Wednesday May 24 2017, Daily News Digest

Wednesday May 24 2017, Daily News Digest

News Comments Today’s main news: Commercial & Industrial loans: Does it spell recession?  Funding Circle gets FCA approval. Santander checked income on 8% in Subprime ABS. Elevate Credit Q1 results. EstateGuru pays more than 1M Euro interest to real estate investors. Today’s main analysis: Lending Club publishes vintage performance data. Today’s thought-provoking articles: Elevate Credit Q1 results United States […]

Wednesday May 24 2017, Daily News Digest

News Comments

United States

  • Commercial & Industrial loans: Does it spell recession? GP:”Everybody is looking for an early indicator of a recession. However markets go up and down for all kind of reasons and indicators nearly always give fake alerts as well. If there was a sure way for an indicator to show which way the market is moving everybody would be a billionnaire. Indicators also work great looking backwards or retrofitting. So while this data is indeed interesting and relevant I would wait for a few more data points and confirming information from other markets and sources and I would want to understand the mechanism underlying the trend before calling wolf.” AT: “I’m no expert on economics, but I have always been amazed at how small details can buck megatrends. The fact is, most economic predictions fail, even when there is good evidence the predictor know what he’s talking about. I’m always skeptical of such data, but I do think it’s interesting. A great read.”
  • Auto lender Santander checked income on just 8% in subprime ABS. AT: “There is always a strong play and some tension against the interests of lenders and borrowers, particularly subprime borrowers. If they want a loan and are afraid they’ll be rejected based on credit scores, there is motivational incentive to engage in financial sleight-of-hand to get that loan. Lender, however, can play their own sleight-of-hand if they want the borrowers. This makes me wonder if we’re headed toward a mortgage-like crisis with auto loans, and, if so, we can expect the same old finger pointing game.”
  • Lending Club publishes vintage performance data. GP:”The net cumulative lifetime charge off is looking really ugly. A must see. 2014 was the worst to date, 2015 is even worse, and 2016 is starting even worse. If I were Lending Club I would ring the alarm bell. Do note that in the same time their origination went from $2.7bil/quarter in Q1 2016 to $2bil in Q1 2017. I think this spells trouble for Lending Club.”
  • Elevate Credit Q1 results. GP”Key numbers: loan loss is about 50%. Ebitda 16% going to 20% . Why exactly isn’t their stock price going up?”AT: “Elevate Credit is looking good.”
  • Americans with financial advisors happier about retirement, economy. AT: “This doesn’t surprise me. People who can’t afford financial advisors typically understand less about how the economy works. They approach retirement savings like diagnosing their medical issues.”
  • MPL: Just because I’m disruptive doesn’t mean we can’t be friends.
  • 19 fintech startups in Austin. AT: “Austin is shaping up to be the fintech capital of the Southwest.”
  • Close loopholes for online lenders in New York. GP:”I don’t think online lenders are evading any regulation by working with banks. They are FDIC or OCC regulated. Why do state regulators out of sudden worry about banks doing loans accross state boarders? I don’t understand the root cause of this cruisade.”
  • Online Lending Association opposes California legislation to cap interest rates. GP:”Caping interest rates may look good for the consumer but in fact it forces consumers who wouldn’t qualify under the cap to either be denied or to end up with an illegal money-lender on the black market and pay even more.”
  • If banks wait for APIs to be mandated, it will be too late. GP:”APIs are the way in the future for data , finance, fintech and in general doing business. They offer tremendous scalability and they provide leverage. Most people are concerned about data control if you have an API or just pure control. However there are many ways to control who has access and what they do with the data. Banks have experience with this in capital markets, at least in currency trading as I know first hand. ” AT: “Yes, yes it will.”
  • Empowering fintech with in-memory computing.
  • Small Change focuses on community development.

United Kingdom

European Union

International

Australia

Canada

Africa

News Summary

United States

C&I Loans: Are We Headed For a Recession? (Business Insider), Rated: AAA

Over the past five decades, each time commercial and industrial loan balances at US banks shrank or stalled as companies cut back or as banks tightened their lending standards in reaction to the economy they found themselves in, a recession was either already in progress or would start soon. There has been no exception since the 1960s. Last time this happened was during the Financial Crisis.

Now it’s happening again – with a 1990/91 recession twist.

Commercial and industrial loans outstanding fell to $2.095 trillion on May 10, according to the Fed’s Board of Governors weekly report on Friday. That’s down 4.5% from the peak on November 16, 2016. It’s below the level of outstanding C&I loans on October 19. And it marks the 30th week in a row of no growth in C&I loans.

Based on the Fed’s monthly reports, C&I loans outstanding at the end of April, at $2.095 trillion, were down a smidgen from October’s $2.098 trillion and were down 4.3% from the peak in November. This marks the seventh month in a row of no growth in loans.

C&I loans are tightly connected to the real economy. They’re an indication of what businesses are up to, from a shop needing a loan to buy a piece of equipment to the multinational funding its receivables. C&I loans show whether companies in aggregate are expanding their needs and activities or whether they’re curtailing them.

More typical scenarios would be the prior two recessions. In 2001, C&I loans peaked in February 2001 and then declined. The official recession began in March 2001 and ended in November 2001. But C&I loans kept falling until May 2004.

Where does that leave us today? In the first quarter, GDP grew at a desperately anemic 0.7% annualized, meaning that at this rate, growth for the entire year would be 0.7%. But it’s not a decline. This type of stagnation would be far below the lamentably anemic 1.6% growth in 2016 and the standard issue projection by the Fed of around 2% growth in 2017.

Auto Lender Santander Checked Income on Just 8% in Subprime ABS (Bloomberg), Rated: AAA

Santander Consumer USA Holdings Inc., one of the biggest subprime auto finance companies, verified income on just 8 percent of borrowers whose loans it recently bundled into $1 billion of bonds, according to Moody’s Investors Service.

The low level of due diligence on applicants compares with 64 percent for loans in a recent securitization sold by General Motors Financial Co.’s AmeriCredit unit. The lack of checks may be one factor in explaining higher loan lossesexperienced by Santander Consumer in bond deals that it has sold in recent years, Moody’s analysts Jody Shenn and Nick Monzillo wrote in a May 17 report, which reviewed data required of asset-backed bond issuers that’s recently been made available.

The higher losses in the loans backing the bonds have been visible to investors, Kang said. Investors have been protected because Santander Consumer included extra loans in the securities in case some went bad, for example, creating a buffer against losses, he said. The Moody’s analysts didn’t make any claim that noteholders were at risk as the bond-grader simply looked at the new data available in the deals to provide analysis on how lenders underwrite.

Moody’s findings shed light on risks related to the boom in auto loans, which has contributed to pushing U.S. household debt past $12.7 trillion. While the market for the debt is much smaller than the subprime-mortgage market that triggered the Great Recession, regulators have grown concerned that lenders are taking advantage of borrowers and putting them in cars that they can’t afford.

Loans with low or no credit scores, no co-signer and no income verification made up about 9 percent of the total pool balance of Santander’s bonds, compared with less than 1 percent of AmeriCredit bonds, according to Moody’s.

Fraud Concern

Market participants have become concerned with rising fraud levels, and signs that borrowers are getting smarter at gaming their credit scores to make them appear stronger than they really are. As many as one in five auto-loan borrowers admitted in a recent UBS Group AG survey that their applications for debt contained inaccuracies. Santander Consumer recently convened with a dozen of its competitors to discuss how to combat rising fraud, Bloomberg previously reported.

Around 42 percent of Santander Consumer’s subprime auto loans made between 2009 and 2014 by dealers identified as “high risk” in Massachusetts and Delaware have defaulted or will default, an amount that is substantially higher than the losses in the overall lending portfolio, Moody’s said in a separate report.

Around 42 percent of Santander Consumer’s subprime auto loans made between 2009 and 2014 by dealers identified as “high risk” in Massachusetts and Delaware have defaulted or will default, an amount that is substantially higher than the losses in the overall lending portfolio, Moody’s said in a separate report.

Lending Club Publishes Vintage Performance Data (Lend Academy), Rated: AAA\

Yesterday Lending Club filed a S-3ASR with the SEC which provides comprehensive and updated information on the business.

Below is a chart of interest rates over time for grades A-G. For many grades you can see a ‘V’ shape as interest rates decreased from around 2013 until 2015 when they started to increase.

If you invested across the platform in 2015 your performance remains in line with 2012 vintage although your charge-offs are still elevated from some of Lending Club’s best vintages. 2015 charge off rates at month 19 are 40 bps above 2014, 80 bps above 2013 and 130 bps above 2011 (the best performing vintage of 36 month loans).

While still early, 60 month loans originated in 2015 are performing in line with the 2011 vintage. 2015 charge-offs at month 19 are 100 bps higher than 2013 and 80 bps higher than 2014.

Investors in grades A-C fared much better than those who invested in grades D-G. For most loan grades it is hard to distinguish trends for the 2016 vintage with the exception of E grade loans where you can see charge-offs are trending higher than 2015.

Elevate Credit: Elevated Results (Seeking Alpha), Rated: AAA

The first quarterly report after an IPO is always crucial to understand a company. Companies are typically in major growth modes and investors get the first opportunity to view results in comparison to market expectations. As well, investors will have to substantially modify future results for the additional 14 million shares from the IPO and the expected $14 million dip in annual interest expenses from paying off high cost funding with the IPO proceeds.

For Q1, Elevate Credit passed with flying colors. The fintech beat EPS estimates by $0.05 and exceeded revenue estimates easily.

The biggest issue remains the loan loss rates and cost of funding. For Q1, Elevate had a loan loss provision of 54%. At the same time, net interest expenses of $19.2 million virtually wiped out all of the impressive operating income of $21.6 million.

The company targets reaching adjusted EBITDA of $100 million this quarter. At a current market cap of $315 million, the stock only trades at 3x EBITDA targets.

Americans With Financial Advisors Feel More Prepared For Retirement, Optimistic about the Economy and Less Stressed (PR Newswire), Rated: A

New findings from Northwestern Mutual’s Planning & Progress Study revealed that Americans who receive guidance from financial advisors feel markedly more prepared for retirement. According to the data:

  • 7 in 10 (70%) Americans with advisors said their retirement plan is designed to withstand market cycles compared to 30% of those who do not use an advisor
  • Nearly all those with an advisor (92%) have discussed retirement with someone relative to just half (51%) of those without an advisor
  • People without financial advisors are twice as likely (53%) as those with advisors (27%) to view lack of savings as an obstacle to financial security in retirement
  • 49% of people without an advisor have taken no steps to address the possibility of outliving their savings – three times as many as those with an advisor (15%)

MARKETPLACE LENDING: JUST BECAUSE I’M DISRUPTIVE DOESN’T MEAN WE CAN’T BE FRIENDS! (All About Alpha), Rated: A

Mark Shore, chief research officer of Shore Capital Research, and an adjunct professor at DePaul University, has prepared an “overview” of marketplace lending for institutional investors and wealth managers.

The grey bars in the above graph represent recessions. The curve flattened out for a period in the early 1980s, carrying it through the two recessions of that period, then resumed its upward path. It flattened out again in the early 1990s, and again soon resumed that path., It was utterly unaffected by the dotcom bust and the resulting recession at the beginning of the new millennium. But it was thrown briefly into reverse by the global financial crisis less than a decade later. Still, here too, it has resumed its upward path.

What all this establishes, in Shore’s view, is that with total outstanding consumer credit at $3.7 trillion, MPL has room for further growth.

19 fintech startups in Austin that are shaking up finance (Built in Austin), Rated: A

Austin is emerging as a center for fintech innovation. Entrepreneurs are collaborating with the financial sector steeped in centuries-old traditions, and creating a new way to approach this age old industry. Here are some of the most prominent leaders in Austin fintech, along with a few startups worth keeping an eye on.

  1. Creditcards.com
  2. Founded in 2004, World First provides businesses with currency exchange and international payment solutions across the world.
  3. Buzz Points developed a loyalty and rewards program, rewarding customers for going local with businesses and financial institutions, instead of buying and banking from national chains.
  4. Self Lender launched in September 2014 to help consumers build good credit.
  5. Student Loan Genius offers a leg up with a 401k-style financial perk to help employees pay off their school debt faster.
  6. EasyPayDirect gives online merchants an easy way to accept payments, plain and simple.
  7. Banker’s Toolbox provides software-based solutions and consulting to small banks to help detect fraud, money laundering and other financial crimes.
  8. Able Lending
  9. Honest Dollar launched at SxSW and raised $3 million to offer alternative, streamlined retirement savings plans directly to workers.
  10. SimplyTapp launched its mobile payments platform for card issuers and developers in the summer of 2014 to ultimately allow consumers to make easy payments from their smartphones in lieu of physical cards or cash.

See the other 9 here.

Close loopholes for online lenders, N.Y. regulator urges Albany (American Banker), Rated: A

Online lenders are evading New York regulations by claiming their loans are “made” by federally chartered or out-of-state partner banks, the state’s top financial regulator told lawmakers in Albany Monday.

Online Lending Association Opposes California Legislation to Cap Interest Rates (Crowdfund Insider), Rated: A

The Online Lenders Alliance (OLA) has sent a letter to the California Assembly Apparitions Committee stating their “strong opposition” to AB 784.  This bill, if enacted into law, will set a rate cap for consumer loans between $300 and $5000.  OLA states this legislation has the potential to limit an important source of funds of underbanked consumers in California.

If banks wait for APIs to be mandated, it will be too late (American Banker), Rated: A

Many executives believe the U.S. will get a similar PSD2 mandate, and they fear that the U.S. version of the regulation will force them to give up unilateral ownership of a treasure trove of data and cause further erosion to their bank’s bottom line. To them, designing, building, securing and maintaining an API for consumers, fintechs and others to use is a scary, losing proposition. The reality, however, is that the data-sharing model is essential for customer retention. Instead of fearing potential regulation, banks should embrace the open banking model now.

First, with the flood of technological change hitting financial services, there are compelling reasons APIs will soon emerge as a truly transformational innovation that makes consumers want to stay with their bank. APIs will have the same effect on retention while improving the consumer’s experience to a larger degree; they make managing their financial lives easier. If a customer can get that convenience through his/her bank, it will be an even greater incentive to stay with that bank.

Empowering fintech with in-memory computing (Bob’s Guide), Rated: A

Empowering Fintech with In-Memory Computing, a new whitepaper by GridGain Systems, discusses how in-memory computing is one of the key technologies powering the Fintech revolution.

a) In-memory data grids are inserted between the application and database layers to cache disk-based data from RDBMS, NoSQL, and Hadoop databases in RAM. Data grids typically replicate and partition data caches automatically across multiple nodes and enable on-demand scalability simply by adding new nodes to the cluster. Some data grids offer ACID-compliance, as well as support for all popular RDBMS.

b) In-memory SQL grids supplement or replace a disk-based RDBMS, utilising ODBC and JDBC APIs to communicate with the SQL grid. An in-memory SQL grid typically requires no custom coding and is horizontally-scalable, fault-tolerant and ANSI SQL-99 compliant. It should also support all SQL and DML commands such as SELECT, UPDATE, INSERT, MERGE and DELETE queries. Some in-memory SQL grids also support geospatial data.

c) In-memory compute grids enable distributed parallel processing of resource-intensive compute tasks. They typically offer adaptive load balancing, automatic fault tolerance, linear scalability and custom scheduling. They may also be built around a pluggable service provider interface (SPI) design to offer a direct API for Fork-Join and MapReduce processing.

d) In-memory service grids provide control over services deployed on each cluster node and guarantee the continuous availability of all deployed services in case of node failures. Most in-memory service grids can automatically deploy services on node startup, deploy multiple instances of a service, and terminate any deployed service.

e) In-memory streaming and continuous event processing establish windows for processing and run either one-time or continuous queries against these windows. The event workflow is typically customizable and is often used for real-time analytics. Data can be indexed as it is being streamed to make it possible to run extremely fast distributed SQL queries against the streaming data.

f) In-memory Apache Hadoop acceleration provides easy-to-use extensions to the disk-based Hadoop Distributed File System (HDFS) and traditional MapReduce, delivering up to ten times faster performance. The in-memory computing platform can be layered on top of an existing HDFS and used as a caching layer offering read-through and write-through, while the compute grid can run in-memory MapReduce.

New real estate crowdfunding site focuses on community development (Curbed), Rated: B

That’s the promise behind Small Change, a new real estate fundraising platform Picker founded that’s designed to help communities play a bigger role in their own redevelopment. Often, smaller projects rely on a grab bag of funding, including community development block grants and scores of small investors, making the process of assembling capital time-consuming. By creating a platform that anybody with enough money can use—some projects take investments as small as $500—Small Change seeks to democratize and streamline the entire funding process and help buttress “transformational” developments.

Since starting last summer, the platform has raised more than half a million dollars, and Picker was named a Global Urban Innovator by the NewCities Foundation,

United Kingdom

Funding Circle gets FCA seal of approval (Financial Times), Rated: AAA

Funding Circle, the largest peer-to-peer company in the UK, has received authorisation from the City watchdog in a seal of approval for the burgeoning small business lending site.

Authorisation will enable Funding Circle to expand and launch its Innovative Finance ISA, which allows individuals to lend to borrowers in return for income within a tax-free wrapper.

Some robo-advisers are more equal than others (City A.M.), Rated: A

When people are deciding what to do with their hard-earned money, they have several options: seeking out the support of people they know; talking to their bank, paying an expert independent financial advisor (IFA), or – they can go online.

The report shows that even the wealthiest investors prioritise seeking financial advice online before doing anything else.

We hear a lot about the advice gap in this country, and rightly so. Traditionally this gap has been based on cost. But, as our aforementioned research attests, this is about more than money.

It’s also about time and access.

But the rise of robo-advisers has done little to help consumers access advice and close the knowledge gap.

‘My cash is going nowhere at the bank. Is peer-to-peer the answer?’ (i News), Rated: A

After the financial crisis, the Bank of England cut its base rate to just 0.5 per cent to reduce the cost of borrowing, get people and businesses spending, and boost the economy. Since then, the base rate has only moved once – down again, after the EU referendum, to 0.25 per cent.

But to play devil’s advocate, your comparison between depositing money with a bank and investing in a business is a little dubious – because of the disparity in risk.

That business could fail and you could lose your money, so the potential return has to be higher to persuade you to take that risk. With cash, the risk of losing money is negligible (assuming you don’t hold more than £85,000 – the limit of the FSCS cover – with any one institution), and you pay a price for that security.

When you lend, there is always a chance the borrower will default. However, P2P platforms mitigate the risks in two ways. First, by developing options that let you lend to dozens, or even hundreds, of borrowers at the same time, they enable you to spread your risk and still make money even if a small number default. Second, the platforms build up provision funds to compensate you in defaults.

Lendy produces range of educational videos (Bridging&Commercial), Rated: B

Peer-to-peer (P2P) platform Lendy has announced the launch of a new range of educational videos.

The series includes a new corporate video explaining the benefits of P2P lending and featuring genuine users from the site.

Other videos include a short programme on why investors like P2P lending and an animated guide showing new investors how to get the most from the platform.

European Union

EstateGuru Says More than €1 Million in Interest Paid to Real Estate Investors (Crowdfund Insider), Rated: AAA

Peer to peer property lender EstateGuru has shared that investors on its platform have now earned in excess of €1 million. The Estonia-based company said that nearly 6900 investors from 39 different countries have earned, on average, 12.63% since platform launch in 2014. EstateGuru also reports there has been no loss of capital on the platform.

Transferwise Borderless Accounts Allows To Set Up Free UK Account and Free EUR Account (P2P-Banking), Rated: A

Transferwise just announced that they offer a new Transferwise borderless account which will hold up to 15 currencies and offers local bank accounts in GBP, EUR and USD. The account is advertised as free (no setup fee) and without any monthly fees.

International

Goldmoney Invests in, Partners with U.K.-Based P2P Lending Platform (Geology for Investors), Rated: A

Goldmoney Inc. (TSX:XAU) (“Goldmoney”), a precious metal financial service and technology company, today announced an investment in and partnership with Isle of Man-based investment company LBT Holdings Ltd. (“LBTH”), parent company of Lend & Borrow Trust Company Ltd. (“LBT”), a U.K.-based online platform offering auction-rate peer-to-peer lending and borrowing collateralized by precious metals.

The private investment gives Goldmoney the right to nominate a board member and the right to provide precious metal dealing and storage solutions to LBT clients. Goldmoney may also elect to implement facilities with LBT whereby eligible clients with a Goldmoney Holding – U.K. residents and businesses initially, with other countries added over time – can access LBT auction rates and earn interest income from loans fully secured by precious metal collateral.

Change is part of fintech maturation process (Bankless Times), Rated: A

Marketplace lenders need to adjust if they are to mature into lasting, profitable businesses, John Zepecki believes.

In most sectors the larger players have the money to spend on the mobile and digital experience, while smaller competitors can struggle, Mr. Zepecki said. This is true for fintechs, which are taking on established entities. That’s a tough act, but technology makes it easier by allowing new entrants to skip a few steps.

Where many fintechs struggle is in developing a long-term relationship with the customer, Mr. Zepecki explained. Some serve specific niches such as franchisees or equipment finance. Because the product has a narrow focus, they have to continually work on customer acquisition as repeat business rates are lower. Even the biggest fintechs are struggling to generate repeat business and have to turn to additional rounds to maintain capital flow.

Lending Club and OnDeck are having rough starts so far this year as their problems have followed them from 2016, Mr. Zepecki said. If repeat customers fail to keep coming back the high cost of acquisition, coupled with the riskiness of some loans,  will make it challenging for them to achieve sufficient and lasting profitability.

Financial institutions are working to solve the friction problems alternative lenders have addressed, so if the upstarts do not have an effective long-term strategy their area of differentiation shrinks and they risk losing their spot in the marketplace.

Australia

How Pocketbook went from a Sydney spreadsheet to a fintech with 300,000 users (Financial Review), Rated: A

“Pocketbook started out as a spreadsheet,” Singh told Business Insider.

That spreadsheet was then developed into an app in Singh’s living room, and launched commercially on October 2012.

Fast forward almost five years and the software now has 300,000 users.

The app also lets users know how much they can “safely spend” in the coming period, after analysing the person’s income and expenditure history.

Canada

Canadian FinTech startup Mylo launches mobile app and raises $ 1.25M (Marketwired), Rated: A

Mylo Financial Technologies (Mylo), a Montreal-based FinTech startup that offers a mobile personal finance platform to help Canadians achieve their financial goals, has successfully raised $750K and completed its pre-seed financing round. This latest raise brings Mylo’s current financing to $1.25M, led by Ferst Capital Partners (FCP) with the participation of leading FinTech angel investors.

The company raised $500K at the ideation stage from Ferst Capital Partners in January 2016 as one of its Foundry startups. It has raised an additional $750K in May 2017, closing its pre-seed round of $1.25 million.

Africa

Fintech can unlock business potential of African banks (fin24), Rated: B

Fintech is turning traditional banking on its head and is disrupting the way ordinary Africans manage and use their money.

Speaking at a Fintech Innovation Business Forum hosted by the Cape IT Initiative and Innovation Norway, Arise CEO Deepak Malik highlighted the importance of financial service providers investing in this critical sector through collaboration with fintech innovators.

“In this connected digital era there is a need for smart financial solutions that add value to people’s lives. Fintech has the potential to reimagine traditional banking products and it is important that banks use this technology to unlock their full economic potential,” said Malik.

Authors:

George Popescu
Allen Taylor

Wednesday May 17 2017, Daily News Digest

developed ex-us vs usa total market etf

News Comments Today’s main news: Earnest is looking for a buyer. SoFi gets into wealth management. DBRS assigns provisional ratings to SoFi Professional Loan Program 2017-C LLC. Prosper issues new securitization backed by George Soros. Lending Club hires PayPal exec as new president. TransferWise reaches profitability. Renren announces 2016 results, unaudited. Today’s main analysis:  Capital One forays into digital ID. Today’s […]

developed ex-us vs usa total market etf

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

Asia

South America

News Summary

United States

SoFi gets into wealth management (TechCrunch), Rated: AAA

SoFi wants to be at the center of its members’ financial lives, and believes the best way to do so is to provide new products that complement its existing portfolio of student loan, mortgage and other loans. Today the company is announcing the launch of SoFi Wealth, a product it believes will compete with Wealthfront, Betterment and other low-cost wealth management platforms.

But the company is looking to go a step further than just creating yet another roboadvisor. SoFi Wealth will offer access to non-commissioned, licensed financial advisors that members can reach by phone or by chat to answer investment questions or just help them improve their overall financial health.

Wealth management customers will get the same benefits as other members, including access to community events, career coaching and discounts on other SoFi products. Management fees will be waived for SoFi loan borrowers, but otherwise are just 0.25 percent and will be waived for the first $10,000 invested.

People interested can sign up with as little as a $500 initial investment or monthly recurring deposit of $100 for access to any of its low-cost ETFs.

Capital One forays into digital ID, aiming to leverage KYC know-how (American Banker), Rated: A

Capital One Financial is trying to turn the expense of thoroughly vetting bank customers into a moneymaker with new digital identity products.

In so doing, Capital One is one of the first in the U.S. to test if businesses will pay banks to check users’ identities, and if consumers will sign into websites through their banks the way they use social media accounts. Since banks already have to collect and verify sensitive information, to comply with know-your-customer regulations and to prevent fraud, they theoretically could leverage this work and expertise for other businesses. Consumers, in turn, would have fewer passwords and usernames to remember and would not have to give out sensitive information such as Social Security numbers quite as often. Banks in Europe and Canada have begun to offer such services.

It is a market that several U.S. banks are dipping their toes into. One of the most prominent is USAA; in the past several years it has acquired multiple digital identity firms. This year it also granted development rights to some of its patented security technologies to Persistent Systems to create digital authentication tools.

DBRS Assigns Provisional Ratings to SoFi Professional Loan Program 2017-C LLC (DBRS), Rated: AAA

DBRS, Inc. (DBRS) has today assigned provisional ratings to the following classes of Post-Graduate Loan Asset-Backed Notes (the Notes) issued by SoFi Professional Loan Program 2017-C LLC (SoFi 2017-C):

— $96,069,000 Class A-1 rated AAA (sf)
— $230,156,000 Class A-2A rated AAA (sf)
— $175,653,000 Class A-2B rated AAA (sf)
— $41,000,000 Class B rated AA (sf)
— $18,000,000 Class C rated A (sf)

RATINGS

Issuer Debt Rated Rating Action Rating Trend Notes Published Issued
SoFi Professional Loan Program 2017-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Provis.-New AAA (sf) May 16, 2017 US
SoFi Professional Loan Program 2017-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-2A Provis.-New AAA (sf) May 16, 2017 US
SoFi Professional Loan Program 2017-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-2B Provis.-New AAA (sf) May 16, 2017 US
SoFi Professional Loan Program 2017-C LLC Post-Graduate Loan Asset-Backed Notes, Class B Provis.-New AA (sf) May 16, 2017 US
SoFi Professional Loan Program 2017-C LLC Post-Graduate Loan Asset-Backed Notes, Class C Provis.-New A (sf) May 16, 2017 US

Lending Club hires Paypal global credit head as new president (Financial Times), Rated: AAA

Lending Club has hired the head of Paypal’s global credit business as its new president, amid efforts to get on the front foot after last year’s loan mis-selling scandal.

Steve Allocca, PayPal’s vice-president of global credit, will start work at Lending Club next week, the company said in a statement on Tuesday, reporting to Scott Sanborn, chief executive. He will lead Lending Club’s efforts to deliver credit to more people across an expanding range of product categories, the company said.

PayPal Credit is the successor to BillMeLater, which PayPal’s then-parent, eBay, bought in 2008. The idea was to expand the company’s financial offerings, help merchants get more business and beef up its fraud detection tools.

Before joining PayPal in 2013, Mr Allocca had various consumer-facing roles at Wells Fargo after training as a banker at First Chicago, a bank bought by Bank One and then JPMorgan Chase.

US marketplace lender Prosper issues new securitization backed by George Soros (AltFi), Rated: A

US marketplace lender Prosper is prepping a $450.5m consumer loan ABS transaction that is expected to close on May 24, 2017.

Prosper announced it had agreed a $5bn programme of securitizations backed by a consortium of investors including credit Suisse and George Soros’  Soros Fund Management LLC.

Online Lender Earnest Said to Be For Sale (Crowdfund Insider), Rated: A

According to a report by Bloomberg, Earnest is up for sale. The San Francisco based online lender is said to have an asking price of $100 million. Founded in 2013, Crunchbase reports Earnest has raised over $99 million not including an undisclosed sum in a VC round in January 2016 and $200 million of debt financing.

DBRS Confirms Ratings on Three OnDeck Asset-Backed Securities Transactions (DBRS), Rated: A

DBRS, Inc. (DBRS) has today conducted a review of the outstanding public ratings of five securities from three structured finance asset-backed securities transactions: OnDeck Asset Securitization Trust II LLC, Series 2016-1; OnDeck Account Receivables Trust 2013-1 LLC; and Prime OnDeck Receivables Trust II, LLC. Of the five ratings reviewed, all were confirmed at their current rating levels.

RATINGS

Issuer Debt Rated Rating Action Rating Trend Notes Published Issued
OnDeck Asset Securitization Trust II LLC, Series 2016-1 Series 2016-1 Asset Backed Notes, Class A Confirmed A (sf) May 16, 2017 US
OnDeck Asset Securitization Trust II LLC, Series 2016-1 Series 2016-1 Asset Backed Notes, Class B Confirmed BBB (low) (sf) May 16, 2017 US
OnDeck Account Receivables Trust 2013-1 LLC Class A Revolving Loan Note Confirmed A (low) (sf) May 16, 2017 US
OnDeck Account Receivables Trust 2013-1 LLC Class B Revolving Loan Note Confirmed BBB (low) (sf) May 16, 2017 US
Prime OnDeck Receivables Trust II, LLC Class A Loans Confirmed A (low) (sf) May 16, 2017 US


SoFi’s CEO wishes the US had less student loan debt
(TechCrunch), Rated: A

SoFi was founded on the business of helping high-earning graduates refinance their student loans. But perhaps ironically, CEO Michael Cagney thinks today’s record amount of student loan debt is a bad thing.

“When you go to a school and take a loan out, no one explains what you can afford, how much money you’re going to make when you graduate and how much you’re able to pay back,” he explained.

Meanwhile, universities aren’t incentivized to provide that education because it’s in their interest to have students matriculate, and there’s no downside to the college when a graduate is unable to pay back their loans.

Money360 Closes $ 45M in Commercial Real Estate Loans in April, Breaks Monthly Record (Marketwired), Rated: A

Money360, a commercial real estate marketplace lending platform, closed more than $45 million in loans in April, the company announced today. This brings the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.

The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:

  • A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.
  • A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.
  • An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.
  • A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.
  • A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.
  • A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.
  • A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California.

Automation Drives Retirement Savings to New Heights (Financial Advisor IQ), Rated: A

Financial advisors may want to pay closer attention to automation in retirement savings accounts. Auto-escalation and auto-enrollment played major roles in how Fidelity retirement savings accounts reached new highs this year, Bloomberg writes.

Among the 27% of employees who raised their contribution, 50% did so in such auto-escalation accounts, Jeanne Thompson, a senior vice president at Fidelity, tells the news service. And for workers under 30, automated increases accounted for a whopping 68% of the rise in savings rates, according to Fidelity’s analysis.

SoFi CEO explains how his fintech company will make banks ‘more… (CNBC), Rated: A

CBC National Bank Ranked 3rd Highest Customer-Rated Mortgage Lender in First Quarter by LendingTree (PR Web), Rated: A

CBC National Bank, headquartered in Fernandina Beach and with branches in Fernandina Beach, Ocala and The Villages, Fla., and Beaufort and Port Royal, S.C., today announced that it has been named by LendingTree as the 3rd highest customer-rated mortgage lender in the first quarter of 2017.

Online loan marketplace LendingTree said its rankings feature top lenders in multiple loan product categories, including mortgages, personal loans, business loans, and auto loans. CBC National Bank earned the 3rd highest ranking in the mortgage category.

Can financial technology unite Republicans and Democrats? (The Hill), Rated: A

Last year, the Office of the Comptroller of the Currency (OCC) set a course for the future of financial services. Now it appears that the agency is adrift without a captain, and a storm is upon it.

The fintech charter proposal may not survive legal challenge. The OCC has said that it has authority to issue fintech charters to non-depository companies if they engage in other “core banking activities,” such as paying checks or lending money. But that position is based only on the OCC’s own 2003 regulation, which the state regulators are also challenging. And, as Sens. Merkley and Brown noted, other SPNBs that do not accept deposits (bankers’ banks, credit card banks, and trust banks) are specifically authorized by Congress under the National Bank Act.

Congressional Republicans and Democrats have both recognized the importance of the issue, and Congress is the right institution to explore the implications for the burgeoning fintech industry and the federal-state banking system. And unlike the highly partisan warfare over the Dodd-Frank Act, the SPNB charter provides a rare opportunity for members of both parties to work together to fully examine the risks and benefits of providing a national bank charter to fintech companies.

Finra chairman John Brennan says DOL rule has raised standard for financial advice (Investment News), Rated: A

Finra chairman John J. Brennan said on Tuesday that even if the Labor Department’s fiduciary rule is repealed, it has elevated and put into plain language the idea of providing investment advice that’s better for clients’ returns than for financial advisers’ revenue.

The DOL regulation, which would require financial advisers to act in the best interests of their clients in retirement accounts, was supposed to be implemented on April 10. That date was pushed back to June 9 so that the agency can reassess the measure under a directive from President Donald J. Trump that could lead to its modification or repeal.

If the DOL rule meets its demise, the concept will live on at the Securities and Exchange Commission and at Finra, the broker-dealer self-regulator, Mr. Brennan said.

Finra president and CEO Robert Cook said he supports the concept of raising advice requirements for brokers.

Clayton’s SEC Likely to Roll Back Enforcement (Financial Advisor IQ), Rated: A

The SEC’s new chief is likely to focus on well-functioning capital markets and capital formation rather than enforcement, Todd Cipperman writes in the Hill.

But Clayton’s “Wall Street pedigree” and his opening statement to the Senate Banking Committee suggests that he will not spearhead enforcement to the same extent as his predecessor, Mary Jo White, Cipperman writes.

As a securities lawyer to Wall Street firms, Clayton will likely focus on broader policy goals and regulations vetted by the financial industry, in part by putting more emphasis on the Division of Investment Management and the Division of Trading and Markets rather than enforcement, according to Cipperman.

But Clayton’s reign isn’t likely to result in unregulated markets. Clayton cites as role models former SEC chairmen Arthur Levitt and William Donaldson, both of whom were tough on the industry despite being insiders, according to Cipperman. Because of that — and because regulatory change occurs slowly — advice firms should stay focused on compliance, he writes.

Real estate crowdfunding firm graduates to first apartment property (IBJ), Rated: A

A local startup that uses crowdfunding to invest in residential real estate is starting to make bigger acquisitions by progressing from rental homes to apartment complexes.

Jacob Blackett and Sterling White launched Holdfolio in October 2014 by attracting investors to collectively purchase run-down rental houses that the company could renovate with hopes of turning a profit.

Now the company has acquired its first apartment property, in the Garfield Park neighborhood on the city’s near-south side, and has another under contract in Beech Grove.

Holdfolio buys properties and bundles them into a portfolio. The residential properties are renovated, and outside investors can buy equity stakes in the properties via an online platform. They receive returns from rents paid for the properties.

The company so far has drawn about 100 investors who have forked over a minimum of $10,000 each. Holdfolio says they have reaped an 8 percent average annual return on their contributions.

The company targets properties that are considered distressed and in areas of the city that can benefit from the company’s investment. Holdfolio typically purchases the homes it targets for roughly $25,000.

Elevate Appoints Denise Russell as Head of Enterprise Risk Management (BusinessWire), Rated: B

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the appointment of Denise Russell as Chief Risk Officer, effective immediately.

As Chief Risk Officer, Russell will oversee internal audit, regulatory compliance and enterprise risk management operations including risk identification and mitigation activities. She will work closely with the Elevate executive and legal teams to identify opportunities for enterprise risk reduction in support of the company’s strategic plan. Russell will lead a team of more than 15 compliance, audit and risk management professionals.

United Kingdom

Fintech unicorn TransferWise reaches profitability, planning ‘new financial services (TechCrunch), Rated: AAA

Six years after launch, TransferWise, the London-headquartered international money transfer startup, which was most recently valued at a reported $1.1 billion, has announced that it has finally reached profitability this calendar year and is “cash-generating”.

Breaking this down a little, the company says it’s currently seeing £8 million per month in revenue, which extrapolates to a £100 million revenue run-rate, and is growing 150 per cent year-on-year and expecting to do the same this year. It also says over £1 billion is being moved every month, saving its customers what it claims to be over £1.5 million per day in foreign exchange fees.

With that said, let me speculate on what products I think the company could quite easily move into, should it choose to do so. Friend-to-friend or P2P payments within the same country, along the lines of Paypal’s Venmo or Barclays Pingit, doesn’t seem a stretch, given that TransferWise already has much of that infrastructure already in place. It also seems odd that the company doesn’t offer its own debit card with low cost currency exchange when spending abroad, for example.

Were TransferWise to do the latter, that would see it go up against Revolut, and a ton of other much more recent fintech startups that utilise MasterCard’s low exchange rate, including all-your-cards-in-one app Curve, of which Hinrikus himself is an investor.

P2P Property Lender Lendy Tops £300 Million. (Crowdfund Insider), Rated: AAA

Peer to peer property lender Lendy has surpassed £310 million in originations with £50 million coming in last 100 days. The P2P lender states that investors and developers are responding to post-Brexit slowdown in bank lending.  Lendy adds that quick turnaround, security and low Loan to Value (LTVs) are key to their growth. Lendy says there are over 16,000 registered users on their site.

Lendy highlighted several UK property investments recently listed on their platform:

  • £7.5 million for the purchase and redevelopment of a commercial building in Marylebone, central London
  • £5.7 million for the development of a major residential building at Liverpool waterfront
  • £2.4 million for the development of a major student accommodation complex in Huddersfield

CreditEase’s Tang Joins Oxford Said’s New Global Leadership Council (PR Newswire), Rated: A

CreditEase announces today that its founder and CEO Ning Tang has been appointed to the University of Oxford’s Said Business School’s (“Oxford Said”) new Global Leadership Council. This council of senior global leaders will provide independent advice and guidance to the school.

Said Business School is a vibrant and innovative business school embedded in the historic and prestigious University of Oxford. The school offers programs and research opportunities that have global impact and help individuals and organizations find ideas and valuable network to tackle world-wide problems. As one of the fastest growing business schools in the world, the school is ranked 1st in the UK in the FT’s ranking of open enrollment programs in 2016, and 2nd globally for aims achieved in the FT ranking of MBA programs in 2017.

BondMason looks to non-P2P investments (P2P Finance News), Rated: A

PEER-TO-PEER investment manager BondMason is increasing its exposure to non-P2P lenders to broaden its offering.

The firm aims to get its clients a seven per cent return by selecting P2P loans across approved platforms on their behalf, but chief executive Stephen Findlay says he is now looking outside the industry to provide more diversification for investors.

BondMason is also working to increase awareness among financial advisers and recently partnered with professional body the Chartered Institute of Securities and Investment (CISI) to compile a report on the P2P sector.

Fintech competition heating up in money transfer space (AltFi), Rated: B

Revolut has quietly allowed users to make international money transfers in roughly 3-5 days for some time. These transfers are free for amounts of up to £5,000, with a 0.5 per cent charge applying for larger amounts.

Now there is a new Turbo option, which will see international transfers delivered in 1-2 business days, for a flat rate fee of £5 for amounts of up to £5,000, again with a 0.5 per cent fee applied for larger sums.

China

Renren Announces Unaudited Fourth Quarter and Fiscal Year 2016 Financial Results and Update on Proposed Transactions (PR Newswire), Rated: AAA

Fourth Quarter 2016 Highlights

  • Total net revenues were US$20.3 million, a 49.8% increase from the corresponding period in 2015.

    • Advertising and Internet Value-Added Services (IVAS) net revenues were US$10.8 million, a 31.4% increase from the corresponding period in 2015.
    • Financing income was US$9.5 million, a 77.8% increase from the corresponding period of 2015.
  • Gross profit was US$4.4 million.
  • Operating loss was US$16.4 million, compared to an operating loss of US$29.0 million in the corresponding period in 2015.
  • Net loss attributable to the Company was US$93.3 million, compared to a net loss of US$53.0 million in the corresponding period in 2015.
  • Adjusted net loss (1) (non-GAAP) was US$87.9 million, compared to an adjusted net loss of US$43.2 million in the corresponding period in 2015.

Fiscal Year 2016 Highlights

  • Total net revenues were US$63.4 million, a 54.1% increase from 2015.
    • Advertising and IVAS net revenues were US$34.0 million, a 4.7% increase from 2015.
    • Financing income was US$29.4 million, compared to US$8.6 million in 2015.
  • Gross profit was US$11.6 million, compared to US$4.4 million in 2015.
  • Operating loss was US$73.0 million, compared to an operating loss of US$105.3 million in 2015.
  • Net loss attributable to the Company was US$185.4 million, compared to a net loss of US$220.1 million in 2015.
  • Adjusted net loss (1) (non-GAAP) was US$161.8 million, compared to an adjusted net loss of US$193.3 million in 2015.

(1) Adjusted net loss is defined as loss excluding share-based compensation expenses and amortization of intangible assets. See “About Non-GAAP Financial Measures” below.

CDB Capital Leads $ 42M Round In Chinese Fintech Firm Wacai (China Money Network), Rated: A

China Development Bank Capital, an investment unit under China Development Bank, has led a US$42 million strategic investment in Chinese financial technology firm Wacai.

Chinese investment firms CBC Capital, New Horizon Capital, Qiming Venture Partners and Ally Bridge Group also participated in the financing round, the company announced today. Today’s investment brings the company’s total fundraising to over US$200 million cumulatively.

The company has cumulative users of 160 million and has facilitated wealth management product transactions in the range of RMB100 billion (US$14.5 billion) annually, it says.

European Union

Twino and KPMG publish European alternative lending index (Finextra), Rated: AAA

TWINO, Europe’s fastest growing peer-to-peer (P2P) lending platform, has today released the first ever Alternative Lending Index (ALI) in conjunction with KPMG.

The report compares lending environments across Europe over the period 2010- 2016.
Highlights
· Highest ranked countries for alternative lending in Europe are: Hungary, Slovenia, Latvia, Poland, Romania, Greece and Ireland
· Countries with largest potential in terms of overall lending market size and alternative lending environment are: Poland, Greece and Ireland
· In 2010-2016 total density of credit institutions per 1 million inhabitants decreased from 19 to 15
· Aggregate European credit gap has increased from close to breakeven in 2010 to 12 percentage points of GDP
· Significant differences in availability of financing for household and corporate borrowers across countries:
· UK significantly higher for corporate borrowers than for households
· Credit gap for the UK and France is negative, indicating lending demand is met with a surplus
· Germany is lending market leader – total outstanding loans reach EUR 2.5 trillion, followed by France, where outstanding loans are EUR 2.1 trillion
· Ireland top country by number of credit institutions per 1 million inhabitants, followed by Austria and Finland
Currently the countries ranked as the most favourable for the expansion of alternative lending are Hungary, Slovenia, Latvia, Poland, Romania, Greece and Ireland whilst France, Germany, Netherlands, Austria, Finland and Sweden show highly efficient lending markets and therefore the lowest ALI.

Interview with the Founders of DoFinance Janis and Viesturs Kulikovoskis (P2P-Banking), Rated: A

What are the three main advantages for investors?

  • Potential investment risks for investors are well-balanced and brought to minimum: all loans are secured with a BuyBack guarantee. If the borrower doesn’t pay back the loan, you don’t have to wait for an extra 30 days (after the investment due date) to get your funds back – your money is available right away;
  • You have access to your money at any timeif you decide to withdraw invested money before the due date, you can receive your money starting from 14 to 28 days after your request with (or without) accumulated interest, depending on your chosen investment plan and preferred withdrawal term;
  • Your money never sits still; it is always earning. Auto Invest program on DoFinance reinvests funds the moment the borrower returns the loan and the investor’s money becomes available.

According to the press release Alfa Finance Group has invested 2 million Euro in launching DoFinance. Can you please describe what the money was used for?

The money was invested in technologies to create the platform and in building our loan portfolio.

What was the greatest challenge so far in the course of launching DoFinance?

The greatest challenge was to develop a risk assessment tool that would minimize the risk of failure to repay the loan, be effective and secure. Risk assessment and management is our strength, and all our loans are secured with a BuyBack guarantee. If the borrower doesn’t pay back the loan, you don’t have to wait for an extra 30 days (after the investment due date) to get your funds back – your money is available right away.

Another challenge was becoming available also to Asian investors. DoFinance is the first European-based P2P lending platform to open customer center in Indonesia, bringing together European customer centered approach and Asian investors. We are happy to be the first ones to offer such individual approach to all our customers and give the chance to Asian investors to invest in Europe.

Is DoFinance open to international investors?

Yes, DoFinance is available to private individuals holding a bank account in EU, EEA countries as well as Asian countries which are not included in the lists of high-risk and non-cooperative jurisdictions and international sanctions (Indonesia, Singapore, Vietnam etc.).

What is your opinion on the planned upcoming regulation in Latvia for p2p lending?

Fintech industry has a potential to become Latvia’s success story which would contribute to both image and prosperity of the country, thus there must be healthy balance between industry regulation and its self-regulation. The entire financial industry and eventually the consumer will benefit from the development of FinTech as banks and FinTech companies will start cooperating when it comes down to providing financial services, customer service etc. Therefore, it is the state’s responsibility to create environment where these companies will stand and where intellectual capacity of labor will increase and taxes will be paid. At the same time, the regulation must ensure transparency and monitoring – simply because then dishonest entrepreneurs wouldn’t be able to harm investors.

International

US AND GLOBAL STOCKS REMAIN STRONG – WEEK OF MAY 16, 2017 (SoFi), Rated: AAA

U.S. stocks are strong; developed world stocks are rallying, but still uncertain; and despite some investors’ fears, emerging markets are still appealing. Here’s what’s been happening in the market over the past few weeks.

U.S. equities remain strong
United States equities are continuing to look very attractive after a positive jobs report and an impressive earnings season. The hiring report in early May was more positive than expected with 211,000 jobs added in April, bringing unemployment to a 10-year low. There was also continued wage growth, meaning that, on average, households were getting a bump in income. This increased spending power in the economy bodes well for U.S. equities (stocks).

Earnings season has also revealed impressive corporate earnings growth. While it’s relatively easy to have nowhere to go but up after negative earnings growth in the first two quarters of last year, it’s still reassuring to see higher company earnings and sales growth pushing stock prices up.

Developed world equities still uncertain despite rally
Over the past two weeks, stocks of companies in the developed world outside the U.S. are catching up after lagging behind for much of the post-U.S. election rally. This is largely because European equities were held back due to uncertainty about which way the French election would go. With Macron’s victory and a smooth election in the Netherlands back in March, developed world (excluding U.S.) equities have begun to close the gap.


In Japan, equities remain reliant on Japanese policy makers to lead the country out of its current disinflationary state, but current efforts inspire little confidence based on the failure of similar policies in the past.

Emerging markets hold potential
The cyclical recovery story in emerging markets is still holding our attention. After years of lagging behind the developed world with recessions in Brazil and Russia, we are finally seeing growth at a faster pace. Global trade is accelerating once more, and the positive growth in the U.S. and E.U. is expected to further boost emerging market economies as demand for exports increases.

There have been some recent signs of slowed growth in China. This is mostly due to the fact that China recently raised interest rates in order to curb property price inflation.

Backed by Chinese gov, Silk Ventures is a new $ 500M fund to invest in European and U.S. ‘scale-ups’ (TechCrunch), Rated: A

European and U.S.-based tech ‘scale-ups’ with Asia ambitions, rejoice. Outing today is a new $500 million VC fund from Silk Ventures, and backed in part by the Chinese government.

It plans to invest across all stages from Series-A upwards, and says that, although it will remain open to tech startups from any sector, a key focus will be “deep tech and science, industry 4.0 technologies, such as Internet of Things and robotics, fintech and medtech companies”. I’m told that the first investments from the fund will be announced in July.

Headquartered in London but with offices in Menlo Park, Beijing and Shenzhen, too, Silk Ventures took its tentative first steps as what it describes as a “digital accelerator,” consisting of an online platform connecting startups to corporates, thus facilitating links to Asia.

Meanwhile, the new $500 million fund is backed 50 per cent by the Chinese state-owned Assets Supervision and Administration Commission (SASAC) Shenzhen, who is acting as both an LP and Strategic Partner.

Is Fintech a Disruptor or an Enabler for the Big Banks? (Finance Magnates), Rated: A

Ever ubiquitous, in 2016 the term ‘fintech’ appeared in the global print media 90,000 times and multiple times that in social media. In a study conducted by Citigroup in 2015, they found that fintech investments topped $19 billion, which represents a tenfold increase from 2010.

The argument towards fintech being perceived as a disruptor is largely due to the fact that fintech start-ups have the freedom to be a lot more nimble. They are not burdened down with legacy technology systems and restrictive regulations.

For example mobile-based banks have emerged in the past year, such as Monzo, Starling, Tandem and Atom, all of which offer accounts that allow customers to manage their money and lifestyle.

Yet, there are many who are of the contrasting opinion that fintech developments are set to be an enabler for established financial service companies. In possession of enormous capital, they are in a position to invest in these technologies and take a more innovative approach towards attracting new customers, cut costs and boost profits.

The emergence of fintech has motivated banks to consider their pain points, in ways which may be solved through technological innovation.

Additionally, banks can look to fintech as a means to enable their revenue growth with higher margin and through less capital-intensive programs, such as insurance or wealth management. By incorporating fintech applications such as robo-advisers and automation into their operational model, they then have the means to scale their business more rapidly to provide services to clients that beforehand were not profitable or were too taxing on their customer service systems.

Australia/New Zealand

Small Business Lender OnDeck Launches #turnthatNOaround Campaign (Bandt.com.au), Rated: AAA

The campaign, which is already running on radio in Sydney, Melbourne and Brisbane, is scheduled to run across outdoor, social (LinkedIn and Facebook) and digital media to encapsulate an integrated multi-channel outreach.

With the #turnthatNOaround campaign, OnDeck aims to reach small business owners who have experienced a “no” from their banks, giving them an opportunity to secure a loan that is much faster than the banks – taking just one business day.

Australian expert’s robo advice warning (NZ Herald), Rated: A

The founder of an Australia’s robo-advice business says a law change may not be enough to allow such companies to operate in New Zealand.

Under the current law only “natural persons” may give financial advice in New Zealand but a change to the Financial Advisers Act is expected to make robo-advice legal here by 2019.

In New Zealand there are growing concerns about an advice gap after research by the Financial Markets Authority found most people who got professional financial advice had assets of more than $200k, leaving question marks over how people with less money, including those with savings in KiwiSaver, get advice.

Chris Brycki, who founded robo-advice business Stockspot in 2014 and now has several thousand customers, said he was keen to enter the New Zealand market but could not do so because the company could not find a suitable banking partner.

Asia

Singapore fintech firm says launches first digital platform for trade finance assets (Euro News), Rated: AAA

A Singapore central bank-backed fintech firm, CCRManager Pte Ltd, on Tuesday launched what it says is the first digital platform for the distribution of international trade financing, transactions now handled mainly by phone and email. CCRManager Pte Ltd, which received a grant from the Monetary Authority of Singapore’s Financial Sector Development Fund, is supported by 16 financial institutions, including Bank of China, DBS Bank, Standard Chartered Bank, Mitsubishi UFJ Financial Group, Spain’s BBVA and the commercial insurance arm of Swiss Re.

CCRManager charges a transaction fee on every successful deal. The Singapore-based company said its users will be able to list assets for distribution, negotiate deals, and manage supporting documentation in a secure environment. The web-based platform will enable members to manage the entire process of distributing trade finance internationally to other banks, credit insurers, and fund managers.

South America

Brazil’s Central Bank Plans FinTech Regulations for Recession Respite (Cryptocoins News), Rated: AAA

The Central Bank of Brazil is eyeing regulations for the FinTech sector this year to help industry startups and companies to enter and expand in the country currently reeling from a recession.

According to a Reuters report today, the Banco Central do Brasil (BCB) – the country’s monetary authority- is looking at implementing these regulations within this year to fuel the growth of FinTech firms and services in Latin America’s biggest economy.

As of March 2017, Brazil’s economy was 8% smaller than it was in December 2014.

While details are scarce, some of the new regulations will help financial technology companies and startups in areas including:

  • Financing via peer-to-peer lending platforms connecting borrowers directly with individual investors
  • A wider playground, by facilitating foreign banks to enter Brazilian shores without the need for a presidential decree
  • Diversification, by helping financial technology companies team up with banks to offer loans or ‘securitized credit from institutional investors.’

Authors:

George Popescu
Allen Taylor

Friday March 31 2017, Daily News Digest

Kabbage On Deck

News Comments Today’s main news: BlackRock bets on robots to improve stock picking. Orca launches beta platform to stream P2P market investment. Quint raises 10M GBP for recapitalization. Monzo raises 2.5M GBP via Crowdcube. RegTech Association launches in Australia. Lending fraud trial begins in China. Yirendai announces intent on performance bond agreement with PICC P&C. Today’s main analysis: The strategic case […]

Kabbage On Deck

News Comments

United States

United Kingdom

European Union

Australia

China

Asia

News Summary

United States

BlackRock Bets on Robots to Improve Its Stock Picking (WSJ), Rated: AAA

BlackRock Inc. BLK +0.96% has started a shake-up of its stock picking business, relying more on robots rather than humans to make decisions on what to buy and sell.

Seven stock portfolio managers are among several dozen employees who are expected to leave the firm as part of the revamp, a person familiar with the matter said.

The changes are the most significant attempt yet to rejuvenate a unit that has long lagged behind rivals in performance. Clients have pulled money from the actively managed stock business in three of the past four years even as BlackRock’s total assets climbed to a record $5.1 trillion. BlackRock had $275.1 billion in active stock assets under management at the end of December, down from $317.3 billion three years earlier.

The Strategic Case For a Kabbage/On Deck Deal (Market Intelligence), Rated: AAA

On Deck Capital Inc. is unlikely to be tempted by a takeout offer from privately held competitor Kabbage, but a combination of the two digital lenders could make strategic sense.

A combination of these two companies would create the largest digital lender focused on small and medium enterprises in the U.S., with an estimated combined 2016 loan origination amount of $3.82 billion.

While a few years ago this would have seemed like an odd pairing, recent changes to On Deck’s business model have moved it closer to Kabbage. On Deck itself has had a tough time as a publicly traded company, with shares falling about 80% since its IPO. The company has struggled to rework its business strategy and create a clear path for profitability, despite growing annual originations from an estimated $15.9 million in 2008 to $2.40 billion in 2016.

By leveraging their existing technology to develop white-label solutions for banks, both companies have found a new source of higher-margin revenue. A combination of what are arguably the most advanced underwriting systems in the SME lending space would only accelerate licensing deals, which could eventually become a significant portion of revenue.

Appeals Court May Tackle `True Lender’ Debate Affecting Fintechs, Online Lenders (Bloomberg BNA), Rated: AAA

A federal appeals court may offer guidance on “true lender” analysis and how it affects bank partnerships with marketplace lenders and fintech companies ( Cons. Fin. Protection Bureau v. CashCall Inc. , 9th Cir., 17-cv-80006, petition for interlocutory appeal 1/13/17 ).

At issue is a petition by CashCall Inc., an online lender based in Orange, Calif., that’s now before the U.S. Court of Appeals for the Ninth Circuit. CashCall wants the Ninth Circuit to hear a mid-case appeal from an August ruling in a deceptive practices case that said it was the “true lender” in an arrangement with Western Sky Financial, a self-described tribal loan company.

In general, “true lender” analysis scrutinizes relationships between banks and nonbanks to discern which party actually makes the loan to a consumer.

PeerStreet Integrates with Wealthfront via Quovo to Provide Improved Access and Transparency (Yahoo! Finance), Rated: A

PeerStreet, an award-winning platform for investing in real estate backed loans, has announced an integration with Wealthfront, the most trusted automated investment service among young people with nearly $6 billion assets under management. This integration was made possible by the rollout of Wealthfront’s new financial planning experience, Path, which allows Wealthfront clients to receive financial advice and planning for all of their accounts.

As customers’ financial lives become increasingly complex, having all investments across platforms in one place provides consumers with more comprehensive information. PeerStreet users have sought out integrations with platforms like Wealthfront. Both PeerStreet and Wealthfront were able to quickly respond to their clients’ needs using Quovo, the industry leader in financial account connectivity. Using its account aggregation engine, customers investing on both platforms can view their PeerStreet positions within the context of their greater Wealthfront investment portfolio.

How crowdfunding is democratizing real estate investing (Marketplace.org), Rated: A

Rodrigo Niño is founder and CEO of a platform called Prodigy Network, which uses crowdfunding to build commercial real estate, like the tallest skyscraper in his home country of Colombia. Marketplace’s Molly Wood talked with Niño about crowdfunding.

Niño: I have to say that it is different because you would argue that traditional equity funding is easier because you deal only with one institution that gives you a check for the total equity that you require for a building, and you don’t need to deal with thousands of investors like we do. On the other hand, the top-down approach was one of the bigger issues in the crisis of 2007. We learned that the model of giving your money to experts that would know better didn’t work. So we like to believe that we act as curators of that collective wisdom of the crowd, and that they need to understand what they do.

Niño: I think that the model will spread and because this industry was ripe for disruption. You know, I think that the commercial real estate industry in the United States is even larger than the stock market. And now, thanks to technology and the JOBS Act, I believe that the public has access to incredible assets because it’s very understandable and very predictable. If you think about it, people cheat and lie and bricks don’t. So, that was exclusive to a select few, and now it is available to everybody.

This Real Estate Startup Is Exploiting Zillow And Airbnb’s Blind Spot (Forbes), Rated: A

Airbnb currently lists over 2.3 million homes, averaging more than 500,000 nightly stays across 65,000 cities. In 2016, the home-sharing giant snatched headlines after raising over $555 million from Google Capital and Technology Crossover Ventures, in pursuit of a reported $850 million round, raising the company’s valuation to $30 billion. This valuation positioned Airbnb as the second most profitable tech startup after Uber.

Founded in 2011 by Bill Lyons, Revestor is a digital real estate search engine that uses proprietary data and live listings to help sync realtors and potential investors with desired residential properties. While other services allow users to search real estate based on specific property details, Revestor lets users search based on investment criteria. This approach works to ensure the most profitable use of available funds, helping homebuyers track the projected resale value of their property over time. Thus, real estate investors can use various tools to determine whether a property matches their firm investing goals.

Bill Lyons: Per a 2016 National Association of Realtor’s study, 51% of home buyers found their home without using an agent. Additionally, over 90% used the internet to research the home they were buying.

Bill Lyons: The riches are in the niches. Everyone has their niche, and Revestor’s niche is that 25% of the business is investors.

Bill Lyons: Crowd funding for real estate is on the rise with companies like Patch of Land and RealtyMogul. I can see Revestor playing a key role in analyzing investments for private groups of individuals.

Investors Want Financial Advice From Both Robots and Humans, Says Accenture (Fortune), Rated: A

But a new study by consulting firm Accenture finds that clients across all ages and economic brackets want robots and humans together, not one instead of the other.

The findings follow news on Tuesday that BlackRock (BHK, +0.08%), the world’s biggest money manager, was laying off some portfolio managers in favor of spending more on data-mining techniques that could improve investment performance.

However, the market is changing so rapidly that study respondents said online tools they considered to be “bells and whistles two years ago” are now expected, Thompson said.

Robos Advisors Face Potential Collapse, Says FinTech CEO (FA Mag), Rated: A

John Ndege, founder and CEO of Pocket Risk, is predicting a collapse in the world of robo-advisors.

On Tuesday, Ndege announced a complete re-launch of his software, Pocket Risk 2, a digital risk tolerance questionnaire that attempts to holistically measure an individual’s risk tolerance and capacity.

Rather than an engine of efficiency, Ndege presents Pocket Risk as a tool to make financial advice more effective. According to Ndege, trust and awareness are the largest barriers between the advice industry and new client acquisition, not technology. Thus, advisors would be better served focusing on delivering financial plans rather than building the next great client portal or onboarding application.

Garnet Capital Advisors Announces $ 100 Million Consumer Loan Sale (Newswire), Rated: A

Garnet Capital Advisors, LLC is announcing the launch of a sale of $100 million of consumer loans on behalf of the National Credit Union Administration (NCUA).

Clarity Trends Report Presents the Evolution of the Subprime Market (Clarity Services), Rated: B

Clarity Services, the subprime industry’s largest credit reporting agency, today announced the release of its 2017 Subprime Lending Trends report. More than just a demographics report, it offers exclusive insight into emerging consumer trends that can help lenders reach the consumer where they are.

The report is based on a dataset containing exclusive performance data on 16 million loans from the past four years.

United Kingdom

Orca Makes a Splash: Launches Beta Platform to Streamline P2P Market Investment (Crowdfund Insider), Rated: AAA

Orca, an independent data, research and analysis provider in the UK P2P lending market, launched a new platform which aims to help financial advisers and sophisticated investors to better “seize” opportunities within the P2P market. The platform, by offering unique standardized metrics to compare P2P investments, will allow users to perform in-depth due diligence on P2P investments, benchmark them, and make risk-adjusted, informed investment decisions or recommendations.

The Belfast-based platform noted that the P2P market has seen tremendous growth in the past two years, increasing by 40% in 2016 and estimates that by 2020 around 2.7 million people will be investing in P2P.

Through Orca’s relationships with UK P2P lending providers, the platform has translated millions of loans, covering 90% of the UK P2P professional market.

Quint raises £10 million to fund recapitalisation (Finextra), Rated: AAA

NORTH West headquartered Quint Group, a leading international, highly innovative fintech group operating in the consumer finance market, has secured a £10m financing deal from Manchester based Tosca Debt Capital to fund its recapitalisation.

Quint is the company behind the UK’s fastest growing consumer price comparison site MoneyGuru.com*. It also owns and operates a portfolio of mutually beneficial and strategically aligned financial technology businesses in the consumer credit sector, including business-to-business lending marketplace and platform, Monevo, consumer credit reporting and financial management services such as Credit Angel, as well as its data business, Monevo Data Services which develops and provides cutting edge credit, risk, marketing and analytical data to the financial services sector.

Digital Bank Monzo Raises £2.5 Million backed by 6,800+ Investors via Crowdcube (Crowdfund Insider), Rated: AAA

Digital bank Monzo has broken a platform record on Crowdcube. The challenger bank has raised £2.46 million supported by 6,800 plus investors. The offer on Crowdcube is for 2.83% equity at a valuation of £84.75 million. The number of investors that have participated in the Monzo offer is the most ever on Crowdcube.

The challenger bank is raising a total of £22 million in the Series C investment round, including a £19.5 million investment from Thrive Capital, £5 million from Passion Capital and £1.5 million from Orange Digital Ventures, alongside the £2.5 million of equity crowdfunding on Crowdcube.

Saving Stream Rebrands as Lendy (P2P-Banking), Rated: A

What was formerly Saving Stream is now called Lendy. The operator of the marketplace has been Lendy Ltd. already, it was just trading as Saving Stream for investors. Now under the new domain Lendy.co.uk the company has brought together its services for investors and borrowers citing feedback by users.

The announcement email sent, reads:

Following feedback from users, we are integrating the Saving Stream platform under the Lendy brand. This is in order to simplify the brand and make accessing the crowdfunding platform easier for all our clients.

Lawrence Wintermeyer, CEO of Innovate Finance, Says Triggering of Article 50 Puts Fintech at Risk (Crowdfund Insider), Rated: A

Theresa May has signed the letter that will formally separate the UK from its 43 year membership in the European Union. As the UK initiates Article 50, Lawrence Wintermeyer, CEO of Innovate Finance – the advocacy group that supports all things Fintech – is out with a cautionary statement. Wintermeyer fears that Brexit may undermine the UK’s dominance in disruptive finance as it may be unable to attract the necessary skills to remain the global leader in financial innovation.

Editor’s note: The EU was organized on November 1, 1993, making it 23 years old.

25% Of Singles Think They’ll Never Be Able To Retire (Grazia Daily), Rated: A

If you want to feel thoroughly depressed about your future financial prospects, we have a disheartening new stat for you: according to a new survey from peer-to-peer lending platform Lending Works, 24 percent of single adults believe that they will never be financially secure enough to retire in their old age.

After surveying over 1,500 UK adults who are yet to reach retirement age, Lending Works found that financial security is more of a worry for those of us who aren’t in a relationship.

19 percent of those who are married or living with their partner reported the same concern. More drastically, 40 percent of the singles said they are currently unable to save money each month to plan for the future, in comparison to 29 percent of those who are married or co-habiting.

Extra! Extra! Daily Mail teams up with IFA to launch advice firm (Citywire), Rated: A

National advice firm Alexander House has partnered with the parent company of The Daily Mail to launch a new firm called Timber Finance.

According to the website Timber will charge an initial fee of 1% with a minimum amount of £750. It will also charge an ongoing fee of 1% per years for advice.

Insurtech the Rising Star of the FinTech Movement (Huffington Post), Rated: A

A recent report released by the lab examines the insurtech sector specifically, and explores the investment landscape in the sector.  The report analyzed over 450 deals conducted over the last three years, and reveals a particular focus in the sector on technologies such as AI and IoT.  Indeed, deals in these two areas alone increased by 79% in 2016.

The insurance industry is targeting technologies such as AI and the IoT specifically to help it deliver more personalized service to increasingly demanding customers.  The technologies both help provide insurers with more data to assess risk, and then help them do the calculations to underpin that assessment.

What to expect from the NACFB CFE 2017 (Bridging&Commercial), Rated: B

The NACFB has revealed that both Funding Circle and LeaseTeam Solutions Ltd will be supporting the event as the Association celebrates its 25th anniversary.

LendInvest’s property development academy expands to the North (Development Finance Today), Rated: B

Academy courses will now be held for the first time in Manchester on 25-26th May, Edinburgh on 22-23rd June, Birmingham on 7-8th September and Bristol on 9-10th November.

European Union

Prosper President Ron Suber Shares Insight & Perspective with French Fintech Industry (Crowdfund Insider), Rated: AAA

Ron Suber, the President of the US marketplace lender Prosper, was interviewed today by Cédric Teissier, the CEO of the French factoring platform Finexkap, at the annual conference of the  France Fintech association, titled “Fintech Revolution 2017 – Here to Stay”. Cédric Teissier asked Ron Suber as head of a worldwide pioneering and leading online lender to share his advice and his vision for the benefit of French fintech startups.

Asked about consolidation in the US market. Ron Suber pointed out that there are 3,000 online lenders in China and 300 in the US. These lenders serve diverse categories of borrowers from student to larger SMEs, from super-prime to subprime. Consolidation will happen because it is all but easy to master the three legs of online lending: the investors, the borrowers and the platform’s operational efficiency in risk management.

There are 14 different ways to find borrowers such as direct mail, partnerships, promotion etc. But out of ten prospects, only two will come to loan origination. Startups must focus on conversion efficiency to start making money. Prosper is 10 years old and next quarter will be its first profitable quarter. Generating cash is the most powerful way to dissipate doubts.

“My vision of where we are going is that of a portal where any of us can go to invest in any currency and any country, a portal similar to the Amazon or Priceline of finance. We are only in the first or second inning of this revolution. I used to buy CDs. My kids never do. Soon they will say: “I can’t believe that you used to go to the bank to get money.”

Compliance for Fintech Companies: What Your Website Visitors Have a Right to Know (Martindale), Rated: AAA

Between 2010 and 2015, total global investment in FinTech amounted to $49.7 billion. The most popular FinTech areas are those of payment and lending services (consumer and retail), block-chain services, such as bitcoin, and cybersecurity and cloud-based services, such as market monitoring and tracking.

Compliance with the Distance Marketing of Consumer Financial Services Directive is regulated by the Malta Financial Services Authority (MFSA). Failure to comply with the provisions in the Distance Marketing of Consumer Financial Services Directive may result in an administrative fine of up to €93,000 on the supplier, or the manager, secretary, director or other person responsible for the supplier’s activity.

Under the Electronic Commerce (General) Regulations, implemented through S.L. 426.02 in Malta, the financial institution shall only send direct marketing by electronic means if certain conditions are met.

The First Hall of the Civil Court in Malta may fine up to €4,658.75 for any breach of the provisions relating to comparative and misleading advertising.

Financial institution websites must ensure compliance with the Data Protection Act and the EU Directive on the Protection of Personal Data, and the Directive on Privacy and Electronic Communications. In Malta, the Data Protection Commissioner may impose fines of up to €23,300 for breach of any provisions within the Data Protection Act, and €50 for each day the violation persists, and/or to imprisonment of up to six months.

Australia

Catching FinTech Winds, RegTech Association Launches in Australia (Cryptocoins News), Rated: AAA

The RegTech Association has officially launched in Australia and is aiming to aid the regulation technology sector just like fintech is changing financial services.

According to a report from Finder, the Association will promote good corporate practice in compliance management and boost regulatory compliance outcomes.

Fintech investment in Australia increased in 2016 while the rest of the globe saw a decrease in funding. In a report from KPMG, last year saw total fintech investment amount to $US656 million across 25 deals compared to $US185 million across 23 deals in 2015.

The rise of regtech – the ‘little sister’ of fintech (Finder), Rated: A

The RegTech Association, which aims to shine a light on regulation technology, officially launched last night with an industry-first event in Sydney for key industry influencers including stakeholders from major banks, start-ups and industry regulators.

“What we’re really looking to do is facilitate collaboration between a group of Australian financial services stakeholders who we think can use these new technologies, and this growing crop of innovators who are building regtech businesses. And we hope that by bringing them together we can create a bit of an ecosystem in Australia around regtech,” Symons said.

China

1.5b yuan lending fraud trial begins (Shanghai Daily), Rated: AAA

A high-profile financial fraud trial — involving 1.5 billion yuan (US$220 million) of investor savings — started at Xuhui District People’s Court of Shanghai yesterday.

Fifteen former employees of the now-defunct online peer-to-peer lender Jinxing Investment were on trial. Ji Jianhua, the company’s chief financial officer, was accused of illegally raising funds, and 14 senior managers have been accused of illegally absorbing public savings.

Prosecutors said there were still 400 million yuan of repayments that weren’t made in the wake of the case being exposed.

More than 200 investors gathered in court in Xuhui for the hearing yesterday, many of them elderly investors. Trials of the 14 senior managers would be held at a later date, the court said.

Yirendai Announces Agreement of Intent on Performance Bond With PICC P&C (Crowdfund Insider), Rated: AAA

Chinese marketplace lending platform Yirendai (NYSE: YRD) announced on Thursday it has entered into an agreement of intent with the Beijing branch of PICC Property and Casualty Company Limited (PICC P&C).

Yirendai reported that under this new agreement, PICC P&C would provide Yirendai with a performance bond for certain loans facilitated through the online marketplace. PICC P&C will also reimburse lenders within the agreed scope should any losses incur due to the Company’s failure to perform adequate due diligence during the credit underwriting process.

Financial Inclusion, Regulatory Protection, and My Recent Trip to China (Orchard Platform), Rated: A

by Matt Burton, Co-Founder & CEO, Orchard Platform

Let me just begin by saying that I’m no expert on China or Southeast Asia, but I am committed to learning and keeping up. The market is incredibly complex and is advancing very fast. Based on my last two trips, I’m floored by how quickly the market is developing.

It’s also pretty clear that the development in the region, particularly in the financial services and technology sectors, is happening at a staggering pace and scale. As of September 2016, China had 8 of the 27 current fintech “unicorns” at an estimated US$96.4 billion total valuation with US$9.4 billion in capital raised—including the four largest valuations globally: Ant Financial (US$60 billion), Lufax (US$18.5 billion), JD Finance (US$7 billion), and Qufenqi (US$5.9 billion). To help put those numbers in perspective, the U.S. is home to 14 fintech “unicorns” at an estimated US$31 billion combined valuation with US$5.7 billion in capital raised.

The region is also seemingly light-years ahead in terms of innovation and adoption of these new technologies by a large base of underbanked and unbanked consumers—something I learned first-hand by being on the receiving end of scowls from the various vendors I interacted with when I tried to pay with cash. Mobile payment is everywhere, and is the preferred method of transacting at the point of sale.

China’s approach to fintech has been to focus on financial inclusion over financial protection, and this has led to rapid innovation and incredible growth.

Another takeaway? A significant area where the U.S. is ahead of China in this space is on the capital markets side. Most lending platforms in China are still funding loans using the peer-to-peer model. However, in my discussions with lenders, that does seem like something that is shifting. Some of the bigger platforms indicated that they are now seeing 20% to 30% of their originations purchased by institutional investors.

Asia

Now seek financial advice from Marvelstone Capital’s ‘robo advisor’ (Techseen), Rated: A

Marvelstone Capital, a Singapore-based data-driven asset management company, has announced the launch of a licensed ‘robo advisor’ platform for family offices in Asia in Q3 this year. The platform is being developed in partnership with Smartfolios, a Singapore-based fintech startup and will be available on desktop and mobile for Marvelstone’s clients.

Authors:

George Popescu
Allen Taylor

Thursday February 2 2017, Daily News Digest

Thursday February 2 2017, Daily News Digest

News Comments Today’s main news: SoFi acquires mobile banking startup Zenbanx.  LC class action suit to be arbitrated. Goldman CIO touts Marcus as FinTech startup. Prosper appoints Usama Ashraf as CFO. Today’s main analysis: P2P lending was a product of the financial crisis. Own SoFi through Renren. Today’s thought-provoking articles: Smaller P2P players likely to struggle.  How to […]

Thursday February 2 2017, Daily News Digest

News Comments

United States

United Kingdom

European Union

Israel

News Summary

United States

SoFi moves beyond lending with acquisition of mobile banking startup Zenbanx (Finextra), Rated: AAA

Online lender SoFi is stepping up its efforts to take on America’s banks by buying fellow fintech player Zenbanx, enabling it to offer checking accounts, credit cards and international money transfers. Financial terms were not disclosed.

Although terms have not been revealed, the deal is expected to be worth around $100 million when it closes later this month.

Founded in 2012 by former ING Direct CEO Arkadi Kuhlmann, Zenbanx offers a mobile banking account that lets people save, send and spend money in multiple currencies both domestically and internationally. The firm is not a bank, teaming up with FDIC member Wilmington Savings Fund Society, which issues accounts.

OUR ACQUISITION OF ZENBANX (SoFi), Rated: AAA

We have never been shy about SoFi’s ambitions to become the center of our member’s financial lives. Offering deposits, credit cards, and payment solutions is key to that ambition, and we think we can offer something better than incumbent players with the same kind of innovation we’ve brought to other areas of finance, like student loan refinancing, personal loans, and mortgages.

Today, we got a lot closer to being able to provide those products with the acquisition of Zenbanx, a Delaware-based company that offers a mobile banking account that lets people save, send and spend in multiple currencies.

With the addition of Zenbanx, SoFi is poised to make banking much more frictionless. We can’t wait to show you what’s in store.

Class Action Against Lending Club and WebBank Headed to Defeat (JDSupra), Rated: AAA

On Monday, a federal district court in the Southern District of New York granted a motion to compel arbitration in Bethune v. Lending Club Corporation, et al., a closely watched putative class action raising important issues for the fintech industry.

Under the Federal Arbitration Act, the court’s decision is potentially subject to immediate appeal to the Second Circuit under § 1292(b). The decision, especially if it is affirmed, may provide increased certainty and comfort for the marketplace lending industry and investors.

Own SoFi, Other Fintechs Through Renren (Lend Academy), Rated: AAA

There is one company called Renren that has allocated to numerous fintech firms and is currently publicly traded on the NYSE under symbol RENN.

Renren has participated in SoFi’s series B, D, E and F rounds for a total investment of over $242 million. According to the 2015 year end report, “The Company held 28.85% and 21.20% equity interest of SoFi as of December 31, 2014 and 2015, respectively.”

Renren also hold significant positions in Motif (10%, their CEO was the most recent guest on the Lend Academy Podcast, Lending Home (14.7%, which just crossed $1 bn in originations) and Fundrise (25.3%, which is in the process of raising money from the crowd, has originated over $210 mn in originations and touts 123k members).

Goldman CIO touts new consumer lending business as ‘fintech startup’ (SearchCIO), Rated: AAA

Goldman Sachs Group Inc., financial adviser to corporations, governments and the world’s one-percenters, is stepping out of its comfort zone. The global investment bank recently unveiled Marcus.com, an online lending platform for consumers. The platform not only represents a new customer focus — ordinary people who get into debt — but a new technology strategy at Goldman.

Fintech startups rely on technology to provide faster, more agile customer service than the traditional Wall Street behemoths. Marcus, which is built on APIs, was born out of the same thinking.

Indeed, Chavez said Goldman is not only exploiting APIs, but open source and cloud services as well — a trio he referred to as the most “profound drivers” of innovation in financial services he’s ever experienced.

Goldman is not alone. The use of APIs has skyrocketed in the last couple of years. In 2015, there was a 12-fold increase in API calls. A majority of the revenue at Salesforce, Expedia and eBay — between 50% and 90% — comes from APIs; for some companies such as Twilio, a cloud communications platform, 100% of its revenue comes from APIs, Chavez said.

The Marcus online lending offering is an example of a plug-and-play API strategy; Chavez and his team built and launched the platform in 12 months.

How to earn Bitcoin through p2p lending (CryptoCompare), Rated: AAA

That is why we want to introduce you to BTCjam, a peer-to-peer lending website that connects lenders and borrowers directly. BTCjam was founded in 2012 and has already facilitated over $10 million dollars worth of Bitcoin in loans.

  1. Step 1: On the top right corner, click the “Invest” button
  2. Step 2: You will be taken to the loan listings. We want you to check out the filter below. These are: Term (time period of the loan), BTCjam score (the rating given to the borrower according to his profile information and to the loan requested. Basically a credit score), type (this dictate the currency value in which the investment will be returned) and advanced
  3. Step 3: Now once you find a listing that you like, click on its name
  4. Step 4: This next step is probably the most important one. We want you to take a good look at all of these fields below. Number 1 shows how many BTC is missing for the loan to be fully funded. Number 2 shows the Listing rating and the verified profiles of the user. The more profiles linked, the most likely it is the person to be the owner of these profiles. Number 3 is the description of the business plan or motive for the loan. Make sure the plan proposed is sound and that the borrower has a backup plan to repay the funds Lastly, number is the borrower reputation, which he can acquire from previous loan
  5. Step 5: Once you have analysed all of these fields and are ready to invest in this loan, click “Invest
  6. Step 6: Enter the amount of BTC you want to invest and click “Invest” once more

Prosper Marketplace Appoints Usama Ashraf Chief Financial Officer (Yahoo! Finance), Rated: A

Prosper Marketplace announced today it has appointed Usama Ashraf as Chief Financial Officer. As CFO, Ashraf will oversee the company’s capital markets function, as well as all of the company’s finance activities. As head of the Capital Markets team, he will be responsible for expanding the company’s funding sources by bringing new investors onto the Prosper lending platform.

What to Expect From Real Estate Crowdfunding in 2017 (Equities.com), Rated: A

While growth slowed somewhat in 2016 (likely in response to top-of-market trepidation) the 40% figure is still robust, and the US accounted for a large share of the $1bn of overall industry growth this year. In 2015, the $1.5bn in volume for US real estate crowdfunding represented only 0.3% of total real estate finance transactions in the US, indicating that the sub-industry still has enormous room to grow, even while remaining modest as a share of overall commercial real estate activity in the economy.

The trend of division and specialization among real estate crowdfunding platforms is likely to continue, with the potential for consolidation in the advent of a dip in the market.

The transition of the executive branch will likely have a major impact on commercial real estate capital markets, and therefore on the prospects for the young real estate crowdfunding industry. The trouble is, no one can credibly claim to know what that impact will be.

The Colleges That Offer The Most Bang For Your Student Loan Buck (Lifehacker), Rated: A

Online student loan marketplace LendEDU did an analysis of 752 public and private 4-year colleges. The site looked at two main factors: average student loan debt per graduate and the average early career pay for graduates. They used these two criteria as the risk and reward for attending college to determine which schools give you the biggest upside for the amount of money you have to spend.

Unsurprisingly, schools like Princeton, Yale, and Harvard trend towards the top of the list, but those are also among the hardest to get into.

The Battle to Control Trillion in Investment Direction (Dara Albright Media), Rated: A

In the Fall of 2016, I penned an article entitled, “Modernizing the Self-direct IRA – The Trillion Dollar FinTech Opportunity” – the first in a new series of articles that focuses on next-generation retirement planning. The piece underscored how FinTech will mend America’s flawed retirement system and foster the growth of “digital” investing.

Perhaps the majority of America’s retail investors are too busy reluctantly allocating their retirement dollars to sanctioned bond funds – many of which yield more clout than performance – to even notice the race to create a next-generation retail retirement product that will economically custody coveted micro-sized alternative investment products and, in doing so, ensure that a greater number of Americans maintain more properly diversified retirement portfolios.

Unlike previous corporate clashes, the winning IRA model is easy to predict. The frontrunner will be the one possessing the most optimum technological and regulatory framework to accommodate the needs of the modern retail investor. Today’s retail investor is not looking for another mutual fund. He is not begging for ETFs. Nor is he interested in day-trading stocks. Instead, he is craving yield, and he is demanding access to the same level of returns that institutions have been enjoying for years through alternative asset diversification.

Yes, you read that correctly. Retail brokerages would prefer to limit access to investment products or exit the retail retirement business altogether than to deal with the regulatory headaches of helping small investors prepare for retirement.

3 Years Later, the Jobs Act Continues to Drive Growth in CRE (Commercial Property Executive), Rated: A

The combined effects of the Jobs Act, digital advertising, and online investing platforms are currently driving rapid growth in CRE investments.

Investors enjoy greater autonomy on digital platforms because they’re able to build their own high-performing portfolios. Rather than putting money into pooled investments, they can pick and choose specific opportunities that appeal to them. Some sites even list institutional quality offerings to private investors and allow them to participate alongside institutional capital.

Global crowdfunding investments in real estate are expected to hit $250 billion by 2020.

Here are three key reasons the industry will show continued growth:

  1. Evolved functionality and flexibility.
  2. Enhanced community building.
  3. Maturing Millennials. In fact, 23 percent of the world’s millionaires are Millennials.

DealIndex study indicated that young investors are 10 times more likely than Baby Boomers to use online investing platforms, even though investing is growing among the 50-years-and-older crowd. Naturally, as Millennials’ influence increases, online investing platforms will mature as well.

Video: Accessing Peer-To-Peer Loans For Alternative Income (RIA Channel), Rated: A

Allen Webb, Senior Portfolio Specialist at RiverNorth Capital Management talks with Julie Cooling, Founder and CEO at RIA Channel about their new marketplace lending strategy, specifically, RMPLX.

Watch the interview here.

How You Can Leverage A Business Competition Win (Forbes), Rated: A

Women may think it’s not ladylike to brag. The truth is, if you want to get ahead in the world, even if you’re a nice girl, you’ve got to brag a little. When done right, it can be an effective way to get attention for your product or service and grow your business.

So how do female founders brag without sounding boastful? By winning a competition, such as OnDeck’s Seal of Approval Contest.

Applying for money from an online lender is less intimidating, commented Corcoran. It’s fast — unlike the 33 hours it may take with a bank — and easy, she said. It’s leveling the playing field for women entrepreneurs who are seeking capital.

Employing crowdfunding to start or expand your business (SlideShare), Rated: A

United Kingdom

P2P Lending Platform Flender Selects Equifax to Support Underwriting for UK SME Loans (Crowdfund Insider), Rated: AAA

Following the closing of its Seedrs equity crowdfunding campaign, peer-to-peer lender Flender has selected Equifax Limited to support the underwriting for UK small and medium enterprises (SME) loans.

According to Finextra, Equifax will be supplying real-time consumer and commercial to help make the underwriting process automated and optimized. This data, which will be provided by Equifax Business Insight’s solution, will give a comprehensive view of SME loan applicants.

Smaller P2P players likely to struggle, says alternative lender (Bridging&Commercial), Rated: AAA

With the many political, regulatory and economic twists and turns of 2016, 2017 is set up to be a strange year in the world of alternative finance.

With the larger platforms announcing record second-half results in the six-month period after the Brexit vote, they are also attracting increasing amounts of capital in the form of equity.

Smaller P2P players, however, will likely struggle to lure the necessary lending or growth capital to survive independently, so we expect a degree of consolidation and some to drop out of the market altogether.

We predict that this will attract a huge amount of capital on to the main platforms and represent as much as 30% of all capital inflows to P2P platforms this year, assuming all large P2P lenders such as Assetz Capital get approved before the end of March 2017, and perhaps as much as 50% in 2018.

RateSetter’s former chief risk officer joins The Money Platform (P2P Finance News), Rated: AAA

THE MONEY Platform has hired RateSetter’s first-ever chief risk officer Kevin Allen (pictured) to head up its credit decision processes and grow its borrower base.

Allen joined the recently-launched peer-to-peer payday lender on Monday 23 January, after three-and-a-half years at RateSetter.

Allen joined RateSetter – which is one of the ‘big three’ P2P lenders – as CRO in July 2013 and went on to become head of retail lending. He helped to increase lending from £3m to £60m per month and was instrumental in growing the provision fund from under £1m to £23m, according to his LinkedIn profile.

The firm is looking to shake up what it calls the “morally bankrupt” payday loan market, by offering a more ethical alternative. With a representative APR of 165 per cent, it is much less expensive than some of the big-name payday lenders in the market.

The Association of Alternative Business Finance Launched Today (Fintech Finance), Rated: A

The Association of Alternative Business Finance (AABF) launched today (1 February) with the major ambition of championing and promoting the best standards of industry practice.

The seven founding members, Capify UK, Catalyst Finance, Credit4, Fleximize, Liberis, The Just Loans Group and YesGrowth have clearly defined four operating principles that members will be required to adhere to:

  • Transparency
  • Responsibility
  • Fairness
  • Security

A key early initiative for the AABF is for members to create and subscribe to a centralised database for Personal Guarantees that will prevent borrowers over committing themselves and help identify potential fraudulent activity.

Behind the scenes: How the Funding Circle process works (Funding Circle), Rated: A

To recap, once you’ve submitted an application online:

  • Your Account Manager will need 3 months business bank statements, the last set of full, filed accounts at Companies House and if these are over 16 months old we’ll need P&L and balance sheet information for the last financial year end.
  • Then, an Underwriting Assistant will carry out some initial credit checks and searches on the financial documents you’ve submitted.
  • Our Credit Assessment team will then look at whether the loan is affordable, if it makes sense and whether it fits our credit criteria.
  • Once the loan is approved, you’ll receive an email with the offer conditions and loan contract. Once the contract has been signed by a company director, scan it back to us along with:
    • A direct debit mandate
    • I.D. and proof of address documents for all guarantors
    • If it’s a Limited company, a personal guarantee
  • The team will then carry out a few final fraud checks, and once complete the loan will be listed at random either as a whole loan, where an institutional investor buys the entire loan, or as a partial loan where thousands of investors lend to your client. The funding process typically takes one to five working days.
  • Once the process is complete, your client will receive the funds within 24 hours.

ThinCats founder: Peer-to-peer lending was a product of the financial crisis (BusinessZone), Rated: B

It was a remarkable change in the way things were done. The key thing now is; can we get a sufficient foothold, so that if the economy improves and the banks come back into the market in a big way we’ll be able to withstand that? I think it will be five years before the banks even consider that. Things may have changed forever.

We made £2m loans in our first year, most of which came from founders and shareholders. I think we did about £5m in the second year, then it doubled each year after that.

We basically hung on their shirt tails – let them do the marketing.

European Union

French Finance Regulators Embrace Fintech (Crowdfund Insider), Rated: AAA

The old Paris Stock Exchange, the Palais Brongniart was buzzing again as international Fintech startups, bankers, insurers, and investors gathered there for two days of panel discussions, Fintech startup pitches and networking at the second edition of the Paris Fintech Forum last week.

While “stable” and “agile” may sound like a contradiction in terms, Francois Villeroy de Calhau insisted that they are not. Regulation is a positive asset for Fintechs as it strives to limit potential risks for customer protection and financial stability.

The French authorities see the Brexit as an opportunity for France to regain a stature as a financial center.

The danger for the Continent is now that the post-Brexit UK, freed from the yoke of EU directives, could decide to compete with the Continent through large scale financial and fiscal deregulation. The UK, which already enjoys an 80% share of the European alternative finance sector, could then maintain or even widen the gap.

Strengthening the communication with fintech firms, implementing their own digital transformation and developing Regtech are key elements of the regulators’ strategy.

Israel

Not Just Hi-Tech: Israel Competes in Global Asset Management (PR Newswire), Rated: AAA

Clarity has launched its own multi-manager fund which allows its clients to invest in a globally-diversified portfolio of high-yielding private debt strategies, such as real-estate-backed debt, senior corporate lending and peer-to-peer lending. Clarity clients benefit from the firm’s access to top-tier debt investment managers globally and from its due diligence and investment selection capabilities. Since the fund’s launch in late September, it has accumulated tens of millions of dollars in assets under management. The fund targets Eligible/Accredited Investors.

Authors:

George Popescu
Allen Taylor

Tuesday January 31 2017, Daily News Digest

p2p consumer credit applications

News Comments Today’s main news: Nyca Partners raises $125M for second FinTech VC fund Today’s main analysis: P2P lenders lead increase in personal loans. Corporate bond ratings. Today’s thought-provoking articles: Will the UK retain the FinTech crown? United States Nyca Partners raises $125M for second FinTech VC fund. GP:” We are curious to see in which […]

p2p consumer credit applications

News Comments

United States

United Kingdom

Australia

Middle East

United States

Most Consumers Open to Robo-Only Retirement Advice (Financial Advisor IQ), Rated: AAA

Most people are willing to trust robo-advisors for retirement planning and investment advice, but the majority also want human interaction when it comes to more complex tasks, according to a new survey from consulting firm Accenture.

Sixty-eight percent of people are open to robo-only advice for retirement planning and 78% say they’d welcome it for investing advice, according to a survey of close to 33,000 consumers, of which close to 10,000 were working with a professional wealth or asset manager, in 18 countries and regions conducted in May and June by Accenture.

Nonetheless, Accenture also found that 38% of consumers would switch to Google, Amazon or Facebook for financial advice services, while only 31% would go to one of the tech giants for banking and 29% for insurance.

Morningstar Corporate Credit Research Highlights (Morningstar), Rated: AAA

The levels in the corporate bond markets are the tightest that credit spreads have registered since the fall of 2014 and are significantly tighter than their long-term averages. The average spread of the Morningstar Corporate Bond Index is 42 basis points tighter than its long-term average of +168 since the end of 1998. The average spread of the Bank of America Merrill Lynch High Yield Master Index is currently 187 basis points tighter than its long-term average of +580 basis points since the end of 1996.

Currency Capital grabs funding from Lovell Minnick Partners (PE Hub), Rated: A

Lovell Minnick Partners, a private equity firm specializing in financial and related business services companies, today announced that it has made a growth capital investment in Currency Capital, LLC, an online equipment financing exchange serving owners of small- and medium-sized companies. The investment will support Currency Capital’s growth strategies. Financial terms of the private transaction were not disclosed.

With Currency Capital, borrowers are provided with unparalleled, instant access to financing options from hundreds of lenders with “one click,” making the entire application, selection, approval and funding process simple and transparent.

Currency Capital provided approximately $150 million in loans to customers in 2016. Equipment buyers are also able to purchase equipment for sale by the Company’s industry-leading partners: eBay, Big Tex Trailers, IronPlanet and Proxibid.

Nyca Partners Raises $ 125M For Second FinTech VC Fund (PYMNTS.com), Rated: B

Nyca Partners, the venture capital firm focused on the FinTech market, raised $125 million for a second fund. According to a report, Hans Morris, the former Visa president turned venture capitalist, created Nyca Partners in 2014, launching a $30 million fund. The fund invested in a slew of FinTech startups, including Lending Club, SigFig and Orchard. The new fund, which includes 10 institutional investors and 29 limited partner advisors, has made investments in about a dozen startups, including Embroker and Ladder, two insurance FinTechs.

United Kingdom

Will the UK Retain the Fintech Crown? (Crowdfund Insider), Rated: AAA

The change in government, and the ramifications of the Brexit decision, has clearly stressed the UK’s prominence in innovative finance. Continental Europe is attempting to take advantage of the decision to depart Europe and Asian business centers, like Singapore and Hong Kong, are seeking to claim the Fintech crown.

Roche-Saunders is a partner at the firm of Bates, Wells & Braithwaite in London, where she manages their financial services regulatory consultancy.

Crowdfund Insider: 2016 was a choppy year for some Fintech/Crowdfunding platforms.

Gillian Roche-Saunders: 2016 was a year of highs and lows, and I think it’s fair to say the lows have received more press.

One of my key takeaways from the year is how crowdfunding now feels established as an alternative source of capital.

Crowdfund Insider: What about Peer to Peer lending platforms? You predicted last year there would be more robust rules for online lenders like the handling of client money, vetting, and wind downs. Is that still going to occur?

Gillian Roche-Saunders: What I didn’t predict was that there could be such a disconnect over the definition of peer-to-peer lending activity.  The Treasury drafted article 36H specifically to capture the peer-to-peer lending industry’s activities, yet we’ve spent much of the year debating with the FCA whether the industry is actually undertaking that same activity.  It could sound like quite a dull and technical debate until you realise that only article 36H loan agreements can go into the Innovative Finance ISA.  The knock-on effects of the FCA and Treasury not being joined up on this point are significant for consumers and platforms.   

Crowdfund Insider: How is the current political environment for Fintech? Does the government embrace the strategic importance of Fintech for the UK innovation economy?

Gillian Roche-Saunders: If you’d asked me a year ago I would have said that political support was beyond dispute.  We had the best ecosystem for Fintech with a regulator and government behind it 100%.  I still think we’re heading in the right direction, and let’s not forget it’s been quite a year for the UK, but it does seem as if the government has taken their foot off the Fintech pedal.

Crowdfund Insider: Are you seeing additional Brexit driven concern for Fintech firms? Anyone moving to Paris or Berlin?

Gillian Roche-Saunders: There continues to be a lot of chatter about the Brexit risk, and comments that we will see our talent and companies move abroad.  Anecdotally, we have seen the opposite.  

As for UK companies, the impact of Brexit will vary depending on the client base.  Institutionally focused players, like enterprise tech and Regtech firms, may find their client base moving overseas and need to follow. The challenges in operating in a truly cross-border way have meant that crowdfunding hasn’t been reliant on Europe and that is likely to insulate the industry now.

Crowdfund Insider: What are your predictions for 2017 regarding alternative finance? Another year of growth & innovation or consolidation?

Gillian Roche-Saunders: It’s stating the obvious but 2017 will be the year of the Innovative Finance ISA.  Many firms have been laying the groundwork on that for quite some time but we’ve seen a real spike in activity since autumn.

We can certainly expect more innovation generally.  As platforms continue to compete for profile and customers, new opportunities to differentiate will be taken up.  It will be interesting to see if there is more cross fertilisation between the lending and investment models. We’ve advised clients to focus on one route or another initially – the FCA may treat both sectors under the broad church of crowdfunding but the models are very different – but this year may be the first time when bringing together both under one roof makes sense.

I would expect moves towards consolidation too.

Crowd2Fund to offer P2P white label product (P2P Finance News), Rated: A

CROWD2FUND is rolling out a white label solution for institutions wishing to expand into peer-to-peer lending.

The platform, which is one of only four P2P lenders to offer the Innovative Finance ISA, is already in talks with potential partners.

Institutions – such as investment firms – will be able to use Crowd2Fund’s “Powered by” feature to operate as a P2P platform under their own brand. Crowd2Fund says it has already seen “significant demand” from institutions looking to leverage their customer base, although it declined to name which ones.

Financial technology firm Orca in £280,000 seed funding boost (The Irish News), Rated: A

BELAST-based fintech company Orca Money has raised £280,000 seed capital which it will use to build on it peer-to-peer lending focused financial media site Orca Retail, launched a year ago.

The alternative finance market has continued to flourish in the UK, with the peer-to-peer lending market growing to £3.13 billion last year and featuring more than 177,000 investors.

A third product, Orca Investments, will be launched early 2018 allowing retail investors and IFAs to invest in a diversified fund, comprised of peer-to-peer investments.

Australia

Peer-to-peer lenders lead increase in personal loans (The Sydney Morning Herald), Rated: AAA

The latest Quarterly Consumer Credit Demand Index from credit agency Veda shows the number of personal loan applications for the December 2016 quarter was 12.4 per cent higher than the December 2015 quarter.

There was a significant pick-up in the growth of personal loan applications in all states and territories, led by NSW and the Northern Territory with an increase of 14.5 per cent, Queensland with 13.1 per cent and Victoria with 12.5 per cent.

Overall consumer credit applications are up 7.7 per cent, with credit card applications rising 3 per cent and mortgage applications up 6.6 per cent.

However, the Veda figures reveal wide geographic variations with mortgage applications.

They were 14.9 per cent higher in the Australian Capital Territory, 11.2 per cent higher in Tasmania, 10.6 per cent higher in Victoria and 9.6 per cent higher in NSW.

However, in Western Australia, applications were 10.6 per cent lower and 10.8 per cent lower in the Northern Territory.

Middle East

Treasury plans law on peer-to-peer lending (Haaretz), Rated: A

Israel’s Finance Ministry released a draft version of a proposed law Monday that would encourage online peer-to-peer lending by creating a regulatory framework for it. The new law will also create protections for the people lending money through P2P websites, as well as for the borrowers – a move the treasury hopes will give the nascent industry more legitimacy and enable it to become a more serious competitor to the banks and credit card companies.

The Capital Markets Authority will be responsible for enforcing the proposed regulations.
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Authors:

George Popescu
Allen Taylor