered more than S$27 million linked to one of the biggest Ponzi schemes in China, which saw 1.15 million investors cheated out of 38 billion yuan (S$7 billion).

Ezubao, once China’s biggest peer-to-peer lending platform, folded in 2016 after it turned out to be an online scam that concocted fake projects to attract investment and pocketed funds instead of passing them to borrowers to generate returns.

Latin American

Mexico’s new government wants fintech, banks to help financial inclusion (Channel News Asia) Rated: AAA

Mexico’s next government will look to fintech companies and large corporate banks to increase financial inclusion in the country, where only one-third of adults have a bank account, senior officials said on Tuesday.

Arturo Herrera, one of two future deputy finance ministers, said in an interview that the lack of financial inclusion was one of the biggest obstacles in the new government’s fight against poverty, inequality and slow economic growth.

Authors:

George Popescu
Allen Taylor

Bringing Net Lease Into the FinTech Age

net lease brokerage technology

Covering an estimated 1.3 million properties and aiming to help clients buy, sell, and trade real estate across the nation, Brokers+Engineers has emerged as the first technology-driven trading and brokerage platform for net lease real estate. Powered by artificial intelligence, data analytics, and innovative engineering, Brokers+Engineers offers Net Lease Investment Sales, Sale-Leasebacks, 1031 Exchange Advisory, […]

net lease brokerage technology

Covering an estimated 1.3 million properties and aiming to help clients buy, sell, and trade real estate across the nation, Brokers+Engineers has emerged as the first technology-driven trading and brokerage platform for net lease real estate.

Powered by artificial intelligence, data analytics, and innovative engineering, Brokers+Engineers offers Net Lease Investment Sales, Sale-Leasebacks, 1031 Exchange Advisory, and Research/Analytics services on its platform. A process that used to be cumbersome and fraught with manual inefficiencies is finally getting its day in the digital sun.

The Platform

The Brokers+Engineers platform has been successful in raising an estimated $750,000 from strategic partners. Presently, the firm has around 50 employees and seven brokers, which the founders are looking to increase to 20 by the end of 2019. B+E is particular about onboarding senior brokers only and empowering them with the right data and AI tools for growth. The company’s ethos lies in its people, and they focus on specializing in Net Lease and leveraging technology to deliver better solutions at scale.

The company also deals in complex 1031 exchange transactions where the seller needs to reinvest the proceeds into a new property to defer capital gains. Such deals are extremely management intensive and are usually executed by families that are looking to pass on their assets to younger generations. It handles transactions in all 50 states and has offices in three cities: San Francisco, New York, and Tampa. They are looking to expand to five cities by the end of this year.

B+E’s Dataset: Price-Regression Algorithm

The foundation of any business is data and the way it is organized. Recognizing this, B+E has the largest dataset in the net lease industry and leverages proprietary patent pending AI-powered price regression algorithms to bring better-priced deals to the market. The technology will is also used for establishing property values from year to year. The company uses a data-scrubbing technique to amalgamate data and clean it up before using the AI mechanism for sourcing deals.

Understanding the importance of municipal data in the development of proprietary tech, the platform also engages with Municipal Data Services to collect details about ownership and other property details to analyze through its artificial intelligence algorithms.

Delivering More Value at the Same Cost

Clients using the B+E platform are not charged additional market fees. They are charged a success fee depending on the sale of the net lease asset. If the platform fails to deliver its promise of sale, no fee is charged. This ensures the company is at parity with other players in the industry and there is no friction in onboarding clients.

Brokers+Engineers currently serves top tier REITs and real estate developers. Its roster of clients includes Stone Capital, WP Carey, and Sprint Financial. It typically deals with one-tenant properties, and though each transaction is different, the deals are much easier to negotiate if there is only one tenant involved. Transactions also involve hospitals, FedEx ground, retail and industrial properties, Amazon distribution centers, and office headquarters.

Blockchain and New Technology

Considering blockchain as a transformative option, the team at B+E is seriously evaluating distributed ledger alternatives. An innovation lab has been created to analyze how blockchain can help in storing transactions, memorializing deals, validating transactions, and interacting with other actors. B+E realizes that crypto is the future and is confident of its integration in the near future.

While transacting in Bitcoin is possible, the firm is wrestling with volatility management. Crytpocurrencies jump in value by as much as 20 percent on some days, so it is difficult to perfectly price deals and ensure fallback provisions if crypto prices go haywire. Therefore, Brokers+Engineers is treading lightly in this space.

The Founders

In 2017, CEO Camille Renshaw, along with Co-Founder Scott Scurich, launched Brokers+Engineers. They had worked with each other at Ten-X (a Google Capital company) and the Stan Johnson Company, both net lease brokerages. Brokers+Engineers is their third venture together.

Renshaw was the head of sales at Ten-X and Scurich was managing director. Renshaw founded the net lease division at Ten-X, which proved to be a great source of learning for both Renshaw and Scurich. However, it laid too much emphasis on deadlines. The zeal to bring the net lease brokerage industry into the modern era steered them to leave Ten-X and start B+E. Their goal is to facilitate easier, faster, and more intelligent transactions for all stakeholders.

Conclusion

The net lease industry will eventually have to adopt modern technology. Brokers+Engineers serves major players in the market and know they are waiting for the right product to incorporate. The clients are fundamentally excited to see a seamless platform which can enhance liquidity and boost transparency in the market.

Even though B+E has a significant market share, it is chasing its own tipping point towards domination. There is no runaway leader in the segment and the company wants to develop its platform as the go-to source for reliable data and premiere transaction support services. The company’s ability to leverage AI technology along with experiments in blockchain hold the key to long-term success.

Authors:

Written by Heena Dhir.

Friday April 27 2018, Daily News Digest

Canada investments

News Comments Today’s main news: Kabbage buys Orchard.Ascentium Capital issues $330M securitization.LendingTree reports record Q1 results.Funding Circle issues second MPL deal.Revolut raises $250M, achieves unicorn status.BBVA issues first blockchain loan from a global bank.IOU Financial releases 2017 results. Today’s main analysis: Canadian fintech funding declines 60 percent in Q1. Today’s thought-provoking articles: Where the oldest […]

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United States

It’s Official: Kabbage To Acquire Orchard (Lend Academy) Rated: AAA

It was the worst kept secret in fintech. There were rumors flying around during LendIt Fintech earlier this month and then Bloomberg published this story a couple of weeks ago about the pending deal. Well, today it became official. In a press release this morning it was confirmed that Kabbage, the tech-focused small business lender, will acquire Orchard.

So, what will become of Matt Burton and his team? Some clues are provided in the press release:

Orchard’s CEO and co-founder, Matt Burton, as well as Chief Analytics Officer and co-founder, David Snitkof, will both join Kabbage in leadership roles upon the closing, helping oversee technology integrations and future innovations. In total, Kabbage will add more than twenty Orchard employees who are predominantly focused on advanced analytics, data science and engineering to its New York City office.

Kabbage plan in Orchard deal: Expand offerings to banks, small businesses (American Banker) Rated: A

Kathryn Petralia, president and co-founder of Kabbage, said the acquisition will help the company diversify its business and offer more data-driven services to small businesses and financial institutions. It currently works with ING, Santander and Scotia Bank. Kabbage’s U.S.-based loans are issued by Celtic Bank in Salt Lake City.

The Orchard name will not survive. “At closing we will be Kabbage,” Burton said.

Until now, Orchard has been providing loan and portfolio analysis to other online lenders. This business model will be discontinued and those relationships will most likely end. Orchard’s current clients are being told about its sale to Kabbage, Burton said.

Ascentium Capital Announces $ 330 Million Securitization (Ascentium) Rated: AAA

Ascentium Capital issued a $330 million small ticket equipment securitization of Ascentium Equipment Receivables 2018-1 Trust.

This represents the company’s ninth securitization since 2012 and the first time a non-investment grade, independent equipment finance company received triple AAA and Aaa ratings from both Standard & Poor’s and Moody’s.

LendingTree Reports Record 1Q 2018 Results (Markets Insider) Rated: AAA

LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com today announced results for the quarter ended March 31, 2018.

First Quarter 2018 Business Highlights

  • Revenue from mortgage products of $73.5 million represents an increase of 17% over first quarter 2017 driven by strong growth in both purchase and refinance revenues at 13% and 18%, respectively.  According to Mortgage Bankers Association, originations industry-wide were projected down 4% in the comparable period.
  • Record revenue from non-mortgage products of $107.6 million in the first quarter represents an increase of 55% over the first quarter 2017.
  • Revenue from our credit card offerings continued its momentum, growing to $46.1 million in 1Q, up 36% over the first quarter 2017.
  • Personal loans revenue of $26.0 million grew 53% over first quarter 2017.
  • Home equity revenue continued to climb, growing 81% over first quarter 2017.
  • More than 8.0 million consumers have now signed up for free credit scores and savings alerts through My LendingTree.  Revenue contribution from MyLendingTree grew 76% in the first quarter compared to the prior year period as new features, such as Credit Analyzer and free credit monitoring, are driving increased engagement.

LendingTree Study Reveals Which Places Buy the Oldest Used Cars (PR Newswire) Rated: AAA

LendingTree today released the findings of its study on the places that buy the oldest used cars. LendingTree analyzed auto loan offers for borrowers in the top 50 U.S. metros (based on population) to find the average age of used cars financed in each metro, as well as which makes of used cars were most popular.

The national average age of a used car people sought to finance was six years old, but some parts of the country prefer older used cars more than others.

Source: Lending Tree

Mobile Banking One of Top Three Most Used Apps by Americans, 2018 Citi Mobile Banking Study Reveals (Citigroup) Rated: AAA

Apps for mobile banking have become some of the most widely used by Americans, according to Citi’s 2018 Mobile Banking Study, released today. The survey of 2,000 U.S. adults found that, measured by top two ranked responses, 31 percent of consumers use their mobile banking app the most, behind only apps for social media (55 percent) and the weather (33 percent).

“Over the past year we’ve witnessed this increase in engagement first-hand, with mobile usage in North America increasing by almost 25 percent, and we don’t see this trend slowing down any time soon.”

LendingClub was sued for the fees it charges — how you can avoid being overcharged (Market Watch) Rated: A

Pay attention to both the interest rate advertised, as well as the annual percentage rate (APR), Clements said. If they’re different, the lender is likely factoring additional fees into your annual percentage rate.

You may need to borrow more money than you expected if that’s the case, he said, because the total amount you would receive will be less than you asked for.

Research several lenders before choosing which one you want, he said. And if there are any unfamiliar terms, or any confusion about how much you’ll pay back monthly, ask.

Digital bank in a box: Fintech offers branding tool (American Banker) Rated: A

The core systems provider Nymbus is offering a new product for bank customers that want to get in on the burgeoning trend of having a stand-alone, digital brand.

Dubbed SmartLaunch, the offering enables financial institutions to create a digital brand under their existing charter in as little as 90 days, according to Nymbus. The product is built on Nymbus’ cloud-based SmartCore platform, and the company says it provides banks that use the service with all outsourced operational and technological requirements to run the digital bank. Also included are client support, digital marketing and website services.

Source: American Banker

RealtyMogul and Comunidad Realty Partners Close $ 30 Million in Texas Multifamily Properties (Citizen Tribune) Rated: A

RealtyMogul, a pioneer in providing private real estate to discerning investors, announced that MogulREIT II, its real estate investment trust or “REIT,” has completed investments in multifamily apartment complexes in Fort Worth, Texas and San Antonio, Texas, consisting of over 450 units.

The properties were acquired through a partnership with Comunidad Realty Partners, a dynamic real estate investment firm specializing in workforce housing communities in culturally diverse neighborhoods.

Scaling Real Estate Crowdfunding: PeerStreet Establishes a Culture of Excellence at the Top (Crowdfund Insider) Rated: A

Loans on PeerStreet are sourced and curated from vetted private lenders throughout the United States. These lenders have real estate expertise and established borrower relationships. To date, PeerStreet has helped to finance over $900 million in loans by using this partnership approach. The properties they help finance are typically smaller in value – a segment of the industry that is usually overlooked by big institutional money. Loans range from 6 to 24 months and are first lien so investors have a good degree of security.  Most of the loans are below a loan to value of 75%. About a year ago, PeerStreet announced having funded $300 million in loans. In less than 12 months, PeerStreet has funded double that number.

PeerStreet is doing small loans commercial, some multi family and mixed used properties. The largest loan size is around $5 million but there can be exceptions. The rate of return for investors during 2017 stood, on average, at 8% net of fees. As for defaults, so far only five loans have gone into foreclosure but they have not experienced any loss of principle – a positive metric.

Citizens Bank Taps Finastra and Infosys for Trade Finance Solution (Citizens Bank) Rated: A

Citizens Bank, working with Infosys as its implementation partner, has selected Finastra to power the trade finance solution it offers to its corporate clients. This new capability will enable Citizens’ corporate clients to digitize traditionally paper-based trade processes, leading to increased efficiencies and reduced costs.

The new trade finance offering will allow the bank to meet increased client demand. Citizens picked Finastra’s Fusion Trade Innovation for its end-user experience, ability to support all trade products, capacity to integrate with downstream systems through open APIs and its high level of configurability.

Consumers in Columbus less likely to put fraud alerts on their credit reports (The Columbus Dispatch) Rated: A

However, a new study finds that consumers in the biggest Midwest cities, including Columbus, are much less likely to put alerts on their credit reports than those in other cities, such as Las Vegas, Houston, Miami and New York. The study by online lender Lending Tree was based on a random sample.

US banks to get more freedom to offer unsecured loans (Financial Times) Rated: B

Joseph Otting, Comptroller of the Currency, said he believed standards should be relaxed to allow banks back into the small dollar loan market; loans would range from $500 to $5,000 and be paid back in 45 and 90 days; right now payday lenders dominate this space and typically take advantage of borrowers by charging high fees and rolling over the principal; allowing banks back into the market will help to bring more regulation and cut down on abuses.

Growth plans: Both big and small banks set to expand locally (Orlando Business Journal) Rated: B

David Stahl, senior vice president, SunTrust Bank: We acquired an online lender called LightStream two years ago, and that has been a huge opportunity for us. The days of people walking into a bank and applying for a loan are pretty much gone.

Free Research Reports on These Credit Services Stocks — MoneyGram, Navient, Oaktree Specialty Lending and On Deck Capital (PR Newswire) Rated: B

This morning, WallStEquities.com observes MoneyGram International Inc. (NASDAQ: MGI), Navient Corp. (NASDAQ: NAVI), Oaktree Specialty Lending Corp. (NASDAQ: OCSL), and On Deck Capital Inc. (NYSE: ONDK). Credit Services companies originate, acquire, and service loans to individuals and corporations. Their products include student loans, mortgages, lines of credit, private equity, and venture capital. All you have to do is sign up today for this free limited time offer by clicking www.wallstequities.com/registration

Covr Financial Technologies appoints Chris Growney to Board of Directors; Gregory Fleming and Robert Kerzner, join Covr’s Advisory Board (PR Newswire) Rated: B

Covr Financial Technologies, a digital, multi-carrier life insurance platform for financial institutions, announced that Chris Growney, an advisor with venture capital and advisory firm Nyca Partners has joined Covr’s Board of Directors following Nyca’s role in Covr’s June, 2017 fundraising. Growney, a director, advisor and investor in a broad range of start-up and growth companies was most recently the founder of Clearwater Analytics, an investment analytics and accounting software company based in Boise, Idaho.

6th Avenue Capital Announces Promotion of Darren Schulman to President (deBanked) Rated: B

6th Avenue Capital, LLC (“6th Avenue Capital”) announced today the promotion of Darren Schulman to President, effective immediately. In his new position, Schulman has oversight over originations, underwriting, operations, collections and strategic initiatives. He previously served as Chief Operating Officer, and will continue to report directly to Chief Executive Officer Christine Chang.

The company also announced today that Chang and Schulman have been appointed to the company’s Board of Directors.

Best Egg Teams with Junior Achievement of Delaware on Financial Education Initiatives (Business Wire) Rated: B

Best Egg, the consumer lending brand of Marlette Funding, LLC, is providing both classroom education and other inspiring financially-related activities for Junior Achievement of Delaware (JA of DE). This announcement coincides with National Financial Literacy Month, being celebrated throughout the month of April.

United Kingdom

Funding Circle brings second marketplace loan deal (Global Capital) Rated: AAA

Sole arranger and lead manager Deutsche Bank announced Thursday a £207m UK SME securitization from Funding Circle, Small Business Loan Origination Trust 2018-1, the second ABS offering from the online lender.

In addition to being just the second deal from Funding Circle, and the third European marketplace loan ABS overall, SBOLT 2018-1 marks the first time Kroll Bond Rating Agency has assigned a public rating for a European securitization deal.

KBRA Europe Assigns Preliminary Ratings to Small Business Origination Loan Trust 2018-1 DAC (Business Wire) Rated: A

Kroll Bond Rating Agency Europe Limited (KBRA) has assigned preliminary ratings to four classes of notes (“Rated Notes”) issued by Small Business Origination Loan Trust 2018-1 DAC (“SBOLT 2018-1”). This is a £206.6 million ABS transaction collateralised by unsecured loans made to small and medium-sized enterprises (“SMEs”) incorporated in the United Kingdom (“UK”).

This transaction represents the second ABS securitisation collateralised by unsecured loans to SMEs originated through the online lending platform operated by Funding Circle Limited (“Funding Circle”), and the first European rated ABS securitisation for KBRA.

Source: Business Wire

Confirmation of that came on Thursday as Revolut became the first of Britain’s digital-only banks to achieve “unicorn” status – in other words, a privately held start-up company with a valuation of more than $1bn (£720m).

Revolut, which was only founded in July 2015, has been valued at $1.7bn (£1.22bn) in its latest funding round.

The bank, which started out as a currency exchange app but later moved into providing personal banking and cryptocurrency trading services, raised $250m (£180m) from backers including DST Global, an investment firm backed by the Russian billionaire Yuri Milner, whose previous early-stage tech investments have included Facebook, Twitter, Airbnb and Spotify.

Ranger Direct Lending rejects investor call to wind up (City Wire) Rated: A

Ranger Direct Lending (RDL) has criticised shareholder Oaktree Capital Management for trying to force the struggling alternative income fund to wind up.

Oaktree, the second largest shareholder in the fund that invests in and through lending platforms, has made public its correspondence with Ranger, which it described as a ‘sub-scale platform’ with shares ‘too illiquid to attract large institutional investors, especially in light of its persistent trading discount to net asset value (NAV)’.

Goji passes £50m in assets (Goji) Rated: A

Goji has now got more than £50m of assets on its platform a little over a year after opening its doors to investors.  With over 5,000 customer accounts, our hard earned growth is testament to the work the whole industry has done in selling the asset class to the UK public.

After campaigning hard to change the tax laws to open up the ISA rules so that non-lending platforms could also offer an IFISA, Goji was the first firm to offer investors diversification across a number of platforms through a single Innovative Finance ISA.  Goji’s Diversified Lending Bonds target 5%, whilst it’s Renewables Lending Bond targets returns in excess of 8%.

A lending site where you can rent anything just scored millions in venture capital (Business Insider) Rated: A

Fat Lama, which announced $10 million in its Series A on Wednesday in a round led by Blossom Capital, says it will use its latest funding to further its reach within the US and to create a mobile-first offering (so far, the site’s mobile app is only available in the UK).

Fat Lama lets users borrow everything from drones to camera equipment to printers.

The site insures any item listed on its site for up to $30,000, and Englander said his company has plans to raise that amount to $50,000 in the near future.

 

 

Artificial intelligence backed to reduce P2P defaults (Peer2Peer Finance) Rated: A

ARTIFICIAL intelligence (AI) could provide peer-to-peer lenders with greater lending security and less chance of defaults, a technology consultancy claims.

Nick Parham, technical pre-sales consultant at NashTech, said there is much P2P platforms can learn about AI from traditional lenders.

“The traditional lending market offers us a powerful insight into the potential for AI in P2P lending,” he said.

TURNING TO YOUR PEERS (BQ Live) Rated: A

They created ArchOver, a peer-to-peer (P2P) lending platform that allows firms that have been operating for more than two years to borrow money from lenders using its website. Companies borrow a minimum of £250,000, with interest rates starting at 7.7% a year.

Since it launched in the autumn of 2014, ArchOver has helped its lenders to inject more than £65m into British businesses, bringing in more than £2.5m in interest at an average return of 7.3%. In an age when bank savings accounts are paying less than 0.5%, it’s easy to see the attraction for investors who understand the risks as well as the rewards.

European Union

Klarna integrates with Magento for streamlined checkout (Payments Source) Rated: AAA

Commerce platform Magento is giving merchants the option to activate Klarna instant credit for online checkouts.

Sweden-based Klarna is built into the latest version of Magento Commerce, giving merchants a streamlined path to offer goods consumers may opt to pay for immediately, within 30 days, or longer via installments, Klarna said in a Thursday press release.

Taaleri increases its ownership in Fellow Finance by 7.3 per cent (Globe Newswire) Rated: A

Taaleri Plc has decided to exercise its option to acquire an additional 7.3% holding in Fellow Finance Oy, as outlined in the shareholders’ agreement signed in 2015. After the transaction Taaleri’s shareholding in Fellow Finance, which offers a crowdfunding platform for companies and for consumers, will increase to 45.7%. The transaction is scheduled to be realized in April-May.

International

BBVA and Indra deliver the world’s first blockchain-supported corporate loan (BBVA) Rated: AAA

BBVA has successfully completed the first global corporate loan transaction using blockchain technology from the negotiation of the deal to its signing, in line with their close collaboration to leverage cutting-edge technologies to streamline business processes.

The pilot enabled the closing of a €75 million loan using a solution developed by BBVA based on distributed ledger technology (DLT). This demonstrates how BBVA continues to incorporate innovative and disruptive technology into its customer solutions, including those products that up to now have seen limited digital innovation, as is the case with wholesale finance.

BANKS VS FINTECHS: THE WAR FOR TALENT (International Banker) Rated: A

Many of these start-ups, moreover, are equipped with enough cash to be able to compete with their banking counterparts on salaries. According to assessments by recruitment site Glassdoor, for example, a London-based software engineer at online lender Funding Circle will earn a base salary of £51,000 on average, which is equal to the salary paid at Goldman Sachs for a similar role. At UBS, that figure is £59,000, while at challenger Monzo Bank it is currently £64,000. Speaking recently to Bloomberg, co-founder and CEO of property lending platform LendInvest, Christian Faes, asserted that between 30 and 40 percent of the company’s hires are from major financial institutions, while banks also account for 100 percent of its small-risk and compliance team. Similar trends are also being reported by UK online lender MarketInvoice Ltd., where three-quarters of its 85 employees have come from either the financial-services or accountancy space.

Source: International Banker

Deserve Raises $ 50 Million in Debt Financing (Finovate) Rated: A

In rebranding his company from SelfScore to Deserve, CEO Kalpesh Kapadia explained “we believe that access is everything and everyone deserves a chance to build a positive credit history. So we are making our products available to all students, U.S., and international, and to all those who seek to build and/or maintain a good credit history.”

And now Deserve is $50 million closer to serving this broader population of potential customers. The Accel-backed fintech has just secured a $50 million debt facility from Keystone National Group to drive growth in account receivables and help “jumpstart” first-time credit owners’ financial journeys.

 

Fintech for the Financially Excluded? (Stanford Social Innovation Review) Rated: A

At Bamboo Capital Partners, we believe fintech can help low-income people reduce vulnerabilities, build assets, manage cash flow, and increase income, and we have invested as such: In the last couple of years, we have made four equity investments in fintech companies in Colombia, Mexico, Chile, and Tanzania, committing more than $16 million. Our investees are helping democratize access to finance through peer-to-peer lending platforms (KuboFinanciero), promoting access to insurance (ComparaOnline), enabling mobile payments and savings for low-income people through nano deposits (Movii), and providing a smart data platform for emerging market financial institutions (First Access).

APAC

Game-changing technologies at work in Asia Pacific’s real estate (JLL) Rated: AAA

Singapore-based mall operator Capitaland has a chatbot called Sparkle on its app that responds to shoppers’ queries and make reservations or hail a ride from its malls.  National Australia Bank is participating in a A$9 million investment round for real estate crowdfunding platform Brick X.

The rise of proptech, however, could be a cause for cybersecurity concerns, as highlighted in JLL’s report Clicks and Mortar: The Growing Influence of Proptech.

Source: Jill Real Views

 

Coast Labor MP Calls For Ban On Loan Machines (TripleM Network) Rated: A

There are calls for the Berejiklian Government to outright ban payday loan machines cropping up on the Central Coast.

There’s a Cash N Go kiosk at Wyoming offering up to $1000 at a time with minimal checks, while the devices, which look like ATMs, have also been spotted in the Hunter and Illawarra.

Latin America

Brazil’s Central Bank authorizes peer-to-peer lending (Rueters) Rated: AAA

Brazil’s Central Bank on Thursday released rules for credit start-ups that include authorization for peer-to-peer lending, as a way to increase competition in loans in a country with notoriously high interest rates for consumers.

Credit fintechs will be allowed to operate with a minimum capital of 1 million reais ($288,000), according to the new regulation. Peer-to peer lending had not yet been formally authorized in the country. The practice involves lending between individuals through online services.

Canada

Funding for Canadian Fintech Companies Declines 60 Percent in Q1 (Investing News) Rated: AAA

Canadian fintech companies received $88 million in investment over the first quarter of 2018, representing a 60-percent decline, says a new report from PwC.

Total investment in Canada in the first quarter of 2018 was over $1 billion, which is a 52-percent increase over the last quarter. A total of 105 deals were signed as compared to 81 in the previous quarter, representing a 30-percent increase.

Source: PwC

Read the full report here.

IOU Financial Inc. Releases Financial Results for the Year Ended December 31, 2017 (Benzinga) Rated: AAA

IOU FINANCIAL INC. (“IOU” or “the Company”) (TSXV:IOU) announced today its results for the year ended December 31, 2017.

  • Reached profitability during the year with positive adjusted net earnings of $0.1 millionin Q4.
  • Surpassed the half-billion loan origination mark with loan originations of $91.3 million(US) for the year.
  • Increased interest revenue of 8.1% to $14.4 million for the year ended December 31, 2017 vs 2016.
  • Reduced operating costs (excluding non-recurring costs) by 20.3% to $9.0 million for the year ended 2017.
  • Raised $3.5 million via a private placement.

BlackChain Solutions Signs LOI With DMG Blockchain Solutions to Bring P2P Lending to the Cryptocurrency Market (Investing News) Rated: B

Under the proposed license, BlackChain will retain exclusive rights for use of the technology for P2P Lending. DMG will be entitled to a royalty on commercial revenues generated by Blackchain using the technology. The parties intend to negotiate and finalize a definitive agreement by May 15th, 2018.

 

MENA

Global REIT’s crypto-powered real estate investment model will be first of it’s kind… (Global Cryptocurrency Press) Rated: AAA

Moving this structure onto the blockchain, and powering the investments with cryptocurrency now means the average cryptocurrency investor can easily access the real estate investment market. Global REIT will begin in their home of Dubai, a place where real estate is currently exploding, and acquire assets within the U.A.E, before branching out globally.

Authors:

George Popescu
Allen Taylor

Thursday April 26 2018, Daily News Digest

Hong Kong IPO

News Comments Today’s main news: FTC says LendingClub misled customers on fees. Credit Karma expands ID theft monitoring to include dark web data. Two startup robos were top performers in Q1. Shanlin Finance leaders charged with operating Ponzi scheme. TransferWise launches borderless accounts in European nations. Today’s main analysis: Small-dollar loans. Today’s thought-provoking articles: Elevate’s safe credit. Hong Kong makes […]

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United States

Lending Club misled customers about hidden fees, regulators say (CNN Money) Rated: AAA

The Federal Trade Commission said the company, which connects borrowers to investors without banks in the middle, “lures” customers with the promise of no hidden fees.

Instead, Lending Club deducts money up front — hundreds and sometimes thousands of dollars, the FTC said.

The FTC also accused Lending Club (LC) of falsely leading customers to believe they have been approved for a loan.

The FTC further accused Lending Club of withdrawing double payments from the accounts of its customers and charging customers who had canceled auto-payments or already paid off their loans.

LendingClub (LC) Said FTC Allegations are Unwarranted (Street Insider) Rated: A

Following an inquiry that began in May 2016, the U.S. Federal Trade Commission (FTC) brought an action against LendingClub(NYSE: LC) earlier today in the Northern District of California alleging that certain LendingClub practices do not, or in the past did not, comply with the requirements of the FTC and Gramm-Leach-Bliley Acts.

LendingClub believes that the allegations in the FTC’s complaint are legally and factually unwarranted. The company is disappointed that it was not possible to resolve this matter constructively with the agency’s current leadership and intends to oppose the claims and work towards an early resolution of the matter in Federal Court. Additional information about the complaint and LendingClub’s response are on its blog.

Why LendingClub Corp Stock Plunged Today (Motley Fool) Rated: B

Shares of peer-to-peer (P2P) lending company LendingClub Corp (NYSE:LC) are down by about 15% as of 3:30 p.m. EDT after the Federal Trade Commission charged the company with deceiving customers.

Elevate Provides Safe Credit To People Banks Can’t Serve With FICO (Forbes) Rated: AAA

Providing credit to 160 million Americans who are being ignored by banks sounds like a great business. And indeed, Elevate, which does just that, has been growing faster than Lending Club, SoFi, or OnDeck and is more profitable than any of them, said Ken Rees, the company’s CEO .

“Forty percent of Americans show monthly income swings of 30%. The majority of Americans need access to emergency credit but the banks have pulled back. Credit is particularly important because they have very low savings.”

Credit Karma expands its identity theft monitoring tool to include dark web data (Tech Crunch) Rated: AAA

After introducing a free identity monitoring tool for its users late last year, Credit Karma is widening the scope of its fraud-fighting scans to include data from the dark web.

Credit Karma’s  existing ID-monitoring tool searches 4.5 billion public breaches for a user’s personal data, but the improved service will scour additional breaches culled from the dark web. Added up, the tool will now search through 13 billion data breaches.

The company estimates that 65 percent of its users have experienced a data breach, whether they know it or not, so Credit Karma is well-positioned to issue a wake-up call about protecting identifying information online.

2 New Robo-Advisors Among the Top Performers in Q1 (ThinkAdvisor) Rated: AAA

Two relative newcomers to the robo-advisor space are among the industry’s top three performers in the first quarter, according to the latest Robo Report from BackEnd Benchmarking.

SoFi Wealth Management, which launched in May 2017 as an offshoot from the SoFi online lending platform, took first place; TIAA SRI, the socially responsible investment portfolio of its TIAA Personal Portfolio robo, placed third; and sandwiched between the two was Schwab Intelligent Portfolios.

All three robos lost money in the first quarter in their taxable, balanced portfolios, split roughly 60/40 between stocks and bonds, but they performed better than other digital advisors and the overall stock market, which was down 0.76%, for the S&P 500. Their losses ranged from 0.14% for SoFi and 0.45% for TIAA SRI.

Schwab Intelligent Portfolios excelled largely because of its fixed income allocation, which included high-yield bonds and international debt, according to the Robo Report. It placed first for fixed income performance not only for the first quarter of 2018 but for the one-year and two-year trailing periods.

Source: Think Advisor

Small-dollar loans (Lexology) Rated: AAA

The Trump Administration has also taken notable steps to ease the burden placed on the payday lending industry. These include terminating the Obama-era “Operation Choke Point,” which was designed to discourage banks from doing business with payday lenders,11 as well as removing payday-bank partnership restrictions for at least one payday lender.12 This signals a significant departure from regulatory constraints put in place a decade ago prohibiting affiliations between national banks and payday lenders that sought to circumvent state interest rate caps.13

In addition to established market participants targeting borrowers with high credit scores, new internet-based startups are offering small-dollar loans to non-prime borrowers, directly targeting the payday lenders’ customer base. Fintechs aim to compete with traditional payday lenders by marketing a more customer-centric approach, as well as flexible terms and lower fees. These new market entrants generally rely on the use of AI-driven scoring products and non-traditional data analytics to assess a borrower’s creditworthiness. In addition to fair lending considerations, these new online startups generally rely on mobile devices and related technology to host their software and undertake lending decisions, thereby raising privacy and cybersecurity concerns.

Source: Lexology

Navient reports higher earnings in first quarter (Delaware Business Now) Rated: A

Wilmington-based Navient reported higher earnings in the first quarter as the company expanded its segment reporting to reflect a broader array of businesses.

Results that included the origination of $500 million of private education refinance loans, a 43 percent decrease in private education loan charge-offs and a 32 percent increase in business processing fee revenue from the year-ago quarter.

For the first-quarter 2018, GAAP (Generally Accepted Accounting Principles) net income was $126 million compared with $88 million ($0.30 diluted earnings per share) for the year-ago quarter.

California merchant accuses lender of ‘rent-a-bank’ scheme (Rueters) Rated: A

Utah-based Celtic Bank and Georgia-based lender Kabbage Inc have been hit with a proposed class action accusing them of creating a “rent-a-bank” arrangement to issue high-interest loans to small businesses in California and evade the state’s usury laws.

The case was removed by Celtic Bank to federal court in Los Angeles on Tuesday after being filed last month in Los Angeles County Superior Court.

How employees build and shape the rock-solid cultures at 5 local tech companies (Built In Chicago) Rated: A

What is the foundation of Enova’s culture?

If I may grossly generalize and speak for the majority of the millennial workforce, workplace culture is a big job-hunting factor. Of course, we want to make decent salaries and have access to good health insurance. We also want to be spending those 40 or more hours per week with people we enjoy working with, tackling independent and collaborative work, constantly learning new things, and developing our skills — all of which Enova does a great job of cultivating.

What is the foundation of Avant’s culture?

Avant’s culture is based a lot around letting the best idea win. No matter what part of the business someone is in, if they have an idea that really shines through and will resolve the issue at hand, they are heard. In my experience, even if you’re not in your domain, people will listen to you as long as you come in with a clear spec. If you ask for something and have a good explanation as to why it’s needed, you can get it.

 

 

CEO of student loan marketplace LendEDU admits the name of the founder of a partner site is fake (CNBC) Rated: A

A spokesman cited in publications, including a CNBC story in March about students using their financial aid money to invest in cryptocurrencies, is a fake, the CEO of a partner website has admitted.

Nate Matherson, CEO of student loan refinancing company, LendEDU, said he started The Student Loan Report — studentloans.net — in 2016.

 

Where to Get a Loan of $ 5,000 or Less (Student Loan Hero) Rated: A

Many online lenders have personal loans that offer more flexibility. Some lenders set borrowing minimums as low as $1,000.

Pros: Some online lenders offer flexible repayment plans. For example, Avant allows you to make changes to your upcoming payments online, including the amount and date of your current or future payments. The company says it’s willing to work with you if you’re unable to make a payment, making it easier to repay your loan.

Kirsten Gillibrand Unveils A Public Option For Banking (Huffington Post) Rated: A

Sen. Kirsten Gillibrand (D-N.Y.) is introducing legislation Wednesday that would require every U.S. post office to provide basic banking services, an ambitious step aimed at improving the lives of Americans with limited financial resources.

The postal system’s 30,000 locations touch every community. A majority ― 59 percent ― are in so-called banking deserts, or zip codes that have either no bank branches or just one.

Upgrade Personal Loans Review: Low Rates and Free Credit Monitoring (Student Loan Hero) Rated: A

Upgrade is an online lender that primarily offers unsecured personal loans between $1,000 and $50,000. You can use these loans for a variety of purposes, including home improvement, debt consolidation, or a big purchase.

As unsecured loans, these personal loans don’t require any collateral.

Source: Student Loan Hero

How to Cope With the High Costs of Infertility (US News) Rated: A

According to the National Survey of Family Growth by the Centers for Disease Control and Prevention, one in eight couples have trouble getting pregnant or sustaining a pregnancy and more than 85,000 women in the U.S. undergo in vitro fertilization each year.

According to a 2015 study about the sentiment, costs and financial impact of fertility treatments in the U.S. by Prosper Marketplace, a peer-to-peer lending marketplace, nearly half of those polled said that prices impacted the level of treatment they sought. Almost 34 percent of those women surveyed had to stop treatment due to the financial burden. Meanwhile, 70 percent of participants reported acquiring some degree of debt in their quest to conceive with more than 26 percent taking on over $30,000 of debt. The cost of treatments was also the single largest factor for those respondents who initially decided to delay fertility treatment at nearly 82 percent.

Washington Wants to Weaken Bank Rules. Not Every Regulator Agrees. (The New York Times) Rated: A

In recent weeks, federal banking regulators have proposed softening a requirement that puts a hard limit on how much the largest banks can borrow. The rule, known as the supplementary leverage ratio, requires that banks prepare for a disaster by maintaining a certain level of capital on their balance sheets based on their total size.

Banks have long complained that the rule is too restrictive and makes it harder for them to do business, including lending, in important markets. They have asserted that the ratio is too blunt of an instrument and often the strictest of the various capital requirements that were put in place after the crisis.

Which Is Best: REITs or Real Estate Crowdfunding? (US News) Rated: A

Who can invest in REITs and real estate crowdfunding? The best investors for REITs and real estate crowdfunding might not be the same. Joseph Hogue, chartered financial analyst and owner of Crowd 101, a crowdfunding website, says that although real estate crowdfunding is less work than direct investment in properties, it still involves more due diligence than REIT investing.

What are the advantages and disadvantages of REITs and real estate crowdfunding? For hands-on investors, who want to customize their real estate investing, crowdfunding fits the bill, says Javier Benson, senior vice president of strategy and implementation at crowdfunding site RealtyShares. RealtyShares specializes in funding commercial real estate projects valued at more than $50 million, certainly not a market for the individual investor.

Benson summarizes the benefits of real estate crowdfunding: “lower fee loads, increased transparency and the opportunity to select individual projects.”

Lenders reject 9% of CT loan applications (Hartford Business) Rated: A

Mortgage lenders rejected 9 percent of loan applications in recent years from Greater Hartford borrowers, which is the nation’s 10th worst denial rate, according to a recent study.

The study by national lending exchange marketplace Lending Tree said lenders denied mortgage shoppers in Hartford, West Hartford and East Hartford at a high rate mainly due to insufficient debt-to-income ratios and collateral.

Hartford’s would-be borrowers ranked second in the nation for cities where collateral issues resulted in their mortgage denial, which amounts to 24 percent of its denials.

LendingTree and COMPLY2018 Announce the Kraken Innovation Award (PR Newswire) Rated: B

COMPLY2018 announces that LendingTree, the nation’s leading online loan marketplace, will award one company as The Most Innovative Company during the annual RegTech and Compliance Conference May 16-17 in New York City.

United Kingdom

Growth Street Celebrates Full FCA Authorization & New GrowthLine Lending Product: Need to Borrow £2M? (Crowdfund Insider) Rated: AAA

UK alternative finance firm Growth Street has been granted full FCA authorization,  a significant milestone for Growth Street, which had been operating as an Appointed Representative of Resolution Compliance Limited since 2016.

Growth Street has simultaneously rolled out an update to its flagship business lending product, GrowthLine. The firm is now accepting applications from businesses looking to borrow up to £2M, a substantial increase from the previous maximum limit of £1M.

Borrowers unaware of how to check loan providers as scams increase (Peer2Peer Finance) Rated: A

A THIRD of personal loan applicants have admitted they weren’t confident about how to check if their provider was legitimate, the Financial Conduct Authority (FCA) has revealed.

Research by the City watchdog found 36 per cent of those who took out a loan product in the past three years didn’t do any checks to ensure the legitimacy of their loan provider.

The FCA has revealed that more than £3.5m has been lost to loan fee fraud and said reports to its consumer helpline on this issue had increased by 44 per cent.

China

Eight charged in China over ‘Ponzi scheme posing as P2P lender’ that took US$ 9 billion (China Morning Post) Rated: AAA

Eight ringleaders of the Shanghai-based Shanlin Finance have been charged with illegally obtaining deposits and taken into custody, according to local public prosecutor the Shanghai Pudong district People’s Procuratorate, the official Xinhua News Agency reported on Tuesday.

The scheme was disguised as a peer-to-peer lending platform, police said. Shanlin’s online lending platforms and mobile apps have been suspended from service.

Big Bang Means Buyer Beware in Hong Kong IPOs (Bloomberg) Rated: AAA

Hong Kong Exchanges & Clearing Ltd. will allow innovative companies that use shares with weighted voting rights to apply for IPOs starting April 30, and will also admit unprofitable biotech firms. That’s a landmark departure from the exchange’s longstanding adherence to the one-share-one-vote principle and the requirement for a three-year profit track record.

China has also opened the door for companies listed on its National Equities Exchange and Quotations market – an over-the-counter trading venue that’s developed something of a reputation as a casino – to sell H shares in Hong Kong.

Looser entry rules will create a vastly different market.

The Fall of Peer-to-Peer Lending in China (Caixin Global) Rated: A

P2P lending, which was designed to bypass traditional lending by matching individual borrowers and lenders, began to flourish on the Chinese mainland in 2011 as the government encouraged the wider use of technology to expand financial services to small businesses and individuals. At P2P lending’s peak in late 2015, there were more than 3,300 platforms operating, according to Wandaizhijia, a portal site that tracks the sector.

However, due to the absence of unified regulations, a great proportion of P2P lenders began collecting cash from investors, offering high returns. A market worth more than 1 trillion yuan ($158 billion) quickly developed.

China’s online lenders reel from industry shake-out (Financial Times) Rated: A

A survey by FT Confidential Research shows the online lending industry in China continues to consolidate from new regulations; the days of significant growth and platform expansion have ended as the government looks to weed out the smaller players; since 2016 the government has capped borrowing limits, shut down secondary markets and forced platforms to file with local regulators

European Union

Fintech unicorn Transferwise launches a ‘borderless’ account in Sweden, Finland and Denmark (Business Insider Nordic) Rated: AAA

Transferwise is today rolling out a “borderless” consumer account and linked debit card, which will let people hold money in multiple currencies.

The service, which Transferwise says is the first one of its kind, has been openly trialed among a few thousand customers since January, and goes live globally including in Sweden, Denmark and Finland. Norway will follow later on.

This means that people will be able to transfer and spend money abroad, with little or no exchange or mark-up fees. They will also be able to make withdrawals through a Mastercard debit card. The debit card will me made available for larger businesses later in 2018.

RBS plans to move 1m users to new challenger bank, says report (AltFi News) Rated: A

According to an insider at the Royal Bank of Scotland, the bank has set an internal target of switching more than 1m users from Natwest to its latest project, a “next generation mobile-only bank”, in time for its debut in the third quarter of 2018.

In another interesting move, the insider has said that RBS’ mobile-only bank will be pursuing a marketplace business model, aiming to forge third-party partnerships as its primary source of revenue over lending. This is a model that is now well-known in the digital banking sector, hailed by dominant players like Monzo and Starling Bank as the future of next generation banking.

GDPR and financial advice: Processing data on children (Professional Adviser) Rated: A

The General Data Protection Regulation (GDPR) makes special mention of children and, for the purposes of the regulation, consent cannot be granted without parental approval by anyone under the age of 13. Upon their 13thbirthday, data subjects can freely consent to how their data is processed – in other words, they can sign up to newsletters and appropriate alerts.

Unlikely as it may be that a 13-year-old will be signing up for newsletters from financial advisers, advice firms will still be processing large amounts of data on under-13s. Taking Intelligent Office as an example, there are currently more than 75,000 records of people under the age of 13 and so it is important that appropriate checks are in place and that parental consent has been granted at the beginning of the process.

Deposit Solutions shows potential of open banking (Euromoney) Rated: A

However, don’t tell that to Deposit Solutions. The Hamburg-based provider of an open-banking platform that lets deposit-rich banks offer their account holders insured savings products from other banks is growing fast. It launched its own business-to-consumer marketplace Zinspilot in September 2015 and by the end of 2016 had transmitted $1 billion in deposits.

Deposit Solutions also has 50 banks in 16 European countries on its B2B platform. These include Deutsche Bank, FFB – the German subsidiary of Fidelity – and MünchenerHyp in Germany, and Atom Bank and Close Brothers in the UK.

So-called product banks, such as Atom, that are seeking funding, but don’t want to invest in a traditional deposit-gathering infrastructure, can offer terms to so-called client banks, such as Deutsche, with lots of customers, but already an excess of deposits.

International

Inside Santander’s plans to digitize money (Tearsheet) Rated: AAA

The Spanish banking giant’s U.K. arm recently launched One Pay FX, a mobile payments service for its U.K. debit card holders that want to send payments to people in Euro Zone countries and the U.S. It’s the first market-ready product built on blockchain technology, Ripple’s xCurrent protocol, for retail customers. It had been running as a pilot for employees for the last 18 months.

Santander, one of the founding members of R3 CEV, a prominent consortium of banks investing in the company’s blockchain technology for financial applications, soon became one of the first members to exit the group as it concentrated on other payments-focused group work like the Utility Settlement Coin — “a tokenized version of central bank money,” in Faura’s words — and the Global Payments Steering Group.

Source: Tearsheet

This MBA Loan Provider Is Helping International Students Start New Careers Abroad (Business Because) Rated: A

According to BusinessBecause data, 90% of MBA applicants would consider studying abroad. At the same time, over 60% say they wouldn’t be able to pursue an MBA without financial aid.

Prodigy Finance has lent more than $505 million in loans to over 10,300 students globally. Those loans have enabled international students such as Alex Brack, originally from Brazil and a recent MBA graduate for The F.W. Olin Graduate School of Business at Babson College, to thrive.

ZPER Secures Crypto Mobile Wallet with Trustonic (Global Banking and Finance Review) Rated: B

Following an increase in incidents such as the January 2018 theft of $425 million from Coincheck Inc, ZPER, the decentralised peer-to-peer (P2P) financial ecosystem, is launching the most secure cryptocurrency wallet available. ZPER is achieving this by embedding advanced security solutions from app and device security leader, Trustonic, to provide best-in-class protection. This move is in response to growing concerns about the vulnerability of cryptocurrencies when stored in exchanges.

Australia

 

Instant cash loan machines may target most vulnerable with quick dollars, financial counsellor says (Australian Broadcasting Corporation) Rated: A

The emergence of instant cash loan machines across parts of New South Wales has sparked fears about low-income families being potentially caught in a debt trap.

The machines, which look like ATMs, only require identification and bank details before users are approved for cash loans almost immediately.

Financial counsellors have expressed concern about the devices, which they say appear to be popping up in low socio-economic areas.

India

 

RentoMojo is using machine learning to create credit profiles of users (Tech Circle) Rated: AAA

It raised $10 million (Rs 64.3 crore) in a Series B round of funding led by Bain Capital Ventures and Renaud Laplanche, a French-American entrepreneur. The company had earlier raised $2 million in a pre-Series A round from Accel Partners and IDG Ventures India in November 2016.

Asia

Emerging Asian leaders in Blockchain and Cryptocurrency to watch out (Finextra) Rated: A

Crowd-Genie, an Asia-wide cross-border lending platform, concluded its ICO on March 1, raising over $5.5 million. Under the stewardship of CEO and Co-Founder,Akshay Mehra, Genie is aiming to build a private capital hub using smart contracts to make borrowing safer, cheaper and more efficient. Mehra is certified in CMFAS by the MAS and has over 15 years industry experience. His goal of creating a tokenized lending platform puts him at the forefront of blockchain and cryptocurrency technology in Asia.

Under Mehra’s leadership, Crowd Genie’s goal is to develop a Business Loans Asset Exchange on which lenders can enhance their liquidity by transferring asset ownership. Crowd Genie Financial Services Pte. Ltd. is one of a handful of licensed platforms in Singapore to hold a ‘Dealing in Securities’ license by MAS and GenieICO’s token – CGC – was listed on the Cobinhood exchange on March 19.

Latin America

Brazilian bank IPO tests disruption potential of fintech firms (Reuters) Rated: AAA

The first initial public offering (IPO) by a Brazilian retail bank in nearly a decade, set to price on Thursday, will test if investors expect new technologies to give smaller lenders a fighting chance against Brazil’s dominant big four banks.

Banco Inter SA, a tiny mortgage lender that has reinvented itself as a purely online bank, is the first in a wave of feisty digital challengers planning to go public – and looking to trade at higher multiples than many of Brazil’s largest lenders.

Authors:

George Popescu
Allen Taylor

Friday January 26 2018, Daily News Digest

marketplace lending

News Comments Today’s main news: SoFi completes $960.2M student loan securitization. Robinhood adds zero-fee crypto trading, tracking. Goldman partners with Cadre. South Korea earmarks 11.2T won for midrange borrowers. Today’s main analysis: Buying overdue loans at discount on Mintos’ secondary market. Today’s thought-provoking articles: What RateSetter will look like without unsecured commercial loans. AltFi Data predicts strong U.S. MPL […]

marketplace lending

News Comments

United States

United Kingdom

International

Australia/New Zealand

India

Asia

Africa

News Summary

United States

SoFi Completes $ 960.2 Million Student Loan Securitization (Crowdfund Insider), Rated: AAA

Online lender SoFi announced on Thursday the closing of its $960.2 million offering of SoFi Professional Loan Program 2018-A Notes (SoFi 2018-A). According to the lending platform, the offering reflects underlying collateral of more than $1billion in student loans and is SoFi’s largest ever securitization, as well as the first by any fintech lender to reach the billion-dollar collateral mark.

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-1 (BusinessWire), Rated: A

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-1 (“SCLP 2018-1”). This is a $591.5 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2018-1

Class Preliminary Rating Class Principal
A-1 AA+ (sf) $320,000,000
A-2 AA+ (sf) $142,500,000
B A (sf) $81,000,000
C BBB (sf) $48,000,000

A Knife in Twitter’s Back Could Bring A Happy Ending to SoFi Investor’s Wild Ride (Inc.), Rated: A

And the reason that departure could make me better off is that I invested in SoFi in December 2014 when the company was valued at $1 billion. The last time SoFi raised money – in 2017 – it was valued at $4.3 billion.

There are five reasons I invested in SoFi  — of which these four are the most important.

1. It was targeting a huge market

SoFi started out targeting the $1.2 trillion student loan industry and in 2014 announced an expansion into the $12 trillion mortgage market.

 2. Its management team had excellent industry knowledge

 3. It knew what ailed stakeholders and provided a remedy

Of the 15,500 borrowers who had taken out about $1.3 billion worth of loans in 2014, SoFi estimated that it had saved the average borrower $11,783.

 4, It looked like it could reach $100 million in revenue

In November 2017, Bloomberg reported that in the third quarter of 2017 SoFi’s adjusted operating revenue rose 8.2% to $145.3 million in the third quarter while its adjusted earnings totaled $56.1 million.

Moreover, SoFi added 55,000 members in the quarter to a total of 400,000 – having completed “more than $3.52 billion in loans in the period and completed three securities offerings totaling more than $1.5 billion,” according to Bloomberg.

Scandal-rocked SoFi says it has foundation for full recovery (American Banker), Rated: A

He points to the $12.9 billion in loan originations SoFi did last year. The company sold more than $2 billion of those loans.

“All our investors are still buying, and we’ve added many new investors post Mike leaving,” Jain said. “All our lenders continue to lend to us and they’ve shown interest in lending us more. In the face of adversity, we did all we could.”

Source: American Banker

6 Awesome Benefits of SoFi Parent Student Loans (Student Loan Hero), Rated: A

If your child is a college student, you can borrow money to help offset their education costs with a SoFi Parent Loan. According to the company, borrowers can save $3,637 over the life of the loan compared to a federal Parent PLUS Loan, on average.

If you took out a federal Parent PLUS Loan, you could face interest rates as high as 7.00%.

  1. Low interest rates – Depending on your credit score and income, you could qualify for a much lower rate with SoFi than you would with a federal student loan. SoFi student loans have fixed interest rates as low as 3.25% and variable rates as low as 2.58%.
  2. No origination or application fees – For borrowers who received their loans after October 2017, that fee is 4.264 percent of your loan amount. On a $10,000 loan, that means you’ll have to pay a fee of $426.40, adding to the cost of your child’s education.
  3. Career support
  4. Wealth advisors
  5. Member discounts – If you have a SoFi parent student loan and go on to take out a personal loan, mortgage, or another student loan with the company, you’ll receive a 0.125 percent interest rate discount on the new debt.
  6. Customer support

Loan Program Plans to Offer Students Prepaid Bank Cards (The New York Times), Rated: A

The Department of Education plans to provide students with a prepaid card that would hold surplus loan money that is not needed for tuition, giving the government and financial services providers a firsthand look at how students are spending those dollars.

Robinhood adds zero-fee cryptocurrency trading and tracking (TechCrunch), Rated: AAA

No-commission stock trading app Robinhood will let you buy and sell Bitcoin and Ethereum without any added transaction fees starting in February, compared to Coinbase’s 1.5 to 4 percent fees in the US. And as of today Robinhood will let all users track the price, news, and set alerts on those and 14 other top crypto coins, including Litecoin and Ripple.

Former Ripple Exec Invests $ 57.5 Million in Uphold (CoinDesk), Rated: A

Digital money platform Uphold today announced it has received a $57.5 million investment from former Fed Reserve senior analyst and Ripple chief risk officer Greg Kidd.

Goldman Sachs Teams Up With This Silicon Valley Upstart in Commercial Real Estate (The Motley Fool), Rated: AAA

Goldman’s strategic investments group, which makes venture-capital-like investments, now owns 80 portfolio companies.  One such company is Cadre, a fintech company involved in online commercial real estate investing that Goldman funded in its Series B, C, and D funding rounds. The start-up, which happens to be led by some Goldman alumni, also just received a $250 million investment from Goldman’s private wealth clients.

Cadre also charges its LPs less than a typical private real estate fund. These funds usually charge a management fee, often around 1.5%, as well as a 20% cut of the profits above an 8% “preferred” return to LPs. On Cadre’s website, it advertises a 1% “transaction fee” (I assume that’s based on a per-deal fee, like a broker would get) and then a similar 1.5% management fee, but no incentive fee. Cadre claims this fee structure will increase investors’ invested rate of return by over 2% compared with a typical fund, all other factors being equal.

Instant cash out comes to Venmo (Business Insider), Rated: A

Venmo, the PayPal-owned digital peer-to-peer (P2P) transfer service, is within 30 minutes) cash out their Venmo balance for a flat $0.25 fee.

Trump administration prepares to roll back key financial protections for consumers (MarketWatch), Rated: A

The new leadership has taken over at a time when consumers are struggling with credit-card, auto loan and student loan debt. They’re also worried about their personal data, after a 2017 breach at the credit reporting agency EquifaxEFX, +0.81%   exposed personal information of more than 145 million U.S. adults, including their Social Security numbers and financial accounts.

Mulvaney requested zero dollars for his second-quarter budget

The bureau already had $177 million in reserves, enough to cover the $145 million the bureau projected it would need during the second quarter, he said.

USA consumer bureau delays prepaid card rules into 2019 (AliveForFootball), Rated: B

The Consumer Financial Protection Bureau today finalized changes to its final rule on prepaid products, including an overall delay of the rule’s effective date until April 1, 2019 – an extension long sought by the American Bankers Association. The bureau also made changes meant to boost compliance with the rule and loosen rules on linking credit cards to prepaid accounts or “virtual wallets”.

The rule requires companies to disclose fees on prepaid cards and cooperate with consumers who discover unauthorized charges or errors.

Mastercard eyes biometric totality by 2019 (Fintech Futures), Rated: A

Mastercard says all consumers will be able to identify themselves with biometrics such as fingerprints or facial recognition, when they shop and pay with Mastercard by April next year.

StreetShares lands $ 23M for expansion, will look for new office space (Washington Business Journal), Rated: A

The veteran-oriented online lender will beef up staff and look to expand its government contracting offerings.

REIT Industry Veteran Talks About What to Expect from the Sector in 2018 (NREI Online), Rated: A

NREI: More specifically, what’s your take on how publicly-traded REITs will perform this year? Will 2018 be better overall than 2017?

Aaron Halfacre: In 2017, publicly-traded REIT performance was anemic relative to the S&P 500. I think that can be largely attributed to a few factors: big demand for large-cap “infotech” names driving the broader market, a meaningful sell-off in retail REITs and general market hesitation on REITs in front of the tax bill and Fed decisions. On a relative basis, publicly-traded REITs are well-positioned in 2018, not only from the fundamentals picture, but from a value perspective.

NREI: What about non-traded REITs?

Aaron Halfacre: I think 2018 could be as strong, or stronger, than what we saw in 2017. Personally, I am excited about the industry changes in the non-traded REIT space. It is a good thing to see Blackstone and Starwood entering the space while some of the traditional fee-hungry shops have bowed out—a good advocacy trend for the individual retail investor. Institutional-grade real estate choices without the… fee structures of yesteryear, combined with greater valuation transparency and an investment that is not correlated to the broader equity market — that’s a positive story for all of us who aren’t part of the 1 percent.

‘AI isn’t just technology, it’s good judgment’: Cathy Bessant on why banks need humans (Tearsheet), Rated: A

Bessant is transforming B of A into a technology firm and leading it into a future that requires humans to apply immense computing power to immense amounts of data — an artificial intelligence future. But like any every other technology executive, she’s facing a shortage of talent with science, technology, engineering and math backgrounds. The result is often departments hiring from other departments.

Bank of America will spend $600 million this year on cyber defense alone. It employs 1,200 people whose jobs are dedicated to nothing else but information security, although the company makes that “the job of every single employee,” Bessant said. But the caliber of the talent the bank hires is just as important as the technology it invests in, since they’ll be the ones that determine how to work responsibly with AI.

Bank of America Enters Car Subscription Space With Volvo (Auto Finance News), Rated: A

All of Volvo Car Financial Services’ loan and lease originations end up on Bank of America’s balance sheet, Hollodick explained, including subscriptions to Care by Volvo, which starts at $600 a month for an XC40 compact crossover.

2,000+ bank branches closed in US in 2017 (Fintech Futures), Rated: B

US banks accelerated their pace of branch closures in 2017, shutting down 2,069 locations (an 18% increase compared to 2016), according to CoStar, a US-based commercial real estate news site.

3 Industries that can benefit from alternative credit data (MicroBilt), Rated: A

Although alternative credit remains a murky, unfamiliar concept to some, its adoption is slowly but steadily spreading. Some sectors may be particularly well-positioned to benefit from its use, and businesses under those umbrellas should consider adopting them if they haven’t yet done so.

Rally Rd collects $ 2.6 mln seed (PE Hub), Rated: A

Rally Rd., A marketplace for making investments in collector cars the same way you buy & sell stock, announced that it has raised a $2.6 million seed round investment from leading venture capital firms and individual investors.

The Unconventional Way This Man Paid Off $ 70,000 in Student Loans (Student Loan Hero), Rated: A

When Ray Laureano and his wife graduated from college, they left school with a staggering amount of student loans. Between the two of them, they were over $200,000 in debt.

Ray and his wife paid off over $70,000 in just one year.

A radical debt repayment strategy

Instead, he talked to each loan servicer and entered the lower-interest loans into forbearance; in other words, he paused payments on those loans.

With his other debt payments on hold, he put all of his extra money toward just one loan with the highest interest rate. When that loan was fully paid off, he tackled the next highest-interest debt, and so on.

Ray estimates that they will be debt-free by March 2020.

Enacomm Inks Reseller Agreement with Telvoyant (GlobeNewswire), Rated: B

Data intelligence and advancements in communications technologies are helping financial institutions dramatically improve the customer self-service experience. Enacomm, Inc., a leading provider of intelligent interactions and customer authentication technologies for banks, credit unions and credit card companies, today announced a new partnership with Telvoyant, a premier telecom consulting firm providing comprehensive telecom solutions for business, non-profit organizations and government institutions. Through a reseller agreement between the two companies, Telvoyant’s bank and credit union customers will be able to take advantage of Enacomm’s VPA (Virtual Personal Assistant) banking and the Enacomm Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

United Kingdom

What will RateSetter look like without unsecured business lending? (P2P Finance News), Rated: AAA

Consumer loans still make up the lion’s share of RateSetter’s £2.2bn loan book, while its commercial arm – both secured and unsecured – makes up 9.8 per cent, equating to £223.4m.

Of 2,213 commercial loans in total, including those that have been paid and repaid, 1,622 were unsecured and 591 secured as of the end of last year.

But its secured loans tend to be larger. 42.5 per cent of the value of RateSetter’s commercial loan book are listed as unsecured. This represents £95.1m worth of unsecured business loans compared with £128.2m of secured business loans.

UK Federation Of Small Businesses Says AltFin Is Just Heating Up (PYMNTS), Rated: A

The not-for-profit Federation of Small Businesses (FSB) has been a vocal proponent of faster SMB payment times, greater access to more robust banking services and tighter regulation in support of small businesses across the U.K. Most recently, the FSB announced plans to join the alternative finance world and establish the FSB Funding Platform, a marketplace lending portal through which small businesses can access funding from more than 100 lenders.

The FSB’s own research on small business finance, outlined in its Q4 FSB Voice of Small Business Index, found that fewer SMBs were concerned about their access to finance in Q4 2017 than they were in the same quarter of 2016. For the first time since Q1 2012, the FSB’s credit availability index has surpassed its credit affordability index.

And yet, according to the report, small business confidence fell into negative territory, with 73 percent of SMBs reporting a rise in the cost of doing business.

Does cutting-edge technology require a new approach to insurance? (techworld), Rated: A

Digital Risks, an insurtech startup launched in 2014, focuses solely on providing insurance to startups working in the digital, media and tech space.

“We insure things like challenger banks, peer-to-peer lending, payments, medtech, teleadvice, fraud detection, cyber security software, and sharing economy businesses,” Rose adds. “The general focus is around technology.”

Digital Risks doesn’t provide insurance itself – rather, it acts as a broker between companies and a group of about 20 different underwriters.

Lendinvest backs £12m Leeds-based PRS scheme (Specialist Lending Solutions), Rated: B

The specialist property finance lender has completed a £12.5m financing deal with KMRE Group to build 111 new homes in Kirkstall, in a private rental sector (PRS) scheme.

The whole development will be managed as a PRS scheme, and was forward sold before construction commenced to a £300bn investment management group.

International

AltFiData Predicts Strong Growth for Marketplace Lending in the US in 2018 (Lend Academy), Rated: AAA

Today, leading data analytics provider for marketplace lending, AltFiData, released the total origination numbers for the UK, Europe and the USA. They are predicting solid growth for the industry in all three regions in 2018. The new loan volume for the USA in 2018 is expected be $38.9 billion, a year on year increase of 46%.

Still, I think 46% growth is a little on the high side for the four companies covered here but I expect we will get close to those numbers. Interestingly, AltFiData is expecting the UK industry to grow at 43%, slightlty slower than the USA, and Continental Europe to grow at 73% off a much smaller base.

Investing on the Mintos Secondary Market – Hint 2 – Buying overdue loans at discount (P2P-Banking), Rated: AAA

I get a result of 349 loans with various discounts and an YTM of up to 14%. Not surprising for me, many of the loans listed at the top are Mogo loans.

Source: P2P-Banking

If these loans do pay up and then run till regular maturity date, then he recieves a yield of 12.4% to 13.8%. Decent, but not very high compared to other Mintos loans.

However there is a chance of at least 50% that these loans will default and are bought back within the next 30 days. If that happens to a loan, that a buyer bought at 0.3% discount, it will boost his yield very roughly by more 3.6% (0.3% for 30 days multiplied by 12 to get annual effect). Likely it is more because the next payment date will be less than 30 days away. But even taking 3.6% the yield will be around 17%.

The loan with the 0.6% discount would mean a boost of very rougly 7.2% yield on top (0.6*12). So that could lead to about 20% yield.

Global Venture Capital Investment Market – Top 3 Trends by Technavio (BusinessWire), Rated: A

According to Technavio analysts, the global venture capital investment market will grow at a CAGR of more than 27% during the forecast period.

The three emerging market trends driving the global venture capital investment market according to Technavio research analysts are:

  • IPO market gains momentum
  • Growing portion of new investments in China and India
  • Increased participation from mutual funds, hedge funds, and banks in the VC market

In 2017, a lot of major startups such as Cloudera, China Rapid Finance, and Okta came up with IPOs. Most of the companies issuing IPOs were technology-focused and were software and cloud service providers.

During the forecast period, the Americas was the leading venture capital investment market with a market share of more than 56%, with the US being the leading country in the region.

Source: BusinessWire

Crowdfunding – Raising Billions (BW Disrupt), Rated: B

Equity crowdfunding has also become legal in countries like United Kingdom, France, Austria, Germany, Netherlands, Australia, Hong Kong and the U.S. with President Obama legalizing the equity crowdfunding by signing the JOBS Act into law.

Source: BW Disrupt

The Crowdfunding statistics for 2017 reports a global amount raised for $34 billion, broken into $25 billion through peer-to-peer lending, $5.5 billion through reward and donation and $2.5 billion through equity crowdfunding. The projection of the crowdfunding industry is expected to grow over $300 billion by 2025.

Australia/New Zealand

Big banks, biased financial advisers, and the three tricks to avoid them (The NewDaily), Rated: AAA

This week the big banks got more bad press when the corporate regulator ASIC declared that their huge networks of financial advisers were failing to operate in the best interests of their customers.

The report, which covered the financial advice arms of the Commonwealth Bank, Westpac, ANZ, NAB and AMP, found that an astonishing 75 per cent of advice provided was not in the best interests of customers.

And in 10 per cent of cases, consumers were actually worse off than they would have been if they hadn’t got advice.

PledgeMe announces new crowdlending-inspired platform in the works (bizEDGE), Rated: A

PledgeMe has jumpstarted the year with the announcement of the launch of a new lending platform they will be offering.

The Ta Koha platform will be based on a crowdlending model in partnership with the Māori Women Development Inc (MWDI).

India

Innovative products pay off for e-lending startups (ET Rise), Rated: A

After payments, digital lending as a space is at the vanguard of innovations, driven by a clutch of startups seeking to take formal lending to a customer segment that never got easy credit from banks.

From a digital EMI card to instant personal loans and a line-of-credit product, new-age disruptors such as Stashfin, Kissht, and Antworks, along with their established peers Paysense and Moneytap, are trying to generate traction through innovative lending products. Mumbai-based Kissht is financing consumption requirements of low-income households with a digital EMI card that can be used to make payments directly.
“There are around 40 online merchant partners and 2,000 points of presence accepting the Kissht EMI card across businesses like electronic stores, furniture shops and others,” said Krishnan Vishwanathan, chief executive of Kissht. Another Delhi-based startup, Stashfin, is also targeting consumers with income levels between ?20,000 and 1 lakh per month.
Asia

W11.2tr earmarked for midrange borrowers (The Korea Herald), Rated: AAA

South Korea’s Financial Services Commission said Thursday it plans to circulate a combined 11.2 trillion won ($10.6 billion) this year for local retail borrowers that hold midrange credit scores while having trouble finding corresponding loans.

The FSC pledged to pour a combined 8 trillion won into state-run loan products sold at banks, including those designed for refinancing. The remaining 3.2 trillion won will be spent to encourage private banking institutions to develop and sell midrange loan products this year, and the volume of support is expected to gradually increase, according to the plans.

By 2022, the government’s annual financial support for five commercial banking groups — Shinhan, KB, KEB Hana, NH and Woori — will increase by 2.5 times to 2.4 trillion won from 2017, according to the plans. Direct banks Kakao Bank and K Bank received 900 billion won in 2017, and the volume will increase by 3.5 times to 3.1 trillion won in 2022.

Africa

SelfKey Receives Regulatory Sandbox License in Mauritius (Crowdfund Insider), Rated: B

SelfKey, a blockchain-based digital identity firm, has obtained a Mauritius’ Regulatory Sandbox License (RSL), according to information provided by the company. This license will allow SelfKey to develop their self-sovereign digital identity wallet and financial services marketplace under supervision and scrutiny of the Board of Investment of Mauritius.

Authors:

George Popescu
Allen Taylor

Friday October 20 2017, Daily News Digest

Chinese IPOs

News Comments Today’s main news: Betterment achieves private unicorn status. Venmo available at 2 million retailers. PayPal sees profits rise after targeting mobile payments growth. Finova secures $102.5M in equity, credit facility. Lendy investors see 100M GBP in returns. PayKey raises $10M for Asian expansion. Lendex.io plans ICO. Today’s main analysis: Qudian’s IPO underlines China’s fintech appetite. Mind the GAP in the […]

Chinese IPOs

News Comments

United States

United Kingdom

China

European Union

Australia/New Zealand

India

Asia

MENA

Canada

News Summary

United States

Betterment is now valued at $ 1 billion in private market trading (Business Insider), Rated: AAA

Betterment, a roboadviser with $11 billion under management, is considered a unicorn in the private markets.

Preferred shares of Betterment are being offered at a price of $11 on EquityZen, an online marketsite for shares of private companies, according to a list of investment opportunities seen by Business Insider. That gives Betterment an implied valuation of over $1 billion.

EquityZen, a four-year-old New York-based company, provides a platform on which private company investors can sell their shares to accredited investors. It serves 20,000 investors and has secured $6.5 million in funding.

Venmo users can now pay at over 2 million retailers (Business Insider), Rated: AAA

PayPal is giving over 2 million retailers in the US the ability to accept Venmo payments, marking the firm’s most aggressive move yet to 

PayPal tops profit estimates, lifts target on mobile payments growth (Reuters), Rated: AAA

Sharp growth in mobile payments led PayPal Holdings Inc (PYPL.O) to report a better-than-expected third-quarter profit on Thursday and lift its guidance for earnings through the rest of the year.

The San Jose, California-based payments company has been working hard in recent years to expand its reach to new customers through partnerships and acquisitions, particularly in mobile payments. Those deals are clearly starting to bear fruit, analysts said.

PayPal shares were up 3.9 percent at $69.89 in after-hours trading following the results.

The company’s adjusted profit rose 32 percent during the third quarter to $560 million, or 46 cents per share, beating the average analyst estimate of 43 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 21.4 percent to $3.24 billion.

Its mobile payments volume jumped 54 percent during the third quarter compared with the year-ago period, to about $40 billion. Total payments volume rose 31 percent to $114 billion.

Florida Fintech Finova Financial Secures $ 102.5 Million In Equity & Credit Facility Funding (Crowfund Insider), Rated: AAA

Florida fintech firm Finova Financial announced on Tuesday it has secured $102.5 million in equity and credit facility funding. The financing was led by CoVenture with participation from existing investors.

Finova’s current digital products include its Car Equity Line of Credit (CLOC) and Automobile-Secured Prepaid Card. Its services are available in Florida, California, Tennessee, New Mexico, South Carolina, Oregon and Arizona.

Fundrise Growth eREIT Files to Raise $ 45.7 Million (Crowdfund Insider), Rated: A

The Fundrise Equity REIT, or Growth eREIT, has filed with the SEC to raise up to $45,730,440 under Reg A+.  The amount includes $11.8 million from a previous offering circular.

The Growth eREIT most recently paid an 8% dividend.

The first Growth eREIT sold out at the maximum amount under Reg A+ of $50 million.

Investors may purchase shares in the eREIT with at a minimum $1000. Under Reg A+, both accredited and non-accredited investors may participate.

LILY Partners with Affirm to Offer Drone Buyers Pay Over Time Options  (PR Newswire), Rated: A

Mota Group’s LILY® division today announced a new flexible time-payment option, partnering with Affirm to offer shoppers in the United States the flexibility of buying now and making simple monthly payments for their purchases.

This new option is in addition to LILY’s existing payment methods of credit and debit cards, Bitcoin, and PayPal, making LILY the only consumer drone company to offer all five methods of payment.

LILY customers may select Affirm at checkout and view their monthly payments up front before making their purchase. More information and purchasing options are available at www.lily.camera/affirm.

Clearbanc, Michele Romanow work with Facebook for easy small business financing (Financial Post), Rated: A

“The number one thing that prevents entrepreneurs from growing big businesses is access to capital,” says tech entrepreneur and CBC Dragon Michele Romanow. She’s looking to change that for e-commerce businesses.

Today, Romanow’s Clearbanc, which provides revenue-based financing to online businesses, announced a new program with Facebook that will give the social media giant’s five million online merchants across Canada and the U.S. access to up to $500,000 in financing without having to give up any equity or fill out any paperwork or even undergo a credit check.

Facebook advertisers that have been operating for more than six months and are looking for money to grow, and have positive economics on ad spends — meaning when they buy an ad they are making a positive margin on selling that product — can apply online through Clearbanc’s Chrged program, which provides tools to help businesses scale, and connecting their Facebook Ad Account and payment processor.

Perspectives from Around the Industry on CFPB’s Small Dollar Rule (Lend Academy), Rated: A

Sasha Orloff, CEO and Co-Founder of LendUp:

As a socially-responsible lender on a mission to improve credit access for underserved consumers, LendUp shares the CFPB’s goal of reforming the troubled payday lending market. Since our founding, we’ve been a strong advocate for eliminating the predatory practices that have defined the short-term lending market and are pleased that many of these reforms are included in the rule.

At a time when more than half of Americans are unable to access traditional banking products, it is critical that we offer consumers as many safe credit options as possible.

Ken Rees, CEO of Elevate Credit:

We believe the CFPB got it exactly right with the rule.

The rule will dramatically change the landscape of non-bank, non-prime lending in this country. In addition to reducing the number of payday lenders and title lenders, the requirements for advanced underwriting and reporting will push most of the mom-and-pop, primarily brick-and-mortar lenders out of existence.  We believe that the growing need for non-prime consumer credit will be filled by more sophisticated technology-enabled online lenders.

Lisa McGreevy, President & CEO, Online Lenders Alliance (full response here):

The biggest problem with the rule is the very prescriptive nature for a product that is $500 or less. There is no room for any new products or innovation in this space.

APR is an irrelevant measure for very short term loans like this. The CFPB quotes that more than 80% of these loans are rolled over for another loan within the month. That is unacceptable.

CFPB Consumer Advisory Board to meet Nov. 2 (National Law Review), Rated: B

The CFPB has published a notice in the Federal Register announcing that a meeting of its Consumer Advisory Board will be held in Tampa, Florida on November 2, 2017.

Presumably, the loan discussion will focus on the CFPB’s final payday loan rule.

Climb Credit Enters Into $ 130 Million Loan Purchase Agreements (PR Newswire), Rated: A

Climb Credit, a student lending company that expands access to quality education for the new economy, today announced that it has entered into agreements with investors to purchase $130 million of student loans originated by Climb Credit.

The transaction will enable Climb Credit to continue expanding its student loan programs beyond its current network of software development, UI/UX design, robotics, welding, nursing, and other skills-based programs in additional high-earning fields. Climb Credit’s focus is to transform the higher education paradigm by providing better access and affordable funding to students to attend schools that consistently demonstrate a strong return on investment (ROI) for their students.

Roostify Unveils New Decision Builder to Improve Pre-Application Consumer Experience and Drive Leads (PR Newswire), Rated: A

Roostify, a provider of automated mortgage transaction technology, today announced the upcoming release of Decision Builder, a new tool that will enable lenders to easily provide their prospective applicants with a clear, easily-digestible view of their loan options, based on the lender’s actual product and pricing system. The company will be offering live demonstrations of Decision Builder for the first time at the upcoming MBA Annual Convention.

The Decision Builder tool can be placed on a lender’s existing website, and features a handful of dropdown questions, such as the desired loan amount, the expected down payment, and the ZIP code of the house to be purchased. With that information, Decision Builder will generate a series of loan options based on the lender’s product and pricing system, showing the consumer what products and rates they would qualify for. Each option is presented in a visual, easy-to-understand interface with clear explanation of the benefit of the loan product – for example, a lower monthly payment or low total interest. From there, the consumer can more easily evaluate which loan product is right for them.

With accurate, realistic loan information from the lender’s website, the consumer can carefully consider their options on their own time, without the pressure of having to decide within the limited window of an appointment with a loan officer. When they’ve made a decision, the interface includes a convenient option to move forward on their chosen loan with the click of a button.

How consumer banking leaders are embracing AI (American Banker), Rated: A

Artificial intelligence is becoming a competitive advantage that will force institutions to incorporate it, according to participants at the BankAI conference this week.

“People will have to adopt artificial intelligence,” said Brian Pearce, senior vice president of artificial intelligence at Wells Fargo. “It will have to become part of everyone’s set of tools.”

What banks are doing

Wells Fargo is piloting several chatbot technologies, though it has yet to suggest a launch date for any of them.

The bank has a team dedicated to bereavement — they take these phone calls and help executors manage the estates of the newly deceased.

Bank of America

Michelle Moore, head of digital banking at Bank of America, shared an update on the virtual assistant it announced a year ago, erica. It’s now in use by 300 employees. Sixty percent of the time, employees choose to interact with erica by voice, though they could also use chat, Moore said.

Ally Bank

Ally Bank was one of the first to launch an AI-based virtual assistant two years ago: Ally Assist, which is based on technology from Personetics.

Most people who commonly interact with Ally Assist are heavier transaction customers, Morais said.

The bank is also using AI in the back office. For instance, the bank used robotic process automation to streamline an exception process that had required back-office staff to navigate multiple screens and type hundreds of keystrokes. It now takes three clicks.

BBVA

Robert Sears, executive vice president and global head of product for new digital businesses at BBVA, said the bank is applying AI in credit decisions and focusing on explainability.

The Top 10 Most Affordable MBA Programs In The United States (BusinessBecause), Rated: A

For those studying abroad, organizations like Prodigy Finance—a borderless, peer-to-peer lending platform—provide international, post-graduate loans.

Student Loan Hero looked at 116 of the top American business schools to identify which programs are most financially affordable, taking into account the average debt of graduates, average starting salaries, and annual tuition fees.

Rank Business School Average Indebtedness Percentage of graduates with debt Annual tuition and fees Average starting compensation
1 Lehigh University $0 0 $19,350 $86,667
2 Oklahoma City University $11,331 9 $16,230 $101,090
3 University of Texas —​ Dallas $7,132 25 $19,048 $83,000
4 Missouri University of Science and Technology $11,386 19 $15,402 $66,667
5 Oklahoma State University (Spears) $18,728 22 $12,121 $70,700
6 University of Missouri (Trulaske) $20,495 20 $14,599 $64,252
7 Florida State University $14,379 31 $18,693 $67,308
8 West Virginia University $18,608 33 $9,450 $58,488
9 Louisiana State University—​Baton Rouge (Ourso) $17,900 27 $17,800 $62,429
10 West Texas A&M $18,500 54 $9,600 $93,625

Jay DesMarteau, head of commercial bank specialty segments at TD Bank, said early-stage businesses will often use their funds for operational necessities such as buying inventory and building products.

Isaac Rodriguez, CEO of Provident Loan Society, notes that as a not-for-profit collateral lender, most of his organization’s loans are made for short-term expenses such as meeting payroll.

David Reiling, CEO of Minnesota-based Sunrise Banks, confirmed this trend, noting that many of the bank’s small business customers now use their borrowed capital for technology purchases.

For example, according to a recent survey from TD Bank, 69 percent of small business owners either believe they do not have a business credit score or believe that business credit scores do not exist.

Of course, an alternative lender may be a better option if you want an even smaller loan or if you don’t qualify for a traditional bank loan.

Has Dating Become a Financial Audition? (24/7 Wall St.), Rated: A

Student loan marketplace and refinancing website LendEDU polled 1,000 Americans to discover their personal finance preferences when it comes to dating.

The big question, though, was this one: “Would you consider [annual income, student loan debt, or credit card debt] to be a critical factor when deciding to date someone?”

Just over 30% of respondents said that credit card debt was a critical factor in deciding whom to date, compared with just less than 19% who saw annual income as a critical factor and 12% who saw student loan debt as critical.

OCC’s Noreika: National Bank Charters Should Be an Option for Fintech Firms (ABA Banking Journal), Rated: B

Acting Comptroller of the Currency Keith Noreika today reiterated his view that companies providing financial products and services should be subject to the same regulations and examinations as traditional banks, while emphasizing that a path should exist for these companies to apply for a national bank charter.

Zoinks! 6 Ways Home Buyers Scare Off Sellers (Realtor.com), Rated: B

So, in case you want to make sure you aren’t doing anything that might send up red flags, here are some things buyers do that scare off sellers.

For instance, a new, fly-by-night online lender might give some sellers the heebie-jeebies. So make sure to ask your agent (and also the seller’s agent) whether there’s a certain lender they trust.

Online Lender OppLoans Appoints Data Everywhere Founder Andy Pruitt as New CTO (Crowdfund Insider), Rated: B

Online lender OppLoans announced on Thursday it has appointed Andy Pruitt to the role of CTO. Pruitt is a hands-on technologist who has helped start and grow three Chicago-area software companies. He isfounder of Data Anywhere, a data management company.

State rolls out refund program, checks on the way (KFOR), Rated: B

CashCall refunds are still on the way.

By the time Wanda took action she had already paid online lender, CashCall, $1800 dollars on an $800 dollar loan and she didn’t even get her loan through CashCall.

The agreement gives the state one million dollars to distribute to customers.

United Kingdom

Lendy has repaid £100m to investors this year (P2P Finance News), Rated: AAA

LENDY has announced that it has returned £100m to investors over the last year alone, as it celebrates its fifth birthday this week.

The peer-to-peer property platform said on Thursday that this was a 120 per cent year-on-year increase and that it has now repaid £183m to investors since launch.

Lendy recently announced the repayment of a £7.92m loan, one of the largest seen in the UK’s P2P sector to date. The facility had been repaid ahead of schedule and delivered annual returns of 12 per cent to investors.

First Associates Receives FCA Authorization to Service Loans in the United Kingdom (First Associates), Rated: A

First Associates Loan Servicing announced that they have received Financial Conduct Authority authorization to undertake debt administration and debt collection in the United Kingdom.

In addition to having a stellar reputation for their loan servicing support and being the only loan servicer in their class to earn Morningstar Credit Ratings’ highest operational assessment ranking1, First Associates also offers lending support solutions to their roster of industry-lending clients including:

  • Capital Markets Support
  • Pre-Funding Support
  • Post-Funding Support

IFISA investments ‘to take off’ in 2018 (P2P Finance News), Rated: A

2018 MAY be the year in which the Innovative Finance ISA (IFISA) finally takes off, an industry expert has suggested.

Neil Faulkner, chief executive and founder of peer-to-peer analysis firm 4th Way, noted that the small platforms that have already launched IFISAs have seen massive boosts to their lending volumes, and suggested that the amount of money in IFISAs “will go up many-fold” when the major platforms have their own accounts on offer.

Take-up of IFISAs has been relatively slow so far, with HMRC figures suggesting that just £17m was invested across 2,000 accounts in the 2016-17 tax year, though these have been queried by P2P firms.

Othera ​announces ​new ​contract ​with ​U.K.’s ​Lendhaus (LendIt), Rated: A

Announced ​at ​Lendit ​in ​London, ​Othera, ​a ​blockchain ​software ​provider ​for ​the ​financial ​services industry ​has ​just ​signed ​to ​their ​proprietary ​blockchain ​platform, ​Lendhaus, ​a ​London- ​based ​loan originator ​providing ​syndicated ​lending ​for ​the ​commercial ​real ​estate ​sector.

HSBC launches integrated financial offering through Bud and first direct (IBS Intelligence), Rated: A

HSBC UK has announced a partnership with Bud through first direct to offer an integrated offering  of financial services products and tools across the market.

This first direct trial kicks off in December and it includes proprietary algorithms – Market+ – to suggest the most suitable financial and non-financial products and services based on individual needs.

Britain’s fintech BOOMS: Record levels of global investment ploughed into sector (Express), Rated: A

More than £825million has been pumped into the UK fintech since January – double the amount raised in the same period in 2016 – proving the vote to leave the European Union (EU) has not turned investors off Britain.

In fact, since the EU referendum vote, UK fintech companies have raised more than £1billion, according to research by London & Partners.

The capital has been the major winner from investment, receiving around 90 per cent of all venture capital investment.

London-based firms Funding Circle, Revolut and Receipt Bank each raised tens of millions of pounds of investment this year.

3 Ways You Can Use Social Media to Get a Business Loan (NetNewsLedger), Rated: B

There are several online lenders available to offer you loans; they use your social media data to take a decision. Kabbage is the most popular loan landers working online. Kabbage offers the loan to the small businesses and keeps the cash flow in the different businesses. Before giving you the loan, they will ask you to get the access to your social media accounts.

Mark Arnold – a branding expert advises the credit unions and banks check a business credibility and see how effectively they are grabbing the market through social media. These businesses primarily look at different business especially at LinkedIn pages to determine the loan eligibility.

Use some crowdfunding websites to raise money for your business-like GoFundMe, Kickstarter, and Indiegogo.Share links to your crowdfunding webpages on your social networks on Twitter and Facebook and motivate people to share on their social networks.

China

Qudian’s New York IPO underlines appetite for China’s fintech (Financial Times), Rated: AAA

Qudian, one of China’s largest online lenders, had a debut to remember on the New York Stock Exchange this week. Its shares closed up 22 per cent, making a multi-millionaire of founder and chief executive Min Luo.

The company, which raised $900m in the share sale, is the latest to underline investors’ appetite for the collision of lending and technology that has given rise to the Chinese fintech sector. Two days before Qudian’s debut on Wednesday, Chinese peer-to-peer lender Ppdai announced plans to raise $350m in New York, and at least a dozen similar issuers are preparing flotations.

About 40 per cent of consumers in China make payments online, and 14 per cent have gone on the web to borrow money, according to DBS.

Qudian’s IPO — the fourth-biggest in the US this year — comes on the heels of Chinese online insurer ZhongAn’s hotly received $1.5bn IPO last month in Hong Kong. ZhongAn’s stock is up 34 per cent from its debut.

Source: Financial Times

Wary of online lending, regulators have strictly limited online financial products such as high interest “payday loans” and microloans by capping interest rates at 36 per cent. Last May, new restrictions wiped out scores of P2P lending networks in China, after worries that it was fuelling real estate speculation and subprime lending.

Source: Financial Times

A rash of bankruptcies hits Chinese lenders backed by state firms (The Economist), Rated: AAA

In the past two months at least seven online lenders backed by SOEs have collapsed. It was a business none should have been in, far removed from the industries they were supposed to focus on. The money potentially lost is trivial—roughly 1bn yuan ($150m), compared with government assets worth more than 100trn yuan. Still, these cases highlight how hard it is for the party to stamp its authority on the vast state sector.

The troubled SOEs include distant subsidiaries of the national nuclear company, an aviation company and a big energy company in Shanxi, a northern province. They had acquired stakes, from as little as 20% up to 100%, in online peer-to-peer (P2P) lending platforms.

They were “marriages of convenience”, says Joe Zhang, chairman of China Smartpay, a financial-services company.

Source: The Economist

Supply chain finance tipped to become US$ 2.27tn market for Chinese internet firms by 2020 (SCMP), Rated: A

China’s supply chain finance sector is now being tipped to be worth a whopping 15 trillion yuan (US$2.27 trillion) by 2020, and the mainland’s booming internet-based businesses are lining up to grab their own share of it.

And despite the reverberations from the recent peer-to-peer (P2P) lending crisis, a marriage between information technology and financial services is continuing to play a vital role in transforming Chinese business.

That 15 trillion yuan figure was calculated by Forward Business, a Shenzhen-based consultancy focusing on studies of IT and other emerging industries, which also suggests mainland banks granted a combined 12.65 trillion yuan in new loans to the budding sector.

But the grim reality remains, that the larger commercial lenders remain belligerently reluctant to grant small loans to businesses and individuals, who present anything like a risk.

Established in 2013, Tiandihui is an online platform where cargo and trucks are matched.

It s network stretches across 50 mainland cities and it handled some 64 billion yuan worth of transactions last year. The company, which charges fees for its matchmaking, has yet to break even.

European Union

Israeli fintech startup PayKey raises $ 10 million to expand in Asia (Tech.eu), Rated: AAA

Israeli fintech startup PayKey has raised $10 million in its Series B round led by MizMaa with participation from SBI Group, Digital Ventures, SixThirty, Fintech71, and The FinLab.

The new funds will be invested in global expansion, namely in the Asian market. Several of the investors in this round are Asian based while the startup graduated from the Singaporean FinLab accelerator.

Mind the GAP in the Lending GAP (AltFi), Rated: AAA

The Lending Gap has been one of the most quoted negative consequences of the financial crisis. Many political efforts have been conducted to stimulate the economy. New business models (e.g., private debt, direct lending, alternative finance, peer to peer) were born with the explicit aim and mission to “fill the gap”.

Where are we today, 10 years after the crisis?  Are borrowers still suffering? What investment opportunities are out there, if any?

  • FACT #1. The lending gap has been reduced, and the drivers have changed.
  • FACT #2. New alternative lending opportunities have opened up.
  • FACT #3. Banks are in better shape today, but exposed to the digital revolution and various structural challenges.
Source: AltFi
  • FACT #4. Credit expansion has resumed since YE 2014.

P2P auto-lending is risking investor ethics and returns (P2P Finance News), Rated: A

THE MOVE towards auto-lending among some peer-to-peer platforms may limit interest rates and be a stumbling block for investors worried about the type of businesses they lend to, a European automated P2P firm has said.

Despite being automated itself, Latvia-based Robo.cash has claimed lenders may be missing out on higher interest rates with a passive investment strategy.

As an example, Funding Circle recently moved from manual to auto-lending,now offering a conservation option at 4.8 per cent or a balanced approach at 7.5 per cent.

Australia/New Zealand

Australian marketplace MyDeal.com.au launches fintech loan offering for retailers (Australian Anthill), Rated: AAA

Online retail marketplace MyDeal.com.au has launched business loan offering MyDeal Marketplace Loans to accelerate the growth of their listed retailers.

Retailers who list their products through the MyDeal Marketplace can now apply for a business loan of up to $250,000 directly through their supplier management system and in many cases receive the funding in under 24 hours.

This offering is in partnership with fintech business Prospa, Australia’s leading online lender for small business.

Robo-Advice Decision Will Improve Kiwis’ Financial Fortunes (Scoop), Rated: A

“We’ve long seen the potential for technology to deliver better personalised financial advice to Kiwis,” said Ramesh Naran, Senior Manager, Digital and Innovation at Kiwi Wealth. “With this decision by the FMA, we can go through the application process and turn Future You into the powerful, personalised tool we’ve always wanted it to be. It’s already on its way to becoming the platform that’ll set the industry standard.”

Mr Naran said the FMA’s approach recognises the ability of technology to improve financial understanding and outcomes for New Zealanders.

India

What do RBI regulations mean for peer-to-peer industry (Financial Express), Rated: A

In a much-awaited move, RBI issued guidelines to govern peer-to-peer lending or P2P. This is a landmark decision that will go the distance in achieving the objective of financial inclusion.

For the time being, RBI has advised NBFC P2Ps not to offer or arrange any credit enhancement or credit guarantee. Against this backdrop, the principal protection fund, which has been an exclusive offering of i2iFunding so far, may need some tweaking. At present, we are neither guaranteeing any compensation from the third-party nor are we making a claim of apportioning our capital for the purpose. Therefore, we will approach the regulator to get more clarity on this and would do our best in the interest of members of the platform. Existing investors need not hit the panic button.

Why State Bank of India is afraid of small but nimble fintech companies (ET Markets), Rated: B

More than 24,000 branches and 42 crore customers make the State Bank of IndiaBSE 0.00 % the goliath of all banks by sheer size and physical presence but its new chairman Rajnish Kumar is worried about the competition from nimble fintech companies.

“Today, the risk is the disruption that is caused by the technology ,“ Rajnish Kumar, chairman, State Bank of India told ET in an interview. “We have to be very alert to this challenge. Protecting the turf and meeting the challenges from all the new fintech companies is the priority .“

Wallets and other payment mechanisms have become the preferred mode of payments as people walking into branches have dwindled.

Asia

Kazakhstan’s Lendex.io plans ICO in early 2018 (Blockchain News), Rated: AAA

Founded and developed in Kazakhstan, the biggest economy of Central Asia, FinTech startup Lendex has announced plans for ICO crowdsale to finance the launch of a cross-border P2P (peer-to-peer) lending platform for underbanked consumers in Central and South East Asia.

MENA

Transitioning to a digital future in the Middle East (TXF News), Rated: AAA

Global fintech investment has risen phenomenally in recent years – from $3 billion in 2013 to $24.7 billion in 2016.

Although less than 0.1% of fintech investment originates in the Middle East, growing influence from a soaring millennial population, and increasing expectations for digital solutions, are giving rise to a burgeoning number of fintech initiatives throughout the region. In fact, the number of fintech companies in the Middle East and North Africa (MENA) region is expected to surge – from 105 at the start of 2016 to 250 by 2020. And fintech investment is predicted to grow by 270% in the Middle East this year, indicating the huge potential for digital change –and a strengthening drive to deliver it.

Payments

The majority of fintech innovation so far has been in the payments sector. Although fintech has already made a mark in the retail payments space – with new companies such as the UAE’s Beehive, an online marketplace for peer to peer lending, and Telr, an online payment gateway for emerging markets – effecting change in the corporate sector is more challenging. This is primarily due to the often more complex, cross-border nature of corporate payments and the accompanying regulations and security requirements.

SWIFT gpi already has the backing of over 110 banks across the globe – including BNY Mellon – which represents over 75% of SWIFT’s global payments traffic. The UAE’s Mashreq Bank was the first Middle Eastern bank to join SWIFT gpi earlier this year.

Trade finance and fintech development

AI, for instance, offers solutions to improve documentation flow and cut the need for time consuming processes. Two types of AI that could benefit trade finance are optimal character recognition (OCR) and intelligent character recognition (ICR). OCR converts images of paper documents into machine-encoded text, enabling documents used in trade transactions to be verified automatically; while ICR is able to learn and identify patterns of behaviour embedded in trade documentation. These capabilities would both help to improve efficiency and reduce costs in the supply chain.

Canada

They launched their Toronto-based venture, MagneTree Books, in the spring of 2015 with the help of a Kickstarter campaign for presales of their inaugural book.

Neither Josie, who was at the end of a maternity leave, nor Ronny, who worked for a humanitarian aid organization, had much savings to fund their startup or the first run of books, which together rang in at more than $65,000. A bank loan wasn’t an option; neither entrepreneur was in a position to cover the debt if something went awry.

Online sales have been slow – just 15 per cent of their books are sold on the web. But corporate gifting and wholesaling has proven fertile. Still, the company has yet to break even. Profit on a run of books rings up at about $7,000.

But they have a big problem: no cash to fund the second book’s production and marketing. Neither sibling is able to personally lend the company money, and they have begun crowdfunding once more.

Expert advice

Mr. Zakharia notes that the amount of money the siblings need to fund their second book is relatively small at between $7,000 and $10,000. Still, their inability to make a personal loan or secure a bank loan will make them unattractive to traditional lenders. “Banks are going to be very conservative,” Mr. Zakharia said.

One option the pair might consider is Lending Loop, a peer-to-peer lending marketplace that might be their fastest route to raising cash. “Because it’s such a small amount, I think it would be pretty easy to raise,” he said.

Authors:

George Popescu
Allen Taylor

Thursday August 31 2017, Daily News Digest

European fintech

News Comments Today’s main news: SeedInvest to host live crowdfunding at LendIt Europe. Funding Circle says ‘good-bye’ to smaller brokers. DBRS upgrades SoFi Professional Loan Program Transactions. Credibly to manage BizFi’s portfolio. Fundrise re-opens Income eREIT. Laplanche to keynote at LendIt Europe. Today’s main analysis: France, Sweden scooping up bigger share of Europe’s fintech deals since Brexit. Today’s thought-provoking articles: France, […]

European fintech

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

Middle East

Africa

South America

CARICOM

News Summary

United States

DBRS Upgrades and Confirms SoFi Professional Loan Program Transactions (DBRS), Rated: AAA

Of the 36 outstanding publicly rated classes reviewed, 24 were confirmed and 12 were upgraded.

Issuer Debt Rated Rating Action Rating Trend Notes Published Issued
SoFi Professional Loan Program 2013-A LLC Post-Graduate Loan Asset-Backed Notes Upgraded AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2014-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Upgraded AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2014-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Upgraded AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2014-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Upgraded AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2014-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Upgraded AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Upgraded AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Upgraded AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-D LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-D LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-2A Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-2B Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-2A Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-2B Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-D LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-D LLC Post-Graduate Loan Asset-Backed Notes, Class A-2A Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-D LLC Post-Graduate Loan Asset-Backed Notes, Class A-2B Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-E LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-E LLC Post-Graduate Loan Asset-Backed Notes, Class A-2A Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-E LLC Post-Graduate Loan Asset-Backed Notes, Class A-2B Confirmed AAA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-B LLC Post-Graduate Loan Asset-Backed Notes, Class B Upgraded AA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-C LLC Post-Graduate Loan Asset-Backed Notes, Class B Confirmed AA (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-D LLC Post-Graduate Loan Asset-Backed Notes, Class B Confirmed AA (low) (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-E LLC Post-Graduate Loan Asset-Backed Notes, Class B Confirmed AA (low) (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-B LLC Post-Graduate Loan Asset-Backed Notes, Class B Upgraded A (low) (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-C LLC Post-Graduate Loan Asset-Backed Notes, Class B Upgraded A (low) (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2015-D LLC Post-Graduate Loan Asset-Backed Notes, Class B Upgraded A (low) (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-A LLC Post-Graduate Loan Asset-Backed Notes, Class B Upgraded A (low) (sf) Aug 30, 2017 US
SoFi Professional Loan Program 2016-E LLC Post-Graduate Loan Asset-Backed Notes, Class C Confirmed A (low) (sf) Aug 30, 2017 US

CREDIBLY SELECTED TO SERVICE BIZFI’S $ 250M PORTFOLIO (Credibly Email), Rated: AAA

Credibly, a leading findata small and medium-sized business (SMB) lending platform, announced today that the company is now servicing BizFi’s $250 million portfolio and 5,200 merchants.  Since 2005, BizFi had been a leading capital provider to SMBs and in 2016 was one of nation’s top three largest originators of merchant cash advances.  Numerous SMB direct lenders vied for the BizFi portfolio. Credibly was chosen due to their proprietary data science driven portfolio management strategy.

Credibly also announced that it has crossed the $500 million milestone in capital deployed to tens of thousands of SMBs across the U.S.  This is separate from the $250M portfolio the company is now servicing from BizFi.

In addition to servicing the BizFi portfolio, Credibly is working with both sales partners and merchants to provide additional working capital to the businesses in BizFi’s portfolio. Credibly’s data science team has the ability to analyze BizFi’s twelve years of data and remittance history, which will allow Credibly to better service both the BizFi and Credibly portfolios. Further, BizFi’s data enhances Credibly’s risk management, scoring models, and portfolio management tools.

The Small Business Association (SBA) estimates that traditional banks still reject approximately 90 percent of SMB loan applications. Since 2010, Credibly has emerged as a proven platform that leverages data science and analytics to provide SMBs with a simple and intuitive way to access critical working capital.  The company addresses the fundamental capital needs of SMB owners across a broad credit spectrum and through every stage of a business’s life cycle.

Main Street SMBs across a wide variety of industries that include restaurants, retail stores, salons, spas, dry cleaners, auto body shops, and doctors’ offices, all rely on Credibly to secure the necessary capital they need to grow.

Fundrise Re-Opens Income eREIT (Crowdfund Insider), Rated: AAA

Fundrise, the very first real estate crowdfunding platform in the US, has re-opened its Income eREIT to investors.

According to Fundrise, the Income eREIT has performed quite well, so far. The Income eREIT has generated 10% or higher in annualized dividends since Q2 of 2016. As of Q3 2017, the fund has posted a 10.5% annualized dividend which compares favorably to the FTSE NARET Composite REIT Index at 4.2%.

Bills Being Introduced to “Fix” Decision in Madden v. Midland (Lend Academy), Rated: A

For a historical perspective you can read our coverage of the case at the below links:

An article in American Banker this week from Adam Levitin, professor of law at Georgetown University, provides his perspective on what the bills mean for the case.

Nat Hoopes, Executive Director of the Marketplace Lending Associationdisagreed with Levitin’s assessment. Here is what he had to say:

These bills are strongly pro-consumer. They will help ensure that consumers can continue to refinance their higher interest rate debts, saving consumers significant amounts of money through lower interest costs.  Furthermore, these bills clearly cannot facilitate predatory lending because they do not change the rate or terms on which any entity in this country (regulated at the state or federal level) can lawfully lend money.  The language of the bills simply reaffirms one of the fundamental principles of contract law — that valid loan contracts can be sold on the secondary market.

We have a situation created by the Second Circuit decision where responsible lending has been reduced in three states (NY, CT, VT). Demand has not been reduced in these states.

Trizic Drags Banks Into The Fintech Age With Automated Wealth Management (Benzinga), Rated: A

Trizic, the fintech company behind a B2B wealth management platform, has signed on as the technology provider to Fidelity National Information Servcs Inc FIS 0.21%, connecting the Bay Area startup with the banking sector.

Trizic Digital Advisor — an open-API platform for registered investment advisers, enterprise clients, banks and credit unions — is a product built from the ground-up, CEO Drew Sievers told Benzinga.

The platform’s features include trading, portfolio management, cash management, billing and compliance reporting

The 8 hottest housing markets in America (Business Insider), Rated: A

Sharestates, an online real-estate investing platform, has released its fall report on the hottest housing markets in the US.

Places on the list are ranked by three metrics:

  • Return on Investment (ROI): The rate of return to Sharestates loan investors.
  • ARV: The ratio of the total loan amount, including acquisition and rehab financing, compared with the After Repair Value.
  • Increase in demand from 2016 to 2017: Percent of 2017 Sharestates loans in the listed areas compared with 2016.

The top 3:

3. Sparrows Point, Maryland

ROI: 11.8%

ARV: 50%

2. Flatbush, Brooklyn, New York

ARV: 28%

Increase in demand: 400%

1. Fishtown, Philadelphia, Pennsylvania

ROI: 11.8%

ARV: 14%

Increase in demand: 650%

LendingTree, Inc. Announces Changes to its Executive Team (PR Newswire), Rated: A

LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation’s leading online loan marketplace, has announced two key promotions within its leadership team. J.D. Moriarty, who joined LendingTree earlier this year as SVP of Corporate Development, has been promoted to Chief Financial Officer, and Gabe Dalporto, who previously served as the company’s Chief Financial Officer since 2015 and as LendingTree’s Chief Marketing Officer from March 2011 to June 2015, has been elected to the company’s board of directors.

DOL Rule Delay Highlights Industry Battle Lines (Financial Advisor IQ), Rated: A

Word that full implementation of the Department of Labor’s contentious fiduciary rule has been delayed for two years — until July 2019 — may not have shocked many observers but it’s still deeply significant, say industry experts on both sides of a debate that’s raged across two very different presidential administrations.

That’s if it ever even happens, grumbles Rostad, whose organization wants all financial advisors to be client-first fiduciaries as a matter of public service. He says the Trump administration and the brokerage industry despise two provisions of the DOL rule — the right for investors to sue advisors and firms for breaches of the rule, and the best interest contract exemption, which lets advisors continue receiving commissions if they agree in writing to continue acting in the client’s best interests and make a full disclosure of options other than commission-based business available. And the administration and brokerage industry will be working overtime between now and mid-2019 to get the provisions watered down or eliminated altogether, says Rostad.

Meanwhile, the Financial Services Institute, a Washington D.C.-based advocacy group for “a healthier, more business-friendly regulatory environment for our members” — mainly broker-dealers and their advisors — sees the delay as an opportunity for needed refinements.

Banks aren’t giving up on personal finance apps (American Banker), Rated: A

Don’t consign personal financial management apps to the ash heap of technology just yet.

Granted, on Thursday Prosper Marketplace is discontinuing Prosper Daily, an app formerly known as BillGuard that helped users monitor their finances and credit scores. And the next day Capital One Financial is set to close the money management app Level Money.

Will Blockchain Change The Way We Invest? (Forbes), Rated: A

Currently, the value of all the Bitcoin in the world is around $90 billion, much less than individual companies such as Amazon ($474.41 billion market cap), Google ($649.49 billion) and Apple ($815.39 billion). However, with the current trend, some investors predict cryptocurrencies to be worth $5 Trillion by 2022.

As cryptocurrencies are becoming more common, new blockchain powered platforms are emerging to change the way we invest. The success of these companies may create a scenario in which fintech companies like RobinhoodFundriseQuantopian and others – currently considered the most disruptive companies in the world – will become outdated in a few years.

Real.markets – Disrupting real estate crowdfunding

REAL is an Ethereum Smart-Contracts governed ecosystem that focuses on creating the best conditions for Real Estate investment eliminating costs due to unnecessary intermediaries, providing transparency and liquidity, alleviating tax inefficiencies and easing cross-border transactions under a unified crowdfunding platform.

NASDAQ LINQ – Trade private companies

Almost two years ago NASDAQ launched LINQ, a digital ledger technology that leverages a blockchain to facilitate the issuance, cataloging and recording of transfers of shares of privately-held companies on The NASDAQ Private Market in collaboration with Chain.

enigma – machine-based investing platform and infrastructure for crypto-assets

From 2009 to 2015 alone, the amount of assets under management (AUM) by quantitative hedge funds grew at a rate of 14% year-over-year, nearly double the 8% year-over-year growth of assets managed by traditional hedge funds.

Following the rising demand for crypto-currencies, enigmabelieves an interesting opportunity arises: algorithmic trading on crypto-assets. Many exchanges already offer the ability to place orders through RESTful APIs, permitting users to run their trading algorithms locally.

FinTech Can Help Increase Financial Literacy (Huffington Post), Rated: A

From mobile payments, app based investing platforms, to online banking solutions, financial technology (FinTech) has revolutionized not only how consumers receive financial services but also how they expect to receive such services.

recent studyshowed that 59 percent of senior financial services executives believe that we will see an increase in the use of digital solutions to improve operations, with 56 percent of executives citing technological disruption as a component of their business strategy. From an operational perspective, findings have shown that core financial institution activities including Deposits and Lending and Investment Management are expected to be radically reconfigured as a result of technological innovation. Consumers have also begun to shift their preferences towards FinTech, with statistics indicating that in 2016 a third of consumers reported regular use of financial technology services, with such use doubling from two years prior. Furthermore, more than 52 percent of consumers are expected to use FinTech services in “the near future.”

A recent study found that two-thirds of Americans cannot pass a basic financial literacy test, with the number of those who can pass such a test decreasing annually. Globally, the figures reflect similar trends; in 2015, only 35 percent of men and 30 percent of women were classified as financially literate.

Greenlight’s flagship product is a debit card for children that utilizes mobile app technology to provide parents with a customizable and monitorable solution to facilitate purchases.

TS: Greenlight is free for 30 days and then just $4.99/mo. for the whole family to use (all parents and up to 5 kids). Each child receives their own Greenlight Card with their name on it and a unique PIN. Parents use our app on either their iOS or Android smartphone, and can easily manage all of their kids’ cards from one place.

Parents can load and transfer money onto their kids cards instantly from anywhere with no additional fees. That money can be limited to specific stores or websites, or be spent anywhere depending on what parents decide. Greenlight provides real-time mobile alerts to tell parents where and when their kids are making a purchase and can even automate allowances.

Kids can also use the Greenlight app on their smartphone. They can visually see their balances, request money, and communicate what they’re purchasing with their parents. When a parent receives a funding request from one of their children, they can easily approve or decline the request in the app.

Bitcoin Exchange Sees Complaints Soar (Bloomberg), Rated: A

The U.S. Consumer Financial Protection Bureau has received at least 293 complaints about Coinbase Inc., according to data reviewed by Bloomberg.

More than a third of the grievances came from individuals who said they were unable to access their money when promised. Many people also complained about other transaction or service problems. Accusations of fraud represented less than 15 percent of the complaints.

LendingCalc Appoints Former Chief of Risk at Dianrong, Terry Tse as Adviser (Newson6.com), Rated: B

LendingCalc, Inc., a direct investment platform providing global access to digital specialty finance for institutional investors, announced the appointment of Terry Tse, the former Chief Risk Officer of the leading Chinese P2P platform, Dianrong, as strategic adviser for the firm. In his role, Terry will help build LendingCalc’s global investment gateway and platform due diligence framework.

United Kingdom

Marketplace lending platform Funding Circle cuts off smaller brokers (AltFi), Rated: AAA

Funding Circle will be refocusing its energies on its most highly engaged business finance brokers.

More changes in the ever-changing marketplace lending sector. A few weeks on from announcing sweeping changes to its investment process, leading business-focused platform Funding Circle is changing its approach to working with corporate finance brokers.

One such broker, who wished to remain anonymous, told AltFi that Funding Circle is cutting off 300 brokers. The platform works with approximately 1,000 active brokers at present.

P2P lender LendingCrowd extends cashback offering (AltFi), Rated: AAA

The Edinburgh-based platform is extending its cashback offering, giving clients £150 for investing £2,500 or more on the platform by 30 September.

REDWOOD BANK LAUNCHES FOUR MONTHS AFTER SECURING ITS INITIAL BANKING LICENCE (Global Banking and Finance), Rated: A

Redwood Bank, Britain’s newest business bank for SMEs (small and medium sized enterprises), has announced that just over four months after securing its initial banking licence, it has completed its “Mobilisation” phase and has now opened for business, offering secured SME mortgages for business owners, as well as for experienced commercial and residential property investors. It has also launched a competitive business deposit account.

Its speed to market is the result of a combination of factors, including having a very experienced and proven management team, and the fact that it’s the first business bank with 100% cloud- based infrastructure, which improves efficiency as well as security.

Trends among investment advisors mirror developments in P2P lending (AltFi), Rated: A

New research from Equifax Touchstone, an intermediary database provider, illustrates an enhanced focus among investment advisors on delivering consistent investment outcomes to customers.

Of 141 surveyed investment advisors, 82 per cent were found to have a centralised investment process, meaning that a consistent approach to allocation and monitoring exists for all clients.

However, 76 per cent use model portfolios, which are bespoke to a customer’s risk-reward preferences, and which are automatically rebalanced regularly to bring returns in line with expectation – even if the broader approach to investment management is the same for all clients. These model portfolios are comprised of a diversified pool of mutual funds that invest in a variety of assets, ranging from large and small stocks to REITs.

But in its shift to passive strategies, P2P is perhaps less closely aligned with investment advisors. Equifax Touchstone’s survey shows that advisors still very much value active investment vehicles. While passive investing plays a part for 82 per cent of advisors, the majority invest 25 per cent or less in passives, with11 per cent of advisors investing more than 50 per cent in them.

Crowdfunding your start-up: Learn the basics from Crowdcube (Startups.co.uk), Rated: A

If you’re looking to raise finance for your business, there are a few options you can explore including secured or unsecured debt, private equity, venture capital investment, peer-to-peer (P2P) lending and crowdfunding.

Some of the more popular crowdfunding models include reward-based, donation-based, micro-lending, P2P, peer-to-business and equity.

Equity crowdfunding as an industry, over its six-year lifetime, has raised about £600m in the UK, with close to half of that having been raised by Crowdcube. Equity crowdfunding facilitates investment into start-ups, early stage businesses and growth companies in return for a pro-rata equity stake in the business.

Investments can be made from as little as £10 with no maximum in place, which typically culminates in pro-rata ownership of the company via ordinary or B investment shares.

You may have also seen the likes of BrewDog, River Cottage and Grind raise money through bonds on Crowdcube. This is where a company launches a funding round starting from at least £250,000.

BrewDog raised £10m through a bond in December 2016, offering 8% interest to the investors. Over 2,700 people backed BrewDog in three weeks and should see interest payments for the next four years; the length of the bond term.

“Property Crowd Funding” – The Magic of Modern Day Investing (Huffington Post), Rated: A

Real estate has been booming around the world, particularly in the UK, with new housing, apartment and condo complexes being built at a phenomenal pace.

Abdullah Iqbal, Co-Founder of the Knightsbridge based start-up PropTech Crowd.

While there existed property crowdfunding companies already, Abdullah and his dad saw an obvious vacuum in the market. “None of the property crowdfunding platforms were Shariah compliant at the time, due to them being involved with interest. Our motivation was to take the banks out of the equation, enabling investors to have shares and democratising the property market for everyone, while conforming to the Islamic prohibition of interest”, emphasises Abdullah.

The company’s core mission is to revolutionise property investment through innovative crowdfunding technology, allowing everyday investors to access high-ROI opportunities that they may have been priced out of in the past.

I learned that Mufti Abdul Kader, a renowned Islamic scholar and expert in Islamic finance, is a Shariah Compliance Advisor at PropTech Crowd. His duties entail making sure that all elements of the business are Shariah compliant, visibly and consistently.

Giving developers direction on safety (Bridging and Commercial), Rated: A

At LendInvest we have been clear that the housing market will look a lot healthier when there is less emphasis on the major developers, when we instead have a market which encourages small- and medium-sized (SME) developers to build homes too. Our studies have found that SME developers are excluded from much of the government support that exists for SMEs from other industries, something which has to change.

Bumpy Brexit risk does not justify record low rates (Reuters), Rated: A

The Bank of England should not keep interest rates at their record low as an insurance policy against the risk of a “bumpy Brexit” and it needs to start raising borrowing costs now, BoE policymaker Michael Saunders said.

But at the same time the Brexit hit to sterling has pushed up inflation above the BoE’s 2 percent target, leading to the split among the central bank’s rate-setters.

Earlier this month, they voted 6-2 to keep rates at 0.25 percent and the BoE warned that Brexit was weighing on the economy.

China

What are the Implications of the Rapid Growth of Fintech in China? (Brink), Rated: A

We see five major key success factors for the future China fintech market:

  1. Data abundance and application – Business models in financial services will be increasingly data-driven, and data will be at the core of the value chain.
  2. Large customer base
  3. Availability of proprietary and comprehensive products
  4. Strong knowledge of financial services and risk management – A strong combined core of financial services expertise and risk management capabilities remains a prerequisite for success, allowing for more efficient identification of useful data and building of effective risk models.
  5. “Fin plus tech” organization and culture

Niche Fintech Players should expand and perhaps transform their business models. The first and most intuitive way is to grow organically beyond a niche. Qudian, for example, has expanded beyond its legacy focus on university borrowers to develop an e-commerce ecosystem driven by a consumer finance model.

European Union

SeedInvest to Host Live Crowdfunding at LendIt Europe in London (Crowdfund Insider), Rated: AAA

SeedInvest and LendIt, the roving Fintech conference, have partnered on live crowdfunding for the upcoming LendIt Europe event scheduled for this coming October. The live event is being billed as a European first. LendIt Europe participants will be able to invest directly in companies participating in the PitchIt portion of the event taking place in London.

SeedInvest previously powered several live investment crowdfunding events in Europe with noted success. SeedInvest’s partnership with Jason Calacanis, and his LAUNCH Festival, reportedly raised $7.5 million from 3900 individual investors. This will be the platform’s first foray beyond the US borders though and may be a sign of a strategic push for the company.

France and Sweden are scooping up a bigger share of Europe’s fintech deals since Brexit (Quartz), Rated: AAA

France and Sweden’s share of financial technology deals in Europe has grown since Britons voted to leave the EU in June last year, according to research firm CB Insights.

France’s share of venture capital transactions has increased by five percentage points since 2014, to 11% so far this year. Sweden’s take has risen three percentage points over that time, to 12%.

Download the CB Insights report on European fintech trends here.

LendIt Europe Announces Upgrade Co-founder and CEO Renaud Laplanche as Keynote Speaker (Fintech Finance), Rated: AAA

LendIt announced that Renaud Laplanche, the CEO of Upgrade and former CEO of Lending Club, will join the keynote speaker roster for LendIt Europe 2017.

He will be giving the opening keynote speech on the second day of LendIt Europe where he will be giving an update on Online Lending 2.0 and discussing the US fintech market, where the online lending industry is today and how it fits into the broader fintech sector trends going forward.

Peter Thiel is backing Berlin ‘InsurTech’ startup Coya in a million round (Business Insider), Rated: A

Silicon Valley investor Peter Thiel has led a $10 million seed funding round into Berlin-based “InsurTech” startup Coya.

Thiel’s fund Valar Ventures led the round, which also included funding from e.ventures, and La Famiglia, a European venture capital fund backed by entrepreneurs.

The investment is one of the biggest “seed funding” rounds in Germany.

International

Banking landscape shifts as Chinese groups globalise (Financial Times), Rated: AAA

Global cross-border capital flows have declined 65 per cent since 2007, and half of that is explained by a drop in cross-border lending flows. The largest global European banks, and some US ones too, are in retreat from foreign markets. But financial globalisation is far from finished — rather it is broadening and becoming more inclusive as developing economies, most notably China, step into the breach.

The eurozone has been at the forefront of the retreat from foreign markets among banks in advanced economies. The foreign claims of eurozone banks have fallen by $7.2tn, or 45 per cent, since 2007, and nearly half of that has been claims on other borrowers in the eurozone — particularly other banks, new MGI research finds. UK and Swiss banks have sharply reduced foreign assets since the crisis as well. US banks, which have always been less global than their European counterparts, have re-focused on growth at home.

In contrast, China’s four largest commercial banks have seen their foreign assets grow 12-fold since 2007 to more than $1tn. And that’s still only 9 per cent of their total assets. Foreign assets make up 20 per cent or more of the total assets in the largest banks in all advanced economies; if China’s largest banks follow that path, they could see tremendous growth in foreign lending ahead.

How Banks And Fintech Startups Redefine Finance (CoinTelegraph), Rated: A

But as financial technologies continue to expand, legacy players have come to accept the disruptive role of fintech startups and the need to work together. In recent years, the relation between banks and fintech startups has evolved from marginal investments to closely knit collaboration and integration.

Banks are now getting involved at different levels to help fintech companies get off the ground. This includes an increasing number of buyouts, mergers and partnerships.

An example is Goldman Sachs, a banking firm that has invested more than $570 mln in fintech companies since 2012. Last year, the banking giant acquired Honest Dollar, a digital retirement savings platform, in order to expand the startup’s brilliant solution to millions of its customers. Along with Standard Charter, Goldman also helped Momo, a Vietnam-based mobile wallet and payment app, raise $34 mln in two rounds of funding. Goldman also launched its own online lending service Marcus last year, a move that is inspired by the fintech culture. The service has so far doled out more than $1 bln in loans and expects to cross $2 bln by the end of this year.

On the other end, fintech startups are helping banks adopt new technology. Ezbob, for example, is a UK-based startup that provided online lending services to SMEs before white-labeling its technology and changing its business model to a Lending as a Service (LaaS) platform. The Royal Bank of Scotland has leveraged Ezbob’s technology to launch Esme, its automated lending platform which allows small and medium-sized businesses to obtain loans quickly, even outside working hours.

The future of robo-advice is human (Robo Advice News), Rated: A

When Betterment decided to offer its clients access to a human financial advisor, it marked a growing trend of robo-advice platforms adding a human touch element.

Automated wealth platforms or robo-advice is not likely to find its success by just digitalising its services, says Thomas Davenport, a professor of information technology and management at Babson College. The future lies in a hybrid model that uses the efficiency of big data with the softness of personalised human advice.

Around 60 per cent of consumers would rather have a live person in charge of their finances instead of relying on automated technology, according to a survey from Legg Mason Asset Management.

Reducing Investment Funds to SMEs from Financial Institutions to Drive Global Market for Peer-to-peer Lending (OpenPR), Rated: B

A recent report added to the portfolio of MarketResearchReports.biz presents a detailed analytical account of the global market for peer to peer lending. The report, titled “Global Peer-to-peer Lending Market Size, Status and Forecast 2022,” states that the market will exhibit growth at an exponential pace over the period between 2017 and 2022.

This report presents detailed insights into the market and its expansion across the globe from 2017 to 2022.

Get Sample Copy Of This Report @
www.marketresearchreports.biz/sample/sample/970169

Australia

Fintech’s feeding frenzy: why it’s time to stop, collaborate and listen (Finfeed), Rated: AAA

In 2016, KPMG suggested US$24.7 billion was invested in fintech companies globally. Data accumulated by Financial Technology Partners, an investment bank focused on fintech, cites $36 billion across over 1500 funding deals from over 1700 unique investors (not taking into account M&A deals) as a more accurate figure.

As it has done throughout history, the banking and lending industry is dominating the fintech landscape, with payments and e-commerce a formidable rival.

The financial services and technology sectors are set for changes as the budget proposed a series of measures to encourage innovation in the fintech industry. This includes new legislation which, if implemented, is likely to allow crowd-sourced equity funding, tax concessions for start-ups and angel investors and fewer barriers to licensing of finance firms. The traditional banking sector could see more digital disruption arising from these changes which could subsequently create demand for top finance and technology talent.

Credit insurance provider Atradius recently launched its new digital platform ‘Atrium’, which provides customers and distribution partners with real-time data to better understand buyers, credit limits and risk. The platform is designed to drastically improve the user experience, including time efficiency – operations that used to take 15 minutes now only take three.

Then there is Lenddo, an Asia-based fintech platform that uses non-traditional data to provide credit scoring and verification to economically empower the emerging middle class around the world.

Secure payments data platform, EFTsure, recently announced a new collaboration agreement with PricewaterhouseCoopers Australia. Under the agreement, PwC can advise certain clients of EFTsure’s innovative real-time payment verification technology and best practice payee management solution to help those clients to mitigate the risk of fraudulent or erroneous electronic business payments.

Other companies making inroads include UBank, one of Australia’s leading digital-only banks, which recently unveiled RoboChat, Australia’s first virtual assistant to help potential home buyers and refinancers complete their online home loan applications.

Source: Finfeed
India

Fintech Startups And Why They Need To Get An NBFC License (TechStory), Rated: A

FinTech, the abbreviated form of financial technology, is that segment of the start-up culture that deals with good old finance and banking business but through the more novel methods of crowdfunding, peer-to-peer models, mobile payments, loans and even asset management. They squarely fall under the definition of Non-Banking Financial Companies (NBFCs), and considered against the Indian banking scenario they do not meet the legal definition of a bank as is outlined in the Companies Act 2013 or even the Companies Act, 1956.

If a recent Accenture report is anything to go by, fintech that was in a near-nascent state back in 2008 globally shot up in value from $930 million to about $12 billion by the start of 2015.

The other advantages are:

  • Cheaper business setup and expansion costs;
  • Quick rolling of funding rather than the drawn out method of first talking to investors;
  • Cheaper cross-border transfer of money (a fine example is that of UK-based TransferWise);
  • Simple registration process backed by minimal documentation, sometimes not requiring any Net Worth or collateral information (as is the case with LendingKart);
  • Make alternative credit scoring possible for ineligible borrowers for various types of loans; and
  • Even foster efficient fraud and anti-money laundering management in real time across products, channels and customers (as IndusInd has been successfully pioneering since quite some time now).

Why FinTechs need NBFC licenses to operate?

Since NBFCs are principally in the business of providing loans and advances, insurance, acquisition of shares, debentures and stocks, leasing, hire-purchase and even receiving deposits under a set arrangement or scheme, they fulfil the popular 50-50 test and are required to obtain the ‘Commencement of Business’ certificate from RBI (as per section 45 l (a) of the RBI Act).

The 50-50 test that is the basis of the principal business conducted by an NBFC finds application when a company’s financial assets constitute more than 50 percent of the total assets and income from financial assets constitute more than 50 percent of the gross income.

Democratising real estate via blockchain (New Straits Times), Rated: A

At the same time, our commitment to offer alternative investment channels was reinforced when we saw how the global flow of funds and individual investors continued to cause disruptions in house prices in many major cities.

Crowdfunding and peer-to-peer lending have been touted as among potential alternative platforms that can give small developers access to funding. We saw a number of such platforms used in many countries and they helped solve some of the funding needs.

On June 18 2015, we were deeply encouraged by news that Wanda Group (one of the largest commercial developers in China or the world by now) announced that it had raised five billion yuan (RM3.4 billion) from investors online in just three days to fund the construction of three malls. Investors were able to take part in the projects by investing as little as 1,000 yuan. This is truly opening up access to real estate.

Firstly, digital tokens created on blockchains are technically very difficult to hack and all transactions and documents are transparent. Secondly, in transaction using digital tokens, especially those involving completed properties, a lot of middleman fees can be reduced. More importantly, such digital tokens can be traded much like shares are traded on stock exchanges. This makes real estate a liquid instrument.

A Loan to Fund Every Need (Outlook India), Rated: B

“Data analytics offer efficient ways of analysing credit history and behaviour of a prospective borrower to make lending fast and easy on the digital platform,” says Rishi Mehra, CEO, Wishfin.com. Smartphones have made digital transactions seamless and by including a lending option, the ‘right now’ generation has it going for them like never before.

A P2P lending portal works in a way wherein lenders can make offers to fund borrower’s requirements which are accepted on first come, first served basis. Borrowers can seek to raise money from multiple lenders. A formal contract is signed by the lender and the borrower once they reach an agreement. The good news is that RBI has finalised P2P lending norms, which means there is nothing illegal or fishy about these loans. This format of lending is fast catching up, especially among the youth because many of them don’t have a credit score that will make them eligible for borrowing as soon as they start earning.

Asia

Financial authority to regulate peer-to-peer lending (The Jakarta Post), Rated: AAA

The Financial Service Authority (OJK) will soon regulate peer-to-peer (P2P) lending to minimize the risk of bad debt in the virtual financing business.

“The procedures for borrowing will be regulated in detail, such as how contract agreements anticipate the risk of bad debt,” Hendrikus said as reported by kompas.com on Wednesday.

He said his institution would also regulate the mechanism of “know your costumer” (KYC) through the existing technology.

Geisha loan application: Accepted (Nikkei Asian Review), Rated: A

Some new loan-makers are dabbling in tech to help them gauge a potential borrower’s creditworthiness.

For potential borrowers it finds here, the lender will set artificial intelligence loose on the trove of data that the booking website serves up, like how busy the applicants’ inns are.

Japan Net Bank, an online lender, also uses technology to sift through big data when screening potential borrowers. Partnering with freee, a Tokyo-based online accounting software provider, the bank recently began using AI to quickly pick up and analyze data concerning potential borrowers’ financial situations as well as how well their businesses are doing.

Middle East

Bahrain: The latest nation to lay claim to “fintech hub” status (AltFi), Rated: A

Where isn’t a global fintech hub these days? Count Bahrain among the multitude of claimants. The Central Bank of Bahrain (CBB) has announced the first members of its new regulatory sandbox: NOW Money and Tramonex.

Dubai-based NOW Money claims to be the first company in the Gulf region to offer a mobile banking solution to users, including accounts and a range of low-cost global money transfer options for low-income workers.

Tramonex is a business-facing solution, helping companies to process and transfer funds online. Its focus is on facilitating conversion and settlement services to automate cross-border transactions.

Micropayments FinTech Innovation in Dubai (Simmons&Simmons), Rated: B

International law firm Simmons & Simmons continues to advise on cutting edge payment platform projects and the emerging regulation of payments. The Middle East TMT team, led by partner Raza Rizvi and senior associate Neil Westwood, advised Mercury Payments Services LLC (Mercury) on the phased roll out of an innovative payment service through cards issued by the Roads and Transport Authority of Dubai (RTA).

Africa

SA fintech adoption beats global average, expected to surge (Moneyweb), Rated: AAA

South Africa ranks among the highest in fintech users globally and reports one of the highest incidences of intended use, a new study finds.

At 35%, fintech adoption in South Africa beats the global average of 33% and is mostly in line with its emerging market peers, who boast large tech savvy but financially underserved populations. Domestically, 6% of fintech users use five or more services and are classified as super users.

At 41%, adoption among consumers aged 25 to 34 is highest, closely followed by those aged 35 to 44 at 40%. The largely digital native 18 to 24 year-old category lags behind at 36%, mostly due to them having less sophisticated financial needs. Adoption gradually declines from age 45 upwards.

EY found that fintech adoption is highest among South Africans who earn $50 000 to $80 000 per annum at 51%, with usage at 50% among those who earn more than $150 000 annually. Adoption of all five services – money transfer and payments, financial planning, savings and investments, borrowing and insurance – is highest among the former income bracket. Surprisingly, those that earn more than $150 000 are the highest users of borrowing services, possibly due to their ability to leverage off their earnings.

Source: Moneyweb
South America

Brazil proposes new rules for fintechs, peer-to-peer lending (NASDAQ), Rated: A

Brazil’s central bank has proposed allowing financial technology companies to lend money, without taking deposits as commercial banks do, as part of new rules for the fast-growing fintech industry in Latin America’s largest economy.

The rules,which will be assessed in public hearings over the next 2-1/2 months, should not require congressional approval, central bank director Otávio Damaso said on Wednesday. Commercial banks will be allowed to create their own fintechs once the rules are in place, he said.

CARICOM

Global Domination Capital (Newsday), Rated: A

Global Domination Capital is set to be the region’s first fintech startup company, offering equity crowdfunding and peer-to-peer lending solutions to the OECS countries and the CARICOM member states.

This includes Barbados, Jamaica, The Bahamas, Trinidad and Tobago and The Turks and Caicos Islands.

Authors:

George Popescu
Allen Taylor

Tuesday August 1 2017, Daily News Digest

Charge offs

News Comments Today’s main news: Ron Suber joins Credible as Executive Vice-Chairman. Prosper pulls plug on anti-theft app. FCA extends credit assessment rules for P2P platforms. Klarna launches P2P payment app. Revolut’s Seedrs campaign oversubscribed. Harmoney loses 63% revenue. UIDAI launches mAadhaar app. Today’s main analysis: Vintage Analysis on loan performance with age. Elevates Q2 2017 results. Today’s thought-provoking articles: AI and the […]

Charge offs

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

South America

Israel

News Summary

United States

Ron Suber Joins Credible as Executive Vice-Chairman (Credible), Rated: AAA

Renowned fintech executive, advisor and investor Ron Suber has joined personal finance marketplace Credible.com as executive vice-chairman and a member of the board of directors.

“It’s been extremely exciting to see the Credible team turn a startup with a promising business model into a fast-growing company that’s respected by consumers, lenders and the industry” Suber said. “I have decided that now is the right time to help Credible seize their broader opportunity in the fintech ecosystem.”

Revisiting Vintage Analysis- How Loans Perform With Age (Orchard), Rated: AAA

The older vintages have longer lines, as they have more months of history. Using this data, we can examine how loans booked at different times compare to each other at equivalent periods in their life-cycle. This can help an investor evaluate their current portfolio and help them make comparative judgments about its performance.

Source: Orchard Platform

Factors to Consider Within Vintage Analysis

Interest Rates

Source: Orchard Platform
Source: Orchard Platform

Credit Grade

Vintage analysis can also help us to see how loans within a particular credit grade perform over time. In our prior analysis, we examined the performance of the top graded loans (A for Lending Club and AA for Prosper). However, as time has passed, these two platforms have increasingly been lending to borrowers with credit just below the top grades.

FICO Score and Debt-to-Income Ratio

From the data below we can see how loans from Lending Club charge-off over time controlling for the debt-to-income ratio of the borrower.

Source: Orchard Platform

 

ELEVATE CREDIT ANNOUNCES SECOND QUARTER 2017 RESULTS (Elevate), Rated: AAA

Second Quarter 2017 Financial Highlights

  • Nearly 20% year-over-year revenue growth: Revenues totaled $150.5 million, an 18.7% increase from $126.8 million for the prior-year period.
  • Almost 29% year-over-year growth in loans receivable: Combined loans receivable – principal, totaled $481.1 million, a 28.7% increase from $373.7 million for the prior-year period.
  • Stable credit quality: Loan loss provision was 48.0% of revenues and within our targeted range of 45%- 55%. The ending combined loan loss reserve, as a percentage of combined loans receivable, was 13.8%, lower than the 15.7% reported for the prior-year period.
  • Customer acquisition costs within targeted range: The total number of new customer loans for the quarter was approximately 66,000 with an average customer acquisition cost of $294, within our targeted range of $250-$300.
  • Second consecutive quarter of net income: Net income of $3.0 million, or $0.08 per diluted share, versus a net loss of $7.5 million, or $(0.59) per diluted share, for the second quarter of 2016.
  • Adjusted EBITDA margin: Adjusted EBITDA totaled $19.8 million, up from $7.3 million in the second quarter of 2016. The Adjusted EBITDA margin increased to 13.2% from 5.8% for the prior-year period.

Second Quarter 2017 Business Highlights

  • Elevate IPO. On April 6, Elevate began trading on the New York Stock Exchange under the “ELVT” ticker symbol.
  • $200 Million in Outstandings for Elastic. Just a year after achieving $100 million in outstandings, Elastic surpassed $200 million in total principal outstandings, with more than 120,000 open accounts.
  • Elevate Labs Launched. The Company launched Elevate Labs, including its new San Diego-based Advanced Analytics Center, underscoring its approximately $40 million annual investment in state-of-the art technology and data science.
  • RISE Enters Kansas with Line of Credit Product. Bringing additional responsible loan opportunities to non-prime consumers and expanding its product offering, RISE entered its 16th state, Kansas, the first state where RISE offers a line of credit product.
  • Savings for Customers. The average effective APR of its products for the quarter was 131%, down from 148% in the same quarter last year. The Company estimates indicate that Elevate’s products – Rise, Elastic and Sunny – saved customers approximately $304 million in the three months ended June 30, 2017 versus payday loans.
Source: Elevate release q2-2017-release

Elevate Reports Net Income of $ 3 Million on 0.5 Million in Revenue (Crowdfund Insider), Rated: A

According to the company, revenues for the quarter totaled $150.5 million – an 18.7% increase versus year prior where Elevate delivered $126.8 million in revenue. Elevate reported net income of $3.0 million, or $0.08 per diluted share, versus a net loss of $7.5 million, or $(0.59) per diluted share, for the second quarter of 2016.

Combined loans received were said to total $481.1 million, an increase of 28.7% from $373.7 from year prior quarter.

Prosper pulls plug on anti-ID-theft app (American Banker), Rated: AAA

Prosper Marketplace, one of the largest marketplace lenders, is discontinuing the Prosper Daily app.

The app, formerly known as BillGuard and a favorite of many fintech insiders, helped users protect their identities and monitor their credit scores.

The online lender said it will no longer have access to users’ financial accounts once the app is discontinued and that it will reimburse annual subscribers.

Artificial Intelligence And The Future of Digital Lending (The Financial Brand), Rated: AAA

To be a digital lender, banks and credit unions must do more than provide a digital app. Internal lending processes must be transformed to eliminate friction and unneeded steps, with artificial intelligence (AI) supporting proactive loan decisions.

According to PwC, a financial organization must initially define what is desired from both a customer experience and operational efficiency basis around consumer lending. Next, banks and credit unions must build a digital lending strategy around the following organizational competencies. The path to becoming a true digital lending organization involves five steps.

  1. User-Centric Design
  2. Data-Driven Decision Making
  3. Flexible Infrastructure
  4. Effective Development Approach
  5. Organizational Agility

Digital Borrower Expectations

The expectations of the digital borrower have increased over the past several years, mostly based on marketplace offerings and digital experiences in other industries. While the interest rate and closing costs on loans are still primary considerations, the speed, simplicity, transparency and customer service of the entire process is important.

According to the PwC report, Consumer Lending: Understanding Today’s Empowered Borrower, three out of four demographic segments prefer to be online for each phase of the lending process as opposed to traditional methods, such as in person or on the phone.

While some lender apps offer the higher-ranking features – such as the ability to calculate the loan amount that the borrower can afford and the ability to lock in an interest rate on a loan, most of the other features are still not offered by most organizations.

Being a Digital Lender is More Than Just Fewer Clicks

To become a digital bank, organizations need to think beyond ‘minimizing the number of clicks’, reducing manual data entry, and improving the speed of decisions.

The process of becoming a digital lender for the long-term moves investments from ‘digital features’ to a ‘digital mentality’ and process that can support changing digital lending options. It is a major move from investing in just digital output to investing in the digital input that works behind the scenes. It is a strategic framework for the future of digital lending.

PeerStreet Integrates with Personal Capital to Provide More Detailed Investment Overview (PeerStreet Email), Rated: A

PeerStreet, an award-winning platform for investing in real estate backed loans, has announced an integration with Personal Capital, powered by the Envestnet | Yodlee Data Aggregation Platform. Customers of both Personal Capital, an automated investment service with more than $4.8 billion assets under management, and PeerStreet can now view their PeerStreet positions within the context of their investment portfolio on Personal Capital.

Realty Mogul’s REIT Turns One (Realty Mogul Email), Rated: A

Celebrating its one year anniversary, MogulREIT I recently declared its twelfth consecutive month of 8% annualized return on investment. With ten assets across the country, MogulREIT I is a diversified portfolio of commercial real estate investments designed to provide consistent cash distributions, while protecting and returning capital contributions.

Money360 Closes $ 143M in Commercial Real Estate Loans in Q2, Marking a Record-Breaking Quarter (Markets Insider), Rated: A

Money360, a direct marketplace lender focused on commercial real estate, today announced that the company closed $143 million in loans in the second quarter, marking the lender’s best quarter to date. Money360 has now closed more than $350 million in total loans and is on pace to close more than $500 million by the end of the year. On average, the company is now closing $50 million in loans each month.

A few of the $143 million in loans closed in the second quarter include:

  • A $15.6 million bridge loan for a three-tenant medical office property in Grand Forks County, North Dakota.
  • A $11.1 million bridge loan for the acquisition of a multi-tenant retail property in Wayne County, Michigan.
  • A $9.7 million bridge loan for a two-story, 198-room hotel property in Cumberland County, North Carolina.

Read our analysis of Money360.

Wells Fargo Sued in Yet Another Public Embarrassment (Financial Advisor), Rated: A

The assault on the Wells Fargo brand continues, with a lawsuit accusing the bank of pushing almost 250,000 of its clients into delinquency by forcing them into auto insurance they didn’t need — or even ask for, Bloomberg reports.

The bank allegedly made millions of dollars off unsuspecting clients, according to the proposed class-action lawsuit filed in San Francisco federal court and cited by the newswire.

Wells Fargo allegedly didn’t check whether its clients taking out auto loans already had auto insurance, or ignored the fact that they did, Bloomberg reports.

Insurance CEOs Say Change Is Coming (CB Insights), Rated: A

Markel co-CEO Richard Whitt III on the $919M acquisition of State National

We, like a lot of people, are starting to look at the insurtech space. And State National, I think they are ideally situated to sort of be the go between the insurtech folks and sort of your standard insurance carrier types. It’s a clash of cultures there, I would say.

The insurtech folks are used to things happening lightening fast and with minimal regulatory issues and all that and that’s not insurance. So there almost needs to be a translator between insurtech folks and standard insurance folks. And that is a role that State National plays…And we see them helping us with our insurtech initiatives sort of being that translator between us and those folks.

Chubb CEO Evan Greenberg: “Change is coming”

But with that said, change is coming. And we are not alone in terms of carriers improving their capabilities, because of what technology brings that will lead that change. It’s around data, it’s around straight through process, it’s around data that improves the customer experience, while at the same time improving your ability to select risk and to do it quickly i.e. in seconds and to be able to then straight through process business.

You taking out a loan for your business and technology enables those other forms of distribution. The customer will buy it from a desktop, the customer will buy it from a mobile device, they will buy it any time anywhere and they will service it anytime anywhere.

Timothy Li of Fluid (Lend Academy), Rated: A

Into this void steps Fluid, the brainchild of Timothy Li, our next guest on the Lend Academy Podcast. He has found a unique way to provide students access to credit and consequently a way to start building their credit while they are in college. Fluid provides small loans of up to $500 at 0% interest. It is a fascinating idea that we explore in some depth on the show.

Are Technology Firms The Next Financial Service Providers? (Forbes), Rated: A

Financial system regulatory costs continue to climb in part due to it being rife with problems that led to 45% of financial intermediaries, such as money transfer services and stock exchanges, experiencing economic crime. Blockchain increases transparency and decentralizes the financial system with encrypted, unforgeable records embedded in a secure network. By reducing transaction costs and removing intermediaries, blockchain technology is poised to increase mass peer-to-peer collaboration, which could make existing financial organizations unnecessary.

Automated investment services, sometimes referred to as robo-advisors, are emerging as an easily accessible, cost-efficient solution to managing assets with 24/7 availability and annual fees of .2% to .5%, making it substantially less than typical rates.

The financial technology upsurge is bringing accessibility and availability to the forefront, making existing banking options resemble archaic institutions. With apps that let you make quick, feeless transactions (such as Venmo) and peer-to-peer lending platforms (such as Lending Club), customers and millennials are welcoming these innovative platforms. According to a 2015 report, 75% of millennials visit bank branches either once a month or less than that, and 38% of them don’t use a branch to perform banking activities.

Fintech, however, is fostering financial inclusion and building public confidence, evidenced by mobile platforms such as M-Pesa reaching 80% of households within four years.

OCC files motion to dismiss fintech charter lawsuit (American Banker), Rated: A

The Office of the Comptroller of the Currency has filed a motion to dismiss a lawsuit by state regulators challenging the agency’s fintech charter.

2020 REI Group Launches REI Data Systems With Investorwell (Digital Journal), Rated: A

Dallas- based 2020 REI Group has announced the creation of a data services and technology division to further their mission of providing products and services to real estate investors nationwide.

The new division will be labeled as REI Data Systems and will be led by Mike Inman, Vice President of Technology for 2020 REI Group.  Inman was most recently IT Manager of Application Development for the City of Grand Prairie and has a vast background in cloud based applications, GIS mapping, mobile applications, and data analytics.

The official launch for InvestorWell will be mid-August. The platform will help real estate investors find funding for their projects based on eight simple questions.

The Role of Digital in Financial Planning (Insead Knowledge), Rated: A

Long-term saving is a classic case study in behavioural biases. These must be managed and mitigated – whether it is through digital or face-to-face advice.

Inertia is one such bias. While people will generally put off taking action, research has shown that if they are intimately involved in preparing a plan, they are more likely to stick to it. The most committed planners also tend to be the most financially literate.

While robo-advisors are getting lots of press at the moment, they are mostly just a delivery mechanism. A nice user interface should not be a substitute for solid advice that ultimately addresses a key financial and behavioural problem. Digital poor advice is still poor advice.

  • Users should be asked, in non-misleading terms, whether they want a basic, average or luxury retirement lifestyle.
  • The language should be free of jargon and go to the heart of the users’ problem.
  • The tool should allow users to be actively involved in making the trade-offs based on their unique needs, wants and circumstances.

Startups want to change what you insure and how you insure it (TechCrunch), Rated: A

In the real world, however, insurance coverage hasn’t kept up with the social and economic changes of recent years. Sharing economies have gained scale. Jobs have gone from full-time to gig-based. And the vast millennial generation has entered adulthood intent on completing any complex transaction in a couple of minutes online.

So far this year, insurance-focused startups have raised more than $700 million in venture funding, according to Crunchbase data, with significant backing from both traditional VCs and large insurers. The lion’s share of investment has gone to companies pioneering and popularizing coverage categories and delivery models, with a particular focus on millennial customers.

One of the most richly funded players in this space is Trōv, which has an app for quickly insuring personal and work items like laptops, smartphones and high-end cameras. The five-year-old company raised a $45 million Series D round in April led by reinsurer Munich Re, bringing total funding to nearly $90 million.

Cover, which just closed an $8 million Series A, offers a similar service. Customers take a picture of the item they want to insure and Cover offers a policy, underwritten by a partner insurance firm.

One of the most richly funded insurance startups over the past few years is Metromile, which insures based on how much customers drive. Rack up few miles, and pay little beyond a small monthly base rate. Drive more, and it goes up. U.K.-based Cuvva, meanwhile, has raised seed funding to build out insurance offerings for short-term use of a car, for people learning to drive and for people who drive very little.

Silicon Valley-based Hippo is also marketing itself as a new kind of homeowners insurance company, with policies that offer stronger protections for common valuables like home electronics.

For short-term rentals, meanwhile, Slice Labs is partitioning off a space.

Next Insurance, founded last year, sells coverage for yoga instructors, photographers, home contractors and others whose needs don’t always fit with standard insurance policies. The Silicon Valley company raised $48 million to date from VC and insurance industry backers. Bunker, which bills itself as an insurer for freelancers and independent contractors, is also scaling up. The San Francisco company closed a $6 million Series A round in May.

One is Ladder, which has raised $16 million to build out a platform for offering direct-to-consumer term life insurance online. Another, Brooklyn-based Fabric, has raised $2.5 million for its digital platform offering instant quotes on accidental death coverage, as well as broader life insurance policies.

An Attorney’s Take On Real Estate Crowdfunding (RealCrowd), Rated: A