Its a good thing that everything that happens in Vegas doesn’t stay in Vegas, which is where the Seventh Annual Money20/20 Conference took place on October 19-21, 2018. With the goal to “fearlessly take on the mission of creating a simpler, fairer, faster and more inclusive financial system for individuals, businesses, and society as a whole,” the three-and-a-half […]
Its a good thing that everything that happens in Vegas doesn’t stay in Vegas, which is where the Seventh Annual Money20/20 Conference took place on October 19-21, 2018. With the goal to “fearlessly take on the mission of creating a simpler, fairer, faster and more inclusive financial system for individuals, businesses, and society as a whole,” the three-and-a-half day event included more than 500 speakers and 15 agenda themes.
Themes included :
Payments and Platforms
Banking and Personal Finance
AI and Deep Learning
Cybersecurity and Fraud
Alt Lending and Credit
Blockchain and Crypto
Digital Identity and Biometrics
And much more
While this is going to serve as a brief overview of the Conference, some of the notables who spoke, and bigger announcements, there will be special interest on Alternative lending and credit. We’ll also look at the all-important payments race.
A lot of the coverage is available on YouTube where Money20/20 has its own channel, so, if you missed the conference, you still have free access to some of the information.
Apple Co-founder Steve Wozniak is always a good bet to help you get a financial conference rolling. The business legend’s assurances that the claims that artificial intelligence (AI) and robotics, along with other forms of technology, are going to cut into human productivity are unwarranted helped to establish an ongoing theme that tech is necessary for the broader inclusiveness of our collective financial future.
Jennifer Bailey, VP Internet Services for Apple Pay, detailed some of the expansions of the new iPhone X, which include face ID security.
Other notable speakers from the first day of the conference included John Collison of Stripe, Michael Mebach, CPO of Mastercard (who spoke on how to build a seven-trillion-dollar middle class), Anand Sanwal of CB Insights, and Bill Ready of PayPal.
Day Two’s lineup of speakers was headed by none other than Virgin’s own Richard Branson, who told a remarkable story about how he created Virgin by renting a plane and selling seats to the other passengers scheduled to be on the American Airlines flight that was delayed. Sallie Krawcheck, Ellevest’s CEO and co-founder, had some valuable remarks on diversity, and Vanessa Colella, head of Citi Ventures and CIO of CitiGroup, shared some keen insights on partnerships.
Possibly the speaker from the conferences second day who made the biggest impression was Nikolay Storonsky, CEO of Revolut. The way money is moved is changing rapidly, but if Storonsky is correct in his predictions, it may change even faster. He predicts that in 10 years, two or three large fintech players will take 95 percent of banks’ business marking an industry overhaul akin to how Amazon bypassed the retail industry and Uber took on taxis.
Patrick Gauthier, VP of Amazon Pay, spoke to Tracey Davies’s central theme when he talked about the use of technology to make things simpler and more natural between the merchant and the consumer. Harley Finkelstein, CEO of Shopify, pointed out that middlemen will not be totally going away in the financial realm of the future, but they will have to “provide a disproportionate amount of value for their profit margin in the future.”
Other notable speakers included Asiff Hijri, president and COO of Coinbase, who framed the crypto world well when he spoke of the two base use cases of the space, the store of value of bitcoin and the ability to build apps on top of Ethereum, while noting that we’re still looking for that breakthrough app. His quote “Fintech before crypto, and the promise of a stablecoin…is like mobile before the iPhone came along” might be one of those “remember when” moments.
NBA legend Shaquille O’Neal also spoke on the third day of the conference. Now an advisor and advocate of Steady, the platform which helps Americans find work, says his partnership with these efforts is driven by recollections of a past where the only investments that paid off were those he embarked on in order to help others.
Much of what happened on Day Four is listed below, including the Uber/Barclays and the Grab/Mastercard partnerships, but the day also had some other mentionable happenings.
Marisol Menendez, head of open innovation for BBVA, introduced the overall winner of the 10th annual BBVA Open Talent competition, the reward going to Sedicii; founder Rob Leslie accepted the award. Sedicii provides a service that identifies data between two organizations without exposing the underlying data.
Also, adding some hope for the financial sector in general, Ripple’s Co-Founder and Executive Chairman Chris Larson stated that he thinks digital assets can help guard against another financial crisis by solving some of the key problems of global liquidity. He also predicts that a fluid digital asset (he thinks it will be XRP, of course) will make more fluid the trillions of dollars that are tied up due to the “clunkiness” of current systems.
Focus on Alternative Lending and Credit Cards
As instant payments and expanded remittance options gain more prominence in the world of payments and commerce, an app designed to speed up the remittance process, designed via Visa APIs, took top honors at the conference.
American Express and Amazon announced a partnership, which will produce a no-annual-fee business card. Cardholders (Amazon Prime members) will get to choose if they want to receive five percent rewards on any Amazon purchase (Whole Foods included) or 90-day payment terms, a reward that might benefit small businesses with cash flow issues.
Goldman Sachs’s Marcus Platform announced a new wealth management offering designed to make the financial market more inclusive for average Americans. The offering will focus on online savings accounts and personal lending, the end game being to educate customers on some of the ins and outs of the financial sector.
Grab Financial and M and A Mastercard announced a partnership that will make prepaid cards available to underbanked and underserved customers in Southeast Asia in order to bring them into the financial realm and allow them to conduct business globally.
Gregory Wright, CPO and SVP of Experian, touched on a common theme from the conference, that of businesses going forward by putting consumers first. He reinforced the platform’s focus on putting the consumer at the center of the lending decision by giving the consumer more control over his or her data to allow them to make a more informed lending decision. The goal is for lenders to make better decisions at lower risk while giving more consumers access to credit.
David Richter, global head of business and corporate development for Uber, joined with Curt Hess, CEO of BarclayCard US, to announce the unveiling of the Uber Visa card. A native app specifically designed for the Uber platform, the app will make it more engaging and enjoyable for Uber riders and Uber eaters to experience the platform. The card will also offer real-time notifications of rewards and balances, rather than customers having to wait a month for a statement as credit cards traditionally do.
Other Noteworthy Announcements
ViSync took the grand prize in the conference’s hackathon challenge. According to a Visa spokesperson, their entry, an app designed to help send remittance payments overseas, should make it easier for migrant workers to send money back to their home countries.
FICO announced an “Ultra” FICO rating. The new device will consider how people manage their checking accounts and will incorporate things like overdraft history to determine credit scores. The goal is to help younger people and others with little or no credit and people who are rebuilding their credit after a couple of setbacks.
Tracey Davies, president of Money20/20, also announced the Rise Up! program, the pilot of which took place at this event. Rise Up! seeks to increase inclusion into the financial sector on all levels. This pilot program, which will expand to other demographics in the future, focused on gender (women make up 50 percent of the population, but only 20 percent of leadership roles in the financial sector.). Of the 300 women who applied to the program, only 35 were selected. Those who were selected were privy to special seminars and one-on-one access to various leaders from the financial space.
The Payments Race
Knowing how we build points of sale, I wonder if the organizers of the original event knew just how apropos the payments race would be to the overall message of the Money20/20 events. Whether they did or not, the event serves to draw a good picture of how we use and interact with different forms of currency in our daily lives.
Closely resembling the scavenger hunt of the television series The Amazing Race, five participants were given six days to make it to Las Vegas for the opening day of the convention. They drew to see which host city will host most of their scavenging, and then they all have to make it to their city and then to Vegas. Along the way, they got points for things like the number of states they visited and the different modes of transportation they use.
The catch is this: Each participant was only allowed to use one form of payment; the options were
Team Credit Cards
Team Devices (Apple Pay and such)
The episodes—all of which can be seen on YouTube—show the obstacles in trying to perform these tasks with only the given form of payment.
As you can imagine, Team Checks had a hard time of it, and they had to rely on the goodness of many others to navigate their journey. Team Cash didn’t face as many obstacles, but travel required some finagling as they got deeper into the trip. Team Crypto had some transportation issues early on, but also relied on the kindness of others to make the necessary accommodations.
Team Credit seemed to have the most ease traveling—they just rented an RV and drove—and the representative from Team Devices said after it was all over that using only devices proved to be easier than she thought it was going to be; she did have to go to some pretty significant lengths to rent a car.
In all, the little series of videos showed the importance of various forms of payment and that we still haven’t gotten to the point where we can survive conveniently on one single form of payment; still, everything from the conference seems to speak to the reality that we’ll get there.
And how did the race turn out? Well, I haven’t seen an actual crowning, but Team Crypto was the first to get to the Las Vegas sign, which was basically the finish line—I haven’t seen anything that mentioned how each fared at the number of states visited or modes of transportation used. If Team Crypto did prove the winner, it was their second straight title.
The event will return to Vegas next year, the dates being October 27-30, 2019.
News Comments Today’s main news: RateSetter overhauls Rolling Market product. Revolut to offer cash back in cryptocurrency. Kabbage hires new CTO. BlueVine raises $200M. iZettle expected to IPO. ETMoney launches CreditLine. Today’s main analysis: Are marketplace lenders, tech companies living up to the hype? Today’s thought-provoking articles: Revising the ICAPM to reflect effects of style investing. Cagney’s Figure to offer home […]
Kabbage, Inc., a global financial services, technology and data platform serving small businesses, appoints James Chou as its chief technology officer (CTO). With more than 20 years of successfully leading technology innovations, Chou will oversee the development of the company’s next generation of data-driven financial products and services for small businesses.
The new startup plans to offer three- to 10-year home equity loans and a buy-lease-back product, the report says. In other words, it will purchase retirees’ homes and then lease them back. Many banks cut down on these types of loans following the financial crisis, but they’re starting to gain traction again due to rising home prices.
Online lender BlueVine has secured a $200 million asset-backed revolving credit facility with Credit Suisse. Additionally, the SME focused platform said it has upped its business line of credit to $250,000. Earlier in 2018, BlueVine doubled its invoice factoring credit limit to $5 million. BlueVine’s total funded volume since founding is expected to top $1 billion in 2018.
To date, BlueVine has raised more than $400 million in equity and debt funding and is funded by Lightspeed Venture Partners, 83NORTH, Correlation Ventures, Citi Ventures, Menlo Ventures, Rakuten Fintech Fund and other private investors.
The Credit Access and Inclusion Act of 2017 would amend the Fair Credit Reporting Act to allow the reporting of certain positive consumer credit information, such as on-time payment histories, to consumer reporting agencies. In other words, the legislation would help consumers build up their credit history for something they’re already doing.
There are now close to 30 private fintech startups with valuations at or above $1 billion, according to data platform PitchBook. A few of them are increasingly cited as possible IPO candidates. Among the most closely watched are Pimco-backed GreenSky, which has already filed paperwork with the Securities and Exchange Commission, and Dutch payments company Adyen BV, said to be considering IPO as soon as this year.
The question now is what happens to those billion-dollar-plus valuations when the public gets a look at the companies’ financials and growth projections. In the past, fintech companies haven’t fared too well. Square Inc., which is set to report earnings this week, is the exception.
BOK Financial, a top-25 regional financial services company, has implemented a partnership with Roostify, a digital lending platform that gives customers more control of their home buying process while allowing loan officers to utilize the latest technology to more easily process loans.
The new digital platform is a tool that offers functionality and efficiency to customers including:
Customers can start an application, provide documentation and follow their loan’s progress online.
Applicants have a secure way to upload, send, and receive loan documents. Homebuyers can add other involved parties to transaction, such as the real estate agent.
Users don’t have to guess where they are in the process – they will receive timely loan status updates.
Garrido also entered a competition to win a trip to New York furnished by SoFi, the company that’s made its name refinancing student loans, including one of her own. The occasion of the competition, which Garrido ultimately won: To join other SoFi customers—or “members” in the company’s parlance—who paid off their debt to celebrate at a rooftop bar and restaurant last Thursday in the swanky William Vale hotel in Williamsburg, Brooklyn.
On one side of the student debt story are those that our college finance system has truly crippled: Borrowers who leave school with debt and no degree or graduate with degrees worth little in the labor market, or benefit less from their degree simply because of where they came from. Many in the latter group struggle to repay the debt—and not necessarily due to lack of ambition. Despite the rebounding economy, levels of student-loan delinquency remain stubbornly high.
A District of Columbia federal judge dismissed a lawsuit brought by state bank regulators against the U.S. Comptroller of the Currency over its proposal to offer charters that would let so-called fintech companies do business nationwide.
Since the OCC has not reached a final decision on the fintech charters, the claim of harm by the Conference of State Bank Supervisors (CSBS) was speculative, U.S. District Judge Dabney Friedrich wrote in her decision tossing out the case, issued late on Monday.
Introducing the RAD Lendingplatform, a foundation for the financial products for the modern crypto economy, where a family of RAD credit products — personal and business loans, credit cards — will help filling the gap between crypto holdings and real-life fiat spending.
RAD Lending’s peer-to-peer (p2p) lending platform will use the benefits of the blockchain and smart contracts for its crypto secured credit products. The platform will connect fiat money investors looking for the predictable yield, with crypto-asset holders looking for loans in easily spendable fiat. By accepting crypto assets as a collateral against loans, and using the guardrails of the blockchain and smart contract technology, the platform will mitigate risks for both investors and lenders.
A recent paper by Michael Stutzer, of the University of Colorado at Boulder, Leeds School of Business, suggests that the intertemporal version of the capital asset pricing model (ICAPM) needs some revision in light of the market dominance of style investors.
A more full statement of that might be: it needs revision in light of the lack of empirical support for its foundations on the one hand, and in light of the dominance of style investors on the other: and that these two revisions turn out to be one and the same.
Digital wealth adviser Personal Capital is offering its financial advice platform to employers to grow its user base beyond its core group of investors.
The company last week inked an agreement with benefits provider Alight and investment firm AllianceBernstein to use Personal Capital’s tech platform to help participating employers select personalized 401(k) offerings for their staff members. Co-branding with Personal Capital exposes large swaths of new users to the platform.
The second presentation of the 23rd Annual Consumer Financial Services Institute, sponsored by the Practising Law Institute, will take place in Chicago on May 7-8, 2018. I am co-chairing the event, as I have for the past 22 years.
New to the Institute this year will be a panel on the second day that I will moderate and that will discuss the rapidly changing landscape for marketplace lending and fintech.
RATESETTER has unveiled a series of changes to its Rolling Market product, removing the ability for investors to set their own rate on reinvested funds and altering how returns are paid.
Currently investments in the Rolling Market are reinvested each month, meaning the interest rate can change, but from 6 June, investments will remain matched to the same borrower until the loan is repaid, so the return will remain the same.
The rate will only change when the money is reinvested.
Senior executives at several smaller lenders and established high street banks said they expect a pick-up in M&A activity, after last year’s £850m takeover of Shawbrook and FirstRand’s £1.1bn purchase of Aldermore put the sector on notice for a return to dealmaking.
A GROUP of the UK’s leading cryptocurrency platforms want the regulator to use peer-to-peer finance legislation as a framework for their own sector.
CryptoUK, a self-regulatory trade association with eight members, has set out new plans for the Treasury to make cryptocurrency investment a regulated activity under the Financial Conduct Authority (FCA).
The plans are part of a written response by CryptoUK to the House of Commons Treasury Select Committee inquiry into digital currencies, which is currently underway.
But as the P2P property market has expanded, a few clear trends have begun to emerge. In some parts of the country, P2P property lending is going strong. In fact, if you’re based in one of these P2P property hotspots, you may be living next door to one…
Walthamstow-Wellesley is currently offering investments in three new-build properties in E17, while Octopus Choice has loaned money on more than 30 properties in the E17, N17 and N15 areas. The Octopus platform is offering rates of between 4.49 per cent and 7.99 per cent of borrowers, with an average of four per cent in returns for investors.
Huddersfield-The West Yorkshire town of Huddersfield has been a surprising recipient of P2P property funding, largely thanks to property platform Lendy, which has financed several large property developments there. Its proximity to Manchester and Leeds means that it is likely to attract even more developer interest in the coming years.
Eastbourne-Landbay currently keeps 21 per cent of its property portfolio in the South East, with dozens of properties in and around Eastbourne.
As a part of its third annual YPO Innovation Week, YPO will host the Global Fintech Summit in London, United Kingdom, where the most dynamic global innovators will be together for a rare chance to network, overturn conventional thinking and leave inspired with the tools to infuse innovation in their companies and communities.
The Global Fintech Summit 2018 will explore the latest disruptive technologies and opportunities across the fintech landscape – including blockchain, bitcoin and robo-advice to online payments, crowdfunding, P2P lending and private equity while connecting YPO leaders from throughout Europe and across the world to share challenges, insights and needs.
An unprecedented wave of Chinese technology companies is accelerating plans to raise money from the global capital markets, hoping to leverage investors’ optimism about the sector and lock in buoyant stock valuations.
In recent months, at least a dozen Chinese companies with collective private valuations of roughly $500 billion have been in talks with bankers and potential investors about initial public offerings in the second half of this year or in early 2019, according to people familiar with the discussions.
iZettle is gearing up to announce its intention to float as early next week in what would be the largest initial public offering by a European financial technology company.
The Swedish payments and ecommerce group has been in talks with potential investors and could seek a valuation of about SKr10bn ($1.1bn) when it is expected to launch its IPO process on Tuesday next week, according to people involved in the flotation.
Some fintechs will aggressively go it alone and challenge the legacy banks in their most lucrative markets. And recent rule changes in Europe, which force banks to transfer closely guarded customer information to fintechs upon customer request, will add new momentum to the upstarts.
Still, the drive towards collaboration is well underway, as the following on-the-ground examples suggest.
ICICI Bank, India’s largest private bank, and Paytm, the country’s largest digital payments platform, have jointly launched a digital credit account on the Paytm app. Paytm-ICICI Bank Postpaid gives customers access to instant micro-credit for everyday expenses — from bill payments to movie tickets. Its algorithm – from ICICI – is based on a customer’s financial and digital behavior and evaluates credit-worthiness in seconds.
Bocom International, the investment banking arm of China’s Bank of Communications, has partnered with Hong Kong fintech firm FDT-AI to develop intelligent, personalized investment research based on bank clients’ past transactions. The hope is to offer more tailor-made investment advice.
ING Group has partnered with Scalable Capital, a leading online wealth manager and robo-advice firm in Europe, to offer a fully digital investment solution to ING’s retail customers starting in Germany. Customers do a paperless registration in under 15 minutes. With a minimum investment of 10,000 euros they can monitor their portfolios on both Scalable Capital and ING mobile apps and online portals.
Kabbage, a U.S.-based leading online lender, has partnered with large players such as Scotiabank, for streamlining online lending; MasterCard, for business loans through MasterCard’s network of acquirers; ING, to provide capital to small businesses; and Santander Bank, for loans to small and medium enterprises.
Financial regulators on both sides of the Atlantic have turned their attention to the cloud, as concerns mount over how to supervise online storage services, which hold information from the world’s biggest banks.
Global financial institutions are becoming increasingly reliant on the cloud — using it to store customer-account data and their banking systems, leading supervisors to fret about what might happen if a bank collapses.
As well as cyber risk, regulators are worried about concentrating so much information in the hands of Amazon, Google and Microsoft — the three big companies that dominate cloud provision — without the same level of supervisory oversight as banks, according to people familiar with regulatory discussions.
But Chris had an itch to start a new company, one that was based on this emerging blockchain technology.
Of course, this move proved to be prescient and his new company, which eventually became known at Ripple, has the potential to completely rewrite the rules of global commerce. In 2013 they introduced the XRP token as the vehicle to help them achieve this goal. XRP (as of this writing) is the third most valuable token with market cap of $32 billion. This is down considerably from its high in January when its market cap reached around $150 billion and briefly made Chris Larsen one of the wealthiest people in the world.
When you think about how far technology has come and the fact that information has flowed freely across borders now for 25 years it is just crazy that the way we move money internationally has barely changed since the 1980s. And while companies like Transferwise have made it more efficient and simple to send money internationally, it is still more expensive and much slower than the system that Chris Larsen envisions. He sees this new system as the second internet: the internet of value.
Bitcoin, marketplace lending — pick your poison — they came to disrupt, but the jury is still out on whether they can ever achieve that goal. The global citizen and international nomad may change the nature of work around the world, but they need a “finabler” to help them do it.
And new EU regulations like GDPR may be a sea change in how business worldwide will get done, but no one seems to know if that change will come as an easy, rising tide or a tsunami of transformation.
BFEX’s peer to peer lending platform is a financial market place with a difference: it is transparent, secure and credible and different from the banks with its proprietary; Decentralized Social Trust Credit Scoring that will provide millions with access money at fair rates with a new improved social identity. BFEX will create better indicators by making meaningful connections between traditional and nontraditional data where raw Credit scores are only a part of the story. Nontraditional data will allow us to look at trends in consumer behavior that completes the picture and tells a better story of the person.
Times Internet’s ETMoney has entered into the lending space with the launch of a new service called CreditLine on its platform, in partnership with RBL Bank.
ETMoney is a personal expense management app which allows users to invest in mutual funds, gold deposits, liquid funds etc, buy insurance, manage expenses and more. The company claims that the app has 4 million users so far and said that it has grown 20x in the last 12 months.
Paytm is reportedly trying to enter the lending space and is seeking a licence from the Reserve Bank of India (RBI) to become a peer-to-peer lending platform.
Mobikwik too is working on the launch of a lending product that will offer instant credit to customers directly from its app. Other players in this segment are like Capital Float, NeoGrowth, Paytm-backed CreditMate, CASHe, LendingKart, MoneyTap, EasySalry, Faircent, LoanMeet amongst others.
OurMoneyMarket has just closed a $4 million funding round which saw N2N Connect, a Malaysian stock exchange-listed financial information provider backed by Japan’s financial media giant, Nikkei Inc, emerge as a key shareholder. Singapore-based YK Capital, a tech company investor, also tipped into the raising.
Run by Adam Sutherland, formerly a securitisation banker at National Australia Bank, and chief operating officer Crystal Anderson, and chaired by John Barry, NAB’s former head of debt capital markets in Asia, OurMoneyMarket has been up and running for nine months and during that time has made $1.5 million in loans.
It’s taking things slowly; there have been $95 million in applications. It has delivered early investors a 13 per cent net return. Revenue is growing at 45 per cent month on month.
The Intellectual Property Office of Singapore (IPOS) has announced the launch of a new initiative, dubbed the Fintech Fast Track initiative, which aims to grant patents for fintech innovations at a faster pace than before. While it can traditionally take up to 2 years for a patent to be granted, this new initiative will bring that down to 6 months for new fintech solutions. The initiative includes fintech innovations related to electronic payments, investment platforms, insurance technology, blockchain, banking, security, fraud, and authentication, among others.
News Comments Today’s main news: Ron Suber joins MoneyLion board. Prosper reports full year results. Orca launches P2P investment platform. Santander, Ripple partner on money transfer app. Cash Suvidha raises $1M. China opens payment market to foreign companies. Today’s main analysis: The cost of bankruptcy. Today’s thought-provoking articles: LendingTree studies the cost of bankruptcy. Liwwa creates big impact in MENA. The lowdown […]
The cost of bankruptcy. “Mortgage borrowers with scores between 720 and 739 three years after bankruptcy were offered similar APRs to those without bankruptcy, indicating a strong credit score can counteract the effects of a prior bankruptcy.”
Prosper today reported full year results for 2017. Loan originations and transaction fee revenue were up 31% and 37% year-over-year to $2.9 billion and $130 million, respectively. Prosper also generated cash from operations for three consecutive quarters, starting in Q2 2017.
Summary of Key 2017 Financial Highlights:
Surpassed $11 billion in cumulative personal loan originations through the platform since inception
Increased loan originations 31% and transaction fee revenue 37% year-over-year
Net loss of $115 million included $89 million of non-cash charges related to warrants to purchase preferred stock that were issued to a consortium of investors and a third party in connection with a settlement agreement
Adjusted EBITDA(1) of $5 million increased $43 million year-over-year
Generated cash from operations for three consecutive quarters, starting in Q2 2017
Closed $50 million Series G funding, ending 2017 with approximately $100 million of liquidity
LendingTree today released the findings of its study on the cost of bankruptcy. The findings show that while a prior bankruptcy can make it more expensive to borrow, it’s certainly not impossible to qualify for credit. If borrowers wait to apply for new loans even just a few years after bankruptcy, they may find rates that aren’t too far off from what other borrowers are being offered.
Forty-three percent of people with a bankruptcy on their credit file have a credit score of 640 or higher within a year of the bankruptcy. Within two years of bankruptcy, 65 percent have a credit score above 640.
A typical $15,000 auto loan incurs an extra $2,171 in borrowing costs for those seeking offers less than a year after bankruptcy, but just $799 for those who wait at least two years after bankruptcy.
Borrowers who have a 3-year-old bankruptcy and apply for a mortgage see an offered APR that is 19 basis points higher than those without a bankruptcy. The higher the APR, the higher borrowing costs will be.
Mortgage borrowers with scores between 720 and 739 three years after bankruptcy were offered similar APRs to those without bankruptcy, indicating a strong credit score can counteract the effects of a prior bankruptcy.
Despite becoming a bank holding company, Goldman’s business remained focused on corporations and the wealthy. That changed a few years ago as it began plotting new strategies, says Omer Ismail, chief commercial officer for Marcus. The Wall Street Journal recently published an in-depth account of the creation of Marcus, including juicy tidbits like conversations over lunch in the Hamptons.
Goldman decided to tackle the unsecured personal loan space first.
Marcus has found its particular angle in making its loans highly customizable. Rather than setting traditional loan terms, like three years or five years, it asks you how much you can afford to pay each month in addition to asking you how much you need to borrow. So, you might end up with a 31-month installment loan, which is not a conventional loan term.
Synthetic identity fraud usually involves creating an entirely new identity composed of information with no ties to a known consumer. This identity is then used to apply for credit and services. Synthetic identities are one of the most difficult fraud threats institutions face today and their prevalence has exploded over the past several years. Synthetic identity fraud is arguably the perfect crime because there is no consumer victim.
Put yourself in the shoes of a fraudster. As you consider your many nefarious options for committing a crime and getting away with it, you decide that the best crime is one where there is no clear victim. Sure, robbing a bank using a synthetic identity victimizes the enterprise, its shareholders, its employees and taxes its customers. However, no one individual is intentionally, directly hurt. Therefore, the non-existent victim does not alert authorities and the fact that a crime has been committed is lost to history. There is a “credit loss” and the debtholder is impossible to locate. The debt is written off, or sold, and the fraud is perpetuated yet again. Like I said, the perfect crime.
The average borrower in Hawaii spends 36.2 percent of their monthly paycheck on credit card, student loan, and housing payments, according to a study by Credible.com, making Hawaii the state with the highest average debt-to-income ratio.
According to the online lender marketplace, the average monthly credit card payment for a Hawaii resident is $238, the average monthly student loan payment is $385, and the average monthly housing payment is $1,091, for a total of $1,714.
With average annual income in Hawaii at $56,889, the state’s average debt-to-income ratio is 43 percent more than residents of Michigan, the state with the lowest debt-to-income ratio.
On average, Michigan residents in the dataset spent 25.3 percent of their monthly income on credit card, student loan and housing payments.
Nationwide, the study found the average American in the dataset paid $207 on credit card debt, $370 on student loans and $906 on housing each month, while taking home an average salary of $60,671.
When fund managers choose experienced service providers, including custodians, auditors, accountants, attorneys and administrators, they can increase transparency in the fund, which can in turn promote investor confidence. Service providers can be much more than just an added expense; they can be valuable partners that can help position the fund for success.
Orca, an independent data, research and analysis provider targeting the the UK peer-to-peer (P2P) lending market, has launched its premier investment platform. The new platform will allow investors to easily diversify across multiple P2P lending platforms from a single P2P investment portfolio.
Orca seeks to provide their new service to the retail investor market.
Total cumulative lending is £13 billion since the asset class was created in 2005. Orca’s secondary service, Orca Analytics, has 2016 to 2017 growth at 18%, with £4 billion lent in 2017 alone. The estimated customer-base stands at approximately 200,000-250,000 retail investors.
The Orca Investment Platform Features include exposure to both consumer, business and property lenders. Investors may expect a return of 5% net of Orca’s cut which is a 0.65% fee.
Khosla said his firm is already in “open conversations” with multiple countries about its global expansion plans, including the U.S., Canada, Spain, Italy, Germany, Singapore, South Africa and Australia. The company has already established offices in some of those countries, he added.
OakNorth is expanding abroad by licensing its technology platform, ACORN, to banks in other countries. The platform uses big data and machine learning to optimize credit for small-to-medium sized enterprises (SMEs).
OakNorth offers loans between £500 and £30 million to SMEs. It was granted a banking license by U.K. regulators in 2015.
‘No firm views’ on IPO
OakNorth is currently valued at $1.4 billion, which puts it in the ranks of the U.K.’s “unicorn” companies — firms valued at $1 billion or more.
IFISAs are also a way for investors to do something interesting with their savings. For example, Oaksmore has recently launched an Isa which allows investors to capitalise on historic renovation.
This particular IFISA, specialising in historical building renovation, offers a tax-free return of up to 7.5 per cent each year.
Another lender trying to do some- thing different is Folk2Folk, a peer-to- peer platform for rural and local businesses. It is offering an IFISA which gives lenders the opportunity to earn 6.5 per cent interest a year, while supporting British businesses within their local area.
Banco BNI Europa launched an online account opening process through videoconference. This new process also introduces an innovative system of documents signature with a qualified digital certificate and is available for Portuguese citizens who want to open an individual current account. The process is simple, fast and intuitive, without the usual bureaucracies associated with account opening.
This product is offered in partnership with DigitalSign, a Portuguese Certifying Entity specialized in the issuance of qualified digital certificates, registered in the National Security Office as an accredited entity. The partnership with Digital Sign allows, in addition to the online account opening, the issue of a digital certificate, with similar strength to a physical signature, which may be used by the client in the context of other contractual relations with the Bank.
Santander is on track to launch an international money transfer app in partnership with fintech startup Ripple in the next few months, the bank’s UK CEO has confirmed.
Nathan Bostock told the International Fintech conference in London on Thursday: “This spring, if not one beats us to it, we will be the first large retail bank to carry out cross-border payments at scale with blockchain technology.”
Peoples Trust Company of Saint Albans has selected Finastra to provide a single, end-to-end lending solution for commercial and consumer lending. Using Finastra’s Total Lending solution, which packages the power of the Fusion LaserPro, Fusion DecisionPro and Fusion CreditQuest products, the bank will be able to manage its lending process from origination through to booking and thus increase efficiency and customer service.
FintruXNetwork is a global P2P lending blockchain-based ecosystem, powered by Ethereum. FintruX Network aims to connect borrowers, lenders, and rated service agencies. FintruX facilitates marketplace lending in a true peer-to-peer network to ease the cash-flow issues of small businesses and startups. The startup announced today it has successfully raised over 22,000 ETH ($25 million) in token sale from contributors around the world. The proceeds of the sale will be used to build an Ethereum-based platform that will fundamentally enhance the P2P loan experience for small businesses and startups.
Delhi-based fintech startup, Cash Suvidha, has raised $1 million in its pre-series A round of investment from Initia Holdings Ltd., Vipin Agarwal, Partner in India Industrial Growth Fund and others. The company plans to use the newly secured funds to increase customer base and to further strengthen its technological infrastructure.
The company claims to receive 15,000 loan applications every month and disbursement of loans in another 2 working days. The company has raised a total of $5.2 million and claims to have disbursed over Rs 152 crore.
Further, Cash Suvidha has disbursed loans to over 35,000 borrowers with an average ticket size between Rs 20,000 – Rs 5,00,000.
Reportedly, India’s largest public sector bank, State Bank of India is looking to create a blockchain-based exchange for Non-Performing Assets (NPA’s).
To be launched in association with 30 banks, this platform will assist the banks in data-driven price discovery.
SBI is said to have assets over $460 Bn and offers services in areas such as retail, corporate banking, financing, and insurance. The Indian banks are said to have to battle with NPA’s worth $210 Bn of which $30 Bn resides with SBI alone.
Broadly, there are three types of software systems that enterprises employ. These include:
a)Systems that help in running a business process
b)Those that help companies to grow their businesses
c)Systems that transform businesses
In the year 2013, China reported an eight-fold rise in the total number of borrowers that touched 1,49,300. The growth continued through 2014, with total borrowers reaching 630,000 by the year’s end.
Traditionally, lenders considered credit score as the key parameter in defining a borrower’s creditworthiness. In case of digital lending, a borrower’s risk profile is defined based on aspects such as Aadhaar for identification, salary slips for working professionals, and the applicant’s financial behavioral patterns determined based on information curated from online sources such as social media channels.
Boston Consulting Group estimates that by 2020, 48% of India’s internet users will be rural and of that, 21% will be women.
QARASoft’s now-defunct platform, called “QARA,” connected individual asset managers with funds pooled — or borrowed — from peer-to-peer investors, in part by making use of the venture firm’s artificial intelligence-powered robo adviser.
The “decentralized” platform collected some 100 retail investor loans in the first two weeks. But they were retrieved after the Financial Supervisory Service banned its operation, despite a patent earned the previous year for the pooling scheme of the fund and the platform’s three-year operation of its beta version.
The service will primarily target retail investors in overseas markets in the United States, the United Kingdom and Singapore, and the English version will be launched prior to a Korean version.
SMALL business executives who took part in the AmBank BizRACE gained a new perspective in managing their operations, allowing them to bring the business further.
The top 15 finalists in the programme recently completed two, out of four, executive development programmes at Menara AmBank.
Peoplender Sdn Bhd chief executive officer Kristine Ng, a participant in the programme, said she was inspired with a new structure for her business after the first day itself. Ng recalled one of the trainers talking about constraints that one would face in growing businesses – if it doesn’t fit the business model, then change must occur.
According to the World Bank, 63 per cent of Mena SMEs do not have access to capital.
In Jordan, SMEs represent 97 per cent of companies and create 70 per cent of new jobs in the kingdom, according to Oxford Business Group, Jordan: Finding Financing for SMEs.
Liwwa is a peer-to-peer lending platform in the Mena region that provides SMEs with trade and asset financing. Liwwa’s target audience is divided into borrowers and investors, also referred to as lenders. To date, liwwa has maintained a solid portfolio and delivered annual returns of 10.6 per cent.
The liwwa index delivered 9.45 per cent over the last 12 months, which is attractive.
Liwwa has raised $5.55 million from investors and $6 million in debt to date. Their investors include Silicon Badia, Bank Al Etihad, DASH Ventures and Mena Venture Investments. Their debt partners include Bank Al Etihad, Capital Bank, Arab Bank and the Dutch Good Growth Fund.
News Comments Today’s main news: Revolut breaks even, prepares for global expansion. RateSetter finances divorces. Which Isas pay 6% or more. Half of all employers offer financial advice. CoAssets increases revenue by 471% in half a year. Today’s main analysis: Do Americans really want a bank branch? Today’s thought-provoking articles: Ron Suber, Godfather of Fintech. Unscrupulous banks fueled the rise […]
Half of employers offer financial advice. AT: “I didn’t realize it was so high, but the interesting part of this is that the number is expected to increase. Will this be the new way to retain workers?”
Do Americans really want a bank branch? AT: “I’m quite surprised by this. It’s likely a Baby Boomer vs. Millennial thing. Baby Boomers, the second largest living generation, and probably many Gen Xers, likely want bank branches. My guess is, the majority of Millennials don’t. I’d expect this number to decrease over time as Baby Boomer’s die out and younger generations grow into adulthood.”
One possible cause of an employee’s poor attitude is that he or she has looming debts or is attempting to climb out of a credit score canyon. Workers facing these challenges are often unable to completely focus on their job responsibilities. It’s no surprise that constant stress over meeting financial obligations leads to a loss of focus and time dedicated to work obligations. And because employees work for paychecks that go toward their debts, it makes sense that they begin to associate the two.
Consumers need access to credit, and bank-fintech partnerships are one way to meet their needs. Indeed, bank-fintech partnerships are good for both consumers and banks.
As I noted, consumers benefit because banks can use fintech to deliver safer, more transparent, lower-cost and more convenient financial products and services over the internet and mobile devices.
Banks benefit because fintech companies can leverage big data and technology, offering the infrastructure banks need to serve and welcome more people into the financial system.
An excellent example of community banks using fintech to compete with the Wall Street banks is Radius Bank, a $1-billion asset institution in Boston, which according to news reports is establishing “long-term relationships” with fintech providers, and is finding them to be “mutually beneficial.”
The Fed released the minutes of the January FOMC meeting and provided a bullish outlook to the economy with upside risks due to tax reform. The committee indicated that they were on track to raise interest rates in the March meeting, and market participants are expecting 3 rate hikes in 2018.
Meritize, a Frisco, Texas-based student lending platform, raised $6.8M in seed funding.
Colchis Capital, Chicago Ventures and Cube Financial Holdings led the investment round with participation from ECMC, College Loan Corporation, University Ventures, City Light Capital, PC Squared and Meritize management.
“In my view, [Lending Club’s] underlying problem is that they don’t have alignment of interest between their stakeholders,” Tavares said. “At LendingPoint, we have a different approach. We look at it really as a balance sheet model, which means that we put everything on our books. We use our own equity. We leverage other investors’ capital, but we’re not an origination platform…Lending Club’s model primarily is that they have to continue feeding the beast, so to speak, in order to continue making their revenues. They don’t have inventory to continue generating assets or to monetize going forward. That’s a significant shortcoming in their model,” he said.
About 8,000 small business loans are denied every day in this country, according to the U.S. Federal Reserve. It’s a story Alicia Villanueva knows all too well.
So in 1992, Weaver founded Opportunity Fund, launched with a consortium of 15 banks. But although the San Jose-based non-profit works with traditional lenders, its business practices are a bit different. Weaver says Opportunity Fund delves into an applicant’s financial picture and character. And since it lends to people with bad or non-existent credit, a granted loan comes with an automatic offer of hands-on financial management support, and a hefty dose of financial responsibility.
Today, Opportunity Fund loans about $5 to $7 million a month to small business owners in California and 13 other states. The money comes from business and private donations. An average loan can range from $2,600 to $250,000. Under Weaver’s leadership, 6,200 businesses have received loans.
Opportunity Fund, along with other partners like Lending Club, is set to expand into other parts of the U.S. later this year.
Today, in addition to teaming up with development companies, many investors are using technology solutions to research options remotely. Here are the three trending ways technology is revolutionizing how new investors step into the real estate market space.
Mobile apps like Vacation Rentals by Owner (VRBO) and Airbnb have become popular and more people are now looking to invest in such short-term rentals.
Big data is now a critical offering for the public, and the real estate niche is looking for ways of gathering and presenting the information for driving purchase behavior.
Following the success of the customer-centric applications, it’s clear to see that the industry holds a huge potential if technology is leveraged to bring in new investors. Real estate is the largest global economy asset with figures hinting at $217 trillion – surpassing the world’s GDP of $80 trillion! This is a clear indicator that there is a huge potential for financial freedom creating entrepreneurs looking to tap into the real estate market.
According to research conducted by Novantas, 60% of Americans said they would rather open a new checking account in person at a bank branch than on a phone, tablet or desktop computer. Reinforcing this finding is the reality that most consumers still only use digital channels for the most basic banking functions, such as checking account balances and transferring funds. For more complicated issues, like problems with an account or advice, most consumers prefer human contact.
The reliance on branches in North America is almost double other countries, where better digital offerings have been introduced. In fact, according to Novantas, 75% of consumers in Australia report visiting the branch less than once per month, or even less! The UK is very similar while, interestingly, only about half of US consumers exhibit the same behavior.
The banking industry has seen the closure of 1,700 branches in the 12 months ending in June 2017 – the largest one-year decline on record. Capital One Financial Corp. has cut 32% of its branches from mid-2012 to mid-2017, while SunTrust Banks Inc. cut 22% and Regions Financial Corp. has cut 12%.
Working with financial technology startup AutoGravity, U.S Bank created a new platform on USBank.com that provides a simplified, streamlined loan application process for users that typically takes just minutes to receive a loan decision.
Car buyers using the new U.S. Bank tool simply:
1) Pick their car and select a dealership online
2) Apply for a pre-approval for a U.S. Bank loan online
3) Close the loan at the dealership and drive off in their new car
Total commercial and industrial loans extended by U.S. banks were up just 1% from a year earlier on Feb. 7, according to weekly Federal Reserve data. For the month of January, C&I loans were down an annualized 10.8% compared to December, according to calculations by Keefe, Bruyette and Woods.
Asked how demand for loans has changed over the past three months from large and medium-sized firms, 84% said it was “about the same” or “somewhat stronger,” while just 16% said it was “moderately weaker.” For small firms with annual sales of less than $50 million, 88% of bankers said loan demand was about the same or better, while only 12% said it was weaker.
On Wednesday, Greenlight Financial Technology — the creator of a smart debit card for kids, teens, and college students — closed $16 million in a Series A funding round. Its investors went beyond your traditional venture capital firm, including a disparate coalition of financial services bigwigs like SunTrust Bank and Ally Financial as well as the Amazon Alexa Fund, among other VCs. Greenlight, whose mission is to help strengthen financial literacy among kids and give parents a platform to raise “financially smart kids,” will use the new funds to develop its products.
That coalition of Greenlight partners signals a renewed understanding of the reality of most Americans’ financial lives — 57 percent of Americans are financially unhealthy according to the Center for Financial Services Innovation — by legacy financial services companies coming to terms with the fact that they need to be in the business of financial health in order to keep customer relationships in tact over the long term.
Attorney General Mark Herring announced today that his office has reached a settlement with eight affiliated online lenders and debt collectors to resolve allegations that the companies offered unlawful open-ended credit plan loans and engaged in unlawful debt collection practices including contacting borrowers’ employers and implementing wage garnishments. As a result of the settlement, borrowers will receive nearly $150,000 in restitution and forgiven debt.
The settlement includes the following key terms relating to loans made by the lenders during the period from January 2015 through June 19, 2017:
The Lenders agree to refund all interest and fees paid by consumers in excess of 12% of the loan amount, totaling approximately $85,000;
The Lenders agree to forgive all outstanding remaining debt of Virginia consumers, totaling over $63,000;
The Lenders agree to a permanent injunction against consumer lending activity in Virginia;
The Debt Collectors agree to a permanent injunction against all debt collection activity in Virginia;
The Lenders agree to pay $10,000 in civil penalties and $10,000 in attorneys’ fees;
The Debt Collectors agree to pay $75,000 in civil penalties and $10,000 in attorneys’ fees.
The companies include six lenders (Field Asset Service Team, LLC; VIM Holdings, LLC; MR Capital Group, LLC; Nascent Holdings, LLC; B Financial, LLC; and DTS Capital, LLC, collectively “the Lenders”) and two debt collectors (Bradley Goldberg & Miller, LLC and U Solutions Group, LLC, “the Debt Collectors”) that acted in concert to provide and collect open-end credit plan loans made over the Internet to Virginia consumers.
The Lenders offered open-end credit plan loans and imposed “service fees” as high as $160 per month. The Debt Collectors then emailed consumers in an effort to collect on these loans and contacted the consumers’ employers to implement wage assignments and collect money directly from the consumers’ paychecks.
Now it emerges that one bank was actively working against small businesses in its greed-fuelled quest for profits and bonuses. RBS has been exposed for making up fees, imposing punishingly high interest rates, acquiring equity and property from failed businesses – and pocketing huge bonuses off the back of it.
As a result, it is alternative lenders that are now the go-to for independent businesses in need of assistance when it comes to growth. Take, for example, the business cash advance, which is sometimes referred to as a merchant cash advance. This funding can be from as little as £500 up to £300,000 and is advanced to the business against future credit and debit card turnover.
Last week, Ratesetter launched an Isa paying a top rate of 5.8%, while yesterday (24 February), Easyjet founder Stelios Haji-Ioannou launched an tax-free account aiming to pay 4.05% per year.
Other innovative finance Isas are currently paying returns as high as 16% a year.
Zopa is currently paying between 4% and 4.6%. Zopa primarily lends to individuals, Ratesetter lends to both individuals and businesses whereas Funding Circle lends exclusively to small businesses. The latter’s innovative finance Isa is only available to existing customers, but is projecting an annual return of 7.5%.
The FCA’s new webpage contains its ideas for a global sandbox [14.02.02]. Its current sandbox only allows firms to test their ideas in the UK.
It highlights three areas:
addressing “pre-identified challenges” in areas known for “regulatory problems that cross jurisdictional boundaries” e.g. AML and KYC on-boarding.;
enabling firms wishing to expand in different markets to “bring their ideas to market more quickly and easily, creating more effective competition.” The FCA asks for firms who could benefit from testing out their ideas in a number of markets to get in touch; and
policy and regulatory challenges – the FCA suggests the sandbox could be used to convene “joint events and papers on emerging trends and challenges” using the experiences of the range of firms and regulators taking part to develop “consistent approaches”.
British inflation will outstrip gains in house prices this year and next, particularly in the capital, as uncertainty over Brexit and weak consumer spending power hits demand, a Reuters poll found on Friday.
Next year, house prices will rise 0.9 percent in London and 2.0 nationally, still both below the 2.1 percent expected inflation rate. In 2020, London prices will increase 2.0 percent and by 2.3 percent nationally.
“Quite simply, with loan-to-income ratios for first time buyers sitting at around four times, average salaries of 33,000 pounds ($46,000), and your average flat in London costing over 500,000 pounds, it’s extremely difficult to see how London can be viewed as anything but very expensive,” LendInvest’s Lockhart said.
Hang Seng Bank plans to expand the use of fintech to mobile banking services and is also toying with the idea of incorporating facial recognition, after initial success with iPhone X, to allow customers to withdraw cash from its ATMs across the city, according to its chief executive.
The global facial recognition market is forecast to be worth US$6.5 billion by 2021, up from US$2.3 billion in 2016, according to estimates from research company Technavio.
The 10-K filing referred to cryptocurrencies, without naming any specific one, three times under a subsection titled “Risk Factors” and described three different ways in which they could pose problems for the bank’s business.
The first reference was under geopolitical risks, with the bank talking about international money-laundering.
The third reference was along similar lines, with BoA saying: “The widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services as we grow and develop our internet banking and mobile banking channel strategies in addition to remote connectivity solutions,” adding it “might not be successful in developing or introducing” competing products at lower prices.
Spotcap today announced Vishal Uppal as the winner ofthe Fintech Scholarship 2017. The first of its kind in Australia, the scholarship awards one aspiring graduate with an interest in fintech $10,000 towards the cost of their tuition.
P2P lending, on the other hand, is a completely tech-driven investment, which gives a net annualised return of 18-22 per cent to lenders, who start earning their principal and interest back from the very first month. The returns are higher because you can lend directly to the borrower and the intermediary costs are drastically reduced.
A majority of investors on these platforms are salaried professionals aged between 20 and 35 years looking for additional sources of income.
On Faircent.com lenders can invest as low as ₹750 per loan size or choose tech-enabled processes like auto-invest to save time. These features are a major attraction for millennials and, in fact, according to the last Research and Analytics report on P2P lending published by Faircent.com, 64 per cent of lenders are below 35 years of age.
A growing number of millennials are also opting for investments into commercial real estate, as opposed to investments into residential properties made by their parents.
Commercial real estate: better yields for better financial security
Leases on these properties are usually taken out for multiple years by blue-chip companies, thus ensuring that steady rental income is assured for a specific duration of time. With India’s rise as a prominent international business destination, the sector is also witnessing remarkable growth; the country’s 537 million square feet of rent-generating commercial real estate inventory is currently estimated to be worth nearly $70 billion.
How technology is enabling millennials to make high-value real estate investments
The investments can start as low as Rs 5 lakh, making the entire process extremely affordable for millennial buyers whilst also allowing them to make multiple investments to diversify their portfolio, increase rental incomes, and minimise risk. Average rental returns to the tune of 7%-8% are quite common, while the overall returns can be as high as 22%.
India is projected to become the youngest country in the world by 2020, with a median age of 29.
BigWin Infotech, a government recognized fintech startup has appointed Suneel Mohnot a the Director on its board.
BigWin Infotech is a self-funded startup who has recently forayed into P2P lending business through its solely owned market place PaisaDukan.com post revised RBI guidelines for NBFC-P2P and one of the strong contenders for NBFC-P2P license.
CoAssets Limited (“CoAssets” or the “Group”) (ASX: CA8), a leading crowdfunding platform and Fintech lender specialising in facilitating funding for businesses reported its financial and operating results for the half year ended 31 December 2017, together with an update on the Group’s growth and capital strategy to the Australian Securities Exchange (ASX) on 22 February 2018.
Total reported revenue increased by 471% from S$446,040 in 2016 to S$2,547,554 in 2017. Group’s profits in year 2017 was S$2,046,013, from a loss of S$3,899,325 in 2016. This increase in profits was due to business activities as well as investment gains. Operating expenses decreased from S$3,570,287 in 2016 to S$2,577,013 in 2017. This represents about S$1million or 28% in cost savings. Registered investor base reached 433,805 as at 31 December 2017. This represents an 88.17% increase from 30 June 2017.
Singapore — CoAssets Pte Ltd (“CAPL”)
After receiving the Capital Market Services (CMS) licence from the Monetary Authority of Singapore (MAS) in June 2017, the company crowdfunded more than S$5.11million worth of deals from 1 July 2017 to 31 December 2017.
Singapore — CoAssets International Pte Ltd (“CAI”)
The company disbursed more than S$6.65million worth of loans over the last 6-months, with its loan book growing to more than S$16.21million as at 31 December 2017.
China — CoAssets China
This represents the Group’s fastest growing market, achieving remarkable growth in registered user base of more than 117% (from 173,000 to more than 375,000 members) from 1 July 2017 to 31 December 2017. The CoAssets platform in China funded more than RMB28.15million (S$5.94million) worth of crowdfunding projects over the last 6-months in 2017.
Hong Kong — Fintech Pte Ltd
In April 2017, the Group acquired Fintech Pte Ltd, an online corporate cash management platform called “PiggieBank ” in Hong Kong. Since then, PiggieBank has successfully managed funds flow of more than S$21. 39million as at 9 February 2018.
Hong Kong — Brighten Finance Limited (“BFL”)
As at 31 December 2017, BFL’s loan book was worth HK$36.91million (S$6.27million).
English First, an English Education Institute signed a joint venture with KoinWorks – a Indonesian Peer to Peer Lending Platform – that serves investments and online loans without collateral for various productive loans.
Key areas of the financial services that are most likely to be affected by blockchain include transfers, payment and lending. We have seen different start-ups such as OneFi, Inspire, Upstart, and Funding Circle, playing critical roles in peer- to -peer lending and services to individuals.
The closest we have seen so far is what VoguePay, a leading online payment start-up, has done.
It recently launched a multi-currency payment platform to enable businesses to send and receive payment from local and international customers, allowing merchants to accept payment in dollars, Euros, Rands, Cedis, Naira and Bitcoin payment.
The average Nigerian bank pays about five per cent interest rate on fixed deposits while requesting for two-digit interest rates on loans from customers. Economically, this does not make much sense because the margin is too wide when compared to what they offer for holding customers’ fund. Many people are tired of the highly monopolistic nature of banking.
News Comments Today’s main news: SoFi brightens startup scene in Helena, Montana. LendingTree rates Upgrade #1 personal loan. UK P2PFA gets a new head. India considering digital payments tax rebate for P2P lenders. Today’s main analysis: Why point-of-sale lending is hot. Today’s thought-provoking articles: Industrial loan company (ILC) applications may soon be seen in a positive light. P2P lending […]
SoFi feeds startup fever in Helena, Montana. AT: “Thanks to technology, anyone can run an international company from anywhere in the world, even small town and rural areas. Your truly hails from just outside Gettysburg, Pa.”
Why point-of-sale lending is hot right now. AT: “I think POS financing is going to be hot for some time. It has been growing hotter over the last year thanks to companies like Affirm and Klarna, but those are not by any means the only companies working in this space. There will be plenty more, and I think many online commerce companies will begin to realize they will have to offer some form of financing to remain competitive. Amazon has led the way in this. Others will follow. It will become the norm, both online and off line, for the next generation.”
Inside Overstock’s financial services strategy. AT: “Overstock is a good example of an online merchant who has taken advantage of their financial strength and available technology to improve access to financial services, including POS loans.”
There is a new millennial-friendly mixed-use development with a high-end steakhouse, movie theater, and hotel. And yes, even a town of 30,000 located more than 500 miles from the closest major metropolitan areas (Salt Lake and Seattle) has an entrepreneurial ecosystem. In fact, in some ways Helena has a startup scene larger cities would be jealous of. A few years ago, SoFi, the online student loan servicer that also provides personal loans and mortgages, contracted with two local programmers to help build their platform.
One of those programmers, David Thompson, is a graduate of the University of Montana-Western, Montana Tech, and the University of Montana. David had no interest in moving to the Bay Area, and successfully convinced SoFi to locate a substantial portion of its engineering team in Helena. Today SoFi is multi-billion-dollar startup, and David is the VP of Engineering, managing more than 100 programmers and engineers out of two locations in Helena.
For the last several decades–and especially over the last few years–we’ve heard a lot about the death of small towns and middle America. However, the success of SoFi and the emerging startup scene in Helena shows the potential for tech companies to be agents of economic revitalization in small towns and cities outside of the coasts.
LendingClub (NYSE: LC), America’s largest online marketplace connecting borrowers and investors, announced that it will report earnings for the fourth quarter of 2017 on Tuesday, February 20, 2018, after market hours. LendingClub will host a conference call to discuss the fourth quarter financial results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on the same day.
A live webcast of the call will be available at under the Events & Presentations menu. To access the call please dial +1 (888) 317-6003 or outside the U.S. +1 (412) 317-6061 with conference ID 8062913 ten minutes prior to 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time).
Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced financial results for the fourth quarter and full year 2017. Elevate has posted its fourth quarter and full year earnings release to its Investor Relations webpage at
Upgrade, Inc. (), a consumer credit platform that combines personal loans with tools that help consumers understand and monitor their credit, announced that it has been named #1 in the personal loans category for the fourth quarter of 2017 by LendingTree.
But research conducted by banks and fintechs has found that many younger Americans are uncomfortable carrying credit card balances, partly because they saw their parents struggle with debt during the financial crisis and prefer the more certain repayment terms of installment loans.
Personal loans issued by banks — these exclude credit cards and auto and home equity loans — hit a record $807 billion at Sept. 30, according to data from the Federal Deposit Insurance Corp., up 9% from two years earlier and nearly 30% since 2012. That’s not even including the many billions of dollars of loans made by upstart online lenders that don’t end up on banks’ balance sheets.
San Francisco-based Affirm originated more than $1 billion in point-of-sale loans last year — and, increasingly, regional banks that are funding the loans, either directly or behind the scenes.
For the past few months, the 19-year-old e-commerce company has been quietly building out FinanceHub, a sort of marketplace for financial services that includes existing Overstock credit cards and insurance products; loans by LendingTree, Prosper and Sofi; a robo-adviser for automated investing, as of last week — and as of Tuesday morning, a discounted trading platform.
Financial-technology firms eager to offer banking products are eyeing a century-old model that fell out of favor during the financial crisis but could see a revival under the Trump administration.
The industrial loan company charter, available in a handful of states and particularly popular in Utah, allows nonfinancial companies to enter the banking sector without being subject to many of its restrictions, including oversight by the Federal Reserve. Companies seeking the charters must still obtain deposit insurance from the Federal Deposit Insurance Corp., which last approved insurance for an industrial loan company in 2008.
According to Forbes, Larsen’s net worth is between $7.5 billion and $8 billion in cryptocurrency, in large part thanks to his massive holding of Ripple—the cryptocurrency he co-founded in 2012.
Larsen, a Stanford M.B.A. and veteran Silicon Valley player, is no stranger to the world of digital finance. Prior to his involvement in cryptocurrency, he co-founded the online mortgage lender E-Loan. The company was valued at $1 billion in 2000. In 2006, he co-founded Prosper Marketplace—the first peer-to-peer lending marketplace in the United States.
Toyota Financial Services (TFS) has launched an evaluation of AI software from Aire to spot customers with higher risks of delinquency.
Aire’s machine learning technology will identify which lessees have entered customer delinquency by skipping a payment, and will give TFS an estimate on how likely they are to default on further instalments.
Aire’s software has already been used by lenders, including p2p lender Zopa, in the initial credit application phase.
Confluent, provider of the streaming platform based on Apache Kafka, today announced 2017 results, which include 4X subscription growth year over year and 98 percent customer satisfaction.
In the 2017 Apache Kafka Report, many companies reported using the distributed streaming platform for more accurate and faster decision making, reduced operating costs, improved customer experiences and reduced risk. 1 in 4 respondents work for organizations with more than $1 billion in annual sales, illustrating how quickly this technology has gained traction across large enterprises. In addition, more than 15% of respondents are processing more than a billion messages a day.
Other 2017 highlights include:
Raised $30 million from Sequoia, Index Ventures and Benchmark to meet global demand for streaming platforms.
Expanded employee base by 120 percent, added numerous offices throughout the US and extended its footprint to six additional countries.
Added new customers around the globe, including Alight Solutions, Capital One, Funding Circle, HomeAway and Nordea Bank.
Announced the general availability of Confluent Cloud, an Apache Kafka as a Service offering that empowers enterprises and developers to move faster with streaming data.
Surpassed 200 partners, including some of the largest Systems Integrators and Platform partners in the industry.
That Radius Bank in Boston would strike another fintech partnership — it announced one Wednesday with the startup Mantl, which is trying to cut down online-account openings to four minutes — is less revealing than its part in Radius’ evolving MO.
When Nathaniel Harley, CEO of Mantl, first visited Radius, he was seeking feedback on a personal financial management technology the company was working on. But he was quickly talked into changing the direction of his company.
The two companies started building an account-opening system for all digital channels in March 2017. They worked to reduce manual entry and other hassles from the account-opening process. Mantl brought in one of its own fintech partners, Alloy, to handle much of the decisions, including anti-money-laundering checks, identity verification and fraud detection. Radius and Mantl used Alloy’s workflow management tool to configure the decision-making process.
Banking rules cannot be rewritten overnight, and so acting Consumer Financial Protection Bureau Director Mick Mulvaney has a tall order remaking the payday loan regulation crafted under his predecessor. But observers say Mulvaney has options for altering the rule to the industry’s favor.
One option would be to refocus the rule on disclosure requirements, which would be several steps short of a repeal but more amenable to lenders than the current CFPB regulation.
The CFPB has issued a request for information that seeks comment on how the agency can best achieve meaningful burden reduction or other improvement in the processes it uses to enforce federal consumer financial law while continuing to meet the CFPB’s statutory objectives and ensuring a fair and transparent process. Comments on the RFI must be received no later than 60 days after the date it is published in the Federal Register, which the CFPB expects to be February 12, 2018.
In the new RFI, the CFPB now seek comment on all aspects of its enforcement processes but lists the following seven topics:
Communication between the CFPB and subjects of investigations, including timing and frequency of such communications and information provided by the CFPB on the status of an investigation
Length of CFPB investigations
Notice and Opportunity to Respond and Advise (NORA) process, including whether the NORA process should be mandatory rather than discretionary and the information contained in letters the CFPB may send to potential subjects of investigations pursuant to the NORA process
Whether subjects of potential enforcement actions should have the right to make an in-person presentation to the CFPB before the CFPB decides whether to initiate legal proceedings
Calculation of civil money penalties, including whether the CFPB should adopt a civil penalty matrix
Standard provisions in CFPB consent orders
Manner and extent to which the CFPB can and should coordinate enforcement activity with other federal and/or state agencies with overlapping jurisdiction
Altegris, an alternative investment research and management firm, and Artivest, an alternative investment technology firm, announced today that they plan to merge under the name Artivest, pending customary corporate and regulatory conditions to closing. The joint 100-person team will service over $3 billion in client capital—immediately becoming the largest independent alternative investment technology and solutions firm for wealth managers, fund managers, and independent advisors.
Taking a next step in its mission toprovide liquidity to private growth companies,SharesPost today announced the launch of its Digital Securities Group.
The Digital Securities Group will bring security token issuers and investors into the SharesPost private marketplace. Token issuers and investors will use SharesPost’s existing Alternative Trading System to invest in ICO’s and trade in digital securities in compliance with U.S. securities laws.
Homeowners soon will be able to count income they earn from Airbnb Inc. rentals on applications for refinance loans.
A new program — expected to be announced on Thursday by Airbnb, mortgage giant Fannie Mae and three big lenders — will allow anyone who has rented out property on Airbnb for a year or longer to count some or all of that money as income.
In 2018 the SEC’s Office of Compliance Inspections and Examinations plans to pay closer attention to matters involving retail investors, particularly when it comes to disclosures, and zero in on cryptocurrencies, initial coin offerings and secondary market trading, the regulator says in a press release.
The regulator will also continue monitoring digital advice platforms, with a special focus on their compliance programs, including algorithm oversight, investor data protection and disclosures of conflicts of interest, according to the exam priorities. The SEC has made progress in the ratio of investment advisors it examines each year, from just 8% five years ago to 15% in fiscal year 2017, the regulator says. In 2018, the SEC plans to target those advisors it has never examined before, according to the regulator.
LD Holdings Group, LLC, parent company of loanDepot, the nation’s fifth largest retail lender, today appointed top real estate executive Chris Heller to head its recently-launched mello Home business. Combining digital simplicity and smart local advice, mello Home seamlessly connects home buying, financing, and improvement services into a single consumer experience.
It was through the work of the P2PFA, led by Christine Farnish, that these regulations were sensible and promoted the growth of the industry there. And while this initial regulatory framework is currently being reviewed by the FCA, today, the UK is one of the most competitive markets in the world in no small part because of these initial regulations.
Paul Smee brings more than 17 years experience in leading trade bodies in the UK. Previously, he was Director General of the Council of Mortgage Lenders for six years so he comes with experience leading finance trade bodies. He looks like a great choice to take over from Christine.
Lendy, one of Europe’s leading P2P secured property platforms, is pleased to announce the appointment of Andrew Wawrzyniak as its new head of finance. Andrew was previously head of finance at Fund Partners, a leading fund manager, which specialises in the operation of collective investment schemes.
RegTek.Solutions, the market-leading control and compliance software provider for global trade and transaction reporting, has appointed Rob Bernstein as chief financial officer (CFO).
PEER-TO-PEER business lender Rebuildingsociety has secured an agreement with Leeds City Council whereby the local authority funds loans through its platform.
The council will review business loan requests from companies with an LS postcode prefix, consider the industry and location of the company, and contribute to the loan amounts required by suitable applicants.
According to Robo.cash, P2P lending is turning to a significant source of additional income for the growing number of the European investors.
The online lending platform also confirmed:
“The majority of investors are in the age groups: 25-34 years — 40%, 35-44 years — 31%, 45-60 years — 20%. The less number is the age of 18-24 years (6%) and 61 plus (3%). These figures are supported by the employment of investors: employees — 72%, entrepreneurs — 15%, students — 6%, retiree — 2%. At the same time, the most investors are just getting acquainted with P2P-services (52%) and the comparable number already has at least one-year practice: 1-3 years — 34% and over 4 years — 13%.”
The country has been actively promoting itself as gateway destination to the European marketplace for non-EU firms and British startups fleeing Brexit. Registering a company takes merely three days, while getting a Payment Institution or Electronic Money Institution license takes only three months, two-to-three times faster than in other EU jurisdictions. Other perks include remote Know Your Customer (KYC) procedures, low profit tax, startup visa options and a sandbox regime for fintech startups in their first year.
The country also boasts a growing talent pool of up to 31,000 trained IT professionals with a further 8000 in the pipeline.
This week, Invest Lithuania released the Lithuania Fintech Report 2017, which revealed that a total of 117 fintech companies were operating in the country in 2017, with 35 of them being registered last year.
IOU FINANCIAL INC. (“IOU” or “the Company”; TSX-V:IOU), an online lender to small businesses (IOUFinancial.com), is pleased to announce a strategic partnership with Marietta, GA-based c-store solutions provider goEBT (goEBT.com). Through this strategic partnership, goEBT’s network of 25,000 convenience store owners nationwide will be able to access IOU’s fast, convenient, non-collateral funding solutions.
Our companies come together united by the common vision of providing financial inclusion for more than one billion new and underserved individuals across the globe. We will together provide a suite of credit scoring and identity verification products to more than 20 emerging markets.
Our companies have individually facilitated over 5 million credit assessments since inception, allowing more than 50 financial institutions to disburse over $2 billion USD in credit to people with limited information.
The first joint product offering is already live in Asia and Latin America, with additional products and features scheduled for release in the coming months.
Terry Gou, the billionaire chief of Taiwanese electronics giant Foxconn, is said to have invested in a cryptocurrency merchant bank being set up by Mike Novogratz, a former Wall Street macro hedge fund manager.
Citing a source familiar with the matter, Bloomberg reported that Novogratz has raised about US$250 million for his cryptocurrency merchant bank venture through a private placement.
The government might consider giving tax rebates to merchants accepting payments digitally in order to promote the overall fintech sector, which is at its infancy at present but growing at a rapid pace, suggested the Reserve Bank of India.
Talking about the fintech sector the RBI has identified tech startups working in the space of peer-to-peer lending, blockchain, big data, smart contracts, robo advisors and online aggregators.
Traditionally, one’s option was limited to getting an education loan from a public sector bank. Now that the demographics are favourable and the education loan market has the potential to grow, non-banking finance companies (NBFCs), fintech players and peer-to-peer (P2P) lenders are jockeying for a piece of the market.
Seek more funding: Education loans are part of the priority lending category, but unlike the US, there is no provision for student loan waiver in India. It means your loan will not go away until you pay it off. Try and find out if there is any other source of funding available, including financial aid, bursary and scholarship or upfront savings, which will bring down the loan amount.
What Banks Offer
Most of them offer education loans for studying medicine, engineering or management at graduate and post-graduate levels or for pursuing further studies in India and abroad. Some also provide categorised loans. For instance, State Bank of India (SBI) offers Scholar Loan for students who get admitted to premier institutions like IITs, IIMs, NITs and AIIMS, and a Global Ed-Vantage loan for studying in global counterparts. Bank of Baroda offers Baroda Scholar loan for studying abroad and Baroda Gyan loan for higher studies in India while separate schemes are available for courses conducted by the country’s top institutions.
Landing an education loan may not be easy anymore, given the spurt in defaults. And that is where the new-age fintech firms and P2P lenders see a lucrative opportunity. “For those who fail to qualify for education loans from banks and NBFCs, P2P lending platforms can be an alternative way to borrow,” says Gaurav Aggarwal, Associate Director, Unsecured Loans, at Paisabazaar. In other words, aspiring students can raise personal loans from banks or fintech players like MoneyTap and LoanTap, or P2P lenders like Faircent and CreditMantri to cover their educational expenses.
To understand what lies ahead for India’s fintech sector, it makes sense to understand the fintech growth is expected to boom in the Asia Pacific region. A Frost & Sullivan report predicts that the region is expected to grow at a CAGR of 72.5% from 2015 to 2020, reaching US$72 billion.
According to Quah Mei Lee, Industry Principal, ICT, Asia-Pacific, the mobile payments market in Singapore was estimated to be worth US$1.4 billion in 2017. The market is still small but is growing fast.
Indian digital payments industry is expected to reach $700 billion by 2022 in terms of value of transactions.
It is expected that more than 80% of the urban population in India will adopt digital payments as a part of their routine by 2022, and 70% of the retail chains will adopt the same.
Enter IOU Financial. As “online lending” has become a 21st century reality, a financial niche has sprung up with online lending institutions that are prepared to cater to small businesses and provide badly needed capital, efficiently and affordably.
Compared to the above, IOU Financial provides easily manageable, working capital term loans for small business, and does so:
The speed of IOU’s loan application process is a big draw for small business owners. IOU’s application generally takes roughly three to five minutes to complete.
OnDeck (NYSE: ONDK), the online lender to small businesses, today announced that Grounded Kitchen & Coffeehouse, owned by Amir Rahim, has been selected as the OnDeck Small Business of the Month for February, 2018. The Ottawa-based restaurant is the first small business in Canada to earn the OnDeck spotlight award.
So assuming I have $1000.00 I have no use for and would want to make a little interest on, All I have to do is go unto one of these platforms to match me with someone in need of $1000.00. These platforms because of the high risk they take (borrowers don’t provide tangible collaterals) usually charge higher interest and in return given higher interest to lenders than Treasury Bills will normally do. This idea is supposed to be easy and help people financially as there is gap between loans needed and financial institutions willing to give (“The two largest peer-to-peer (P2P) lending platforms, Prosper and LendingClub founded in 2005 and 2006 respectively, have originated over $6 Billion in loans to date. Although they have only begun to scratch the surface of the $3 trillion consumer debt market” Nav Athwal Cofounder and CEO of RealtyShares, a crowdfunding for real estate platform). Yet like most good things miscreants, hooligans and hoodlums find a way to make the system corrupt.
These swindlers promise up to a 100% interest rates within 5 working days. So they lure greedy but naïve people to roll in cash through mobile money. With a Minimal amount of GHC100.00 you get registered and paired with another person. You’re required to send the money to this person who they claim registered 5 days ago and the said day is the day of maturity.
Ways to spot financial scams and Ponzi schemes
1. If your interest is too good to be true, then its probably a lie. When you’re being offered an interest bigger than the T Bills in lending you should be wary and do due diligence.
2. They usually don’t tell the project in which your money will be invested.
3. Pressurised to respond quickly? 4. Are the contact details vague?
News Comments Today’s main news: SoFi completes $960.2M student loan securitization. Robinhood adds zero-fee crypto trading, tracking. Goldman partners with Cadre. South Korea earmarks 11.2T won for midrange borrowers. Today’s main analysis: Buying overdue loans at discount on Mintos’ secondary market. Today’s thought-provoking articles: What RateSetter will look like without unsecured commercial loans. AltFi Data predicts strong U.S. MPL […]
Robinhood adds zero-fee cryptocurrency trading, tracking. AT: “This is a direct attack on Coinbase, looks like. But I wonder how long the zero-fee will last. It could be a marketing tactic to get new customers with plans to add a fee on later. Nothing wrong with that, but I hope, if true, the fee is lower than Coinbase’s. The competition can only be good for investors.”
Online lender SoFi announced on Thursday the closing of its $960.2 million offering of SoFi Professional Loan Program 2018-A Notes (SoFi 2018-A). According to the lending platform, the offering reflects underlying collateral of more than $1billion in student loans and is SoFi’s largest ever securitization, as well as the first by any fintech lender to reach the billion-dollar collateral mark.
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-1 (“SCLP 2018-1”). This is a $591.5 million consumer loan ABS transaction.
Preliminary Ratings Assigned: SoFi Consumer Loan Program 2018-1
And the reason that departure could make me better off is that I invested in SoFi in December 2014 when the company was valued at $1 billion. The last time SoFi raised money – in 2017 – it was valued at $4.3 billion.
SoFi started out targeting the $1.2 trillion student loan industry and in 2014 announced an expansion into the $12 trillion mortgage market.
2. Its management team had excellent industry knowledge
3. It knew what ailed stakeholders and provided a remedy
Of the 15,500 borrowers who had taken out about $1.3 billion worth of loans in 2014, SoFi estimated that it had saved the average borrower $11,783.
4, It looked like it could reach $100 million in revenue
In November 2017, Bloomberg reported that in the third quarter of 2017 SoFi’s adjusted operating revenue rose 8.2% to $145.3 million in the third quarter while its adjusted earnings totaled $56.1 million.
Moreover, SoFi added 55,000 members in the quarter to a total of 400,000 – having completed “more than $3.52 billion in loans in the period and completed three securities offerings totaling more than $1.5 billion,” according to Bloomberg.
He points to the $12.9 billion in loan originations SoFi did last year. The company sold more than $2 billion of those loans.
“All our investors are still buying, and we’ve added many new investors post Mike leaving,” Jain said. “All our lenders continue to lend to us and they’ve shown interest in lending us more. In the face of adversity, we did all we could.”
If you took out a federal Parent PLUS Loan, you could face interest rates as high as 7.00%.
Low interest rates – Depending on your credit score and income, you could qualify for a much lower rate with SoFi than you would with a federal student loan. SoFi student loans have fixed interest rates as low as 3.25% and variable rates as low as 2.58%.
No origination or application fees – For borrowers who received their loans after October 2017, that fee is 4.264 percent of your loan amount. On a $10,000 loan, that means you’ll have to pay a fee of $426.40, adding to the cost of your child’s education.
Member discounts – If you have a SoFi parent student loan and go on to take out a personal loan, mortgage, or another student loan with the company, you’ll receive a 0.125 percent interest rate discount on the new debt.
The Department of Education plans to provide students with a prepaid card that would hold surplus loan money that is not needed for tuition, giving the government and financial services providers a firsthand look at how students are spending those dollars.
No-commission stock trading app Robinhood will let you buy and sell Bitcoin and Ethereum without any added transaction fees starting in February, compared to Coinbase’s 1.5 to 4 percent fees in the US. And as of today Robinhood will let all users track the price, news, and set alerts on those and 14 other top crypto coins, including Litecoin and Ripple.
Goldman’s strategic investments group, which makes venture-capital-like investments, now owns 80 portfolio companies. One such company is Cadre, a fintech company involved in online commercial real estate investing that Goldman funded in its Series B, C, and D funding rounds. The start-up, which happens to be led by some Goldman alumni, also just received a $250 million investment from Goldman’s private wealth clients.
Cadre also charges its LPs less than a typical private real estate fund. These funds usually charge a management fee, often around 1.5%, as well as a 20% cut of the profits above an 8% “preferred” return to LPs. On Cadre’s website, it advertises a 1% “transaction fee” (I assume that’s based on a per-deal fee, like a broker would get) and then a similar 1.5% management fee, but no incentive fee. Cadre claims this fee structure will increase investors’ invested rate of return by over 2% compared with a typical fund, all other factors being equal.
The new leadership has taken over at a time when consumers are struggling with credit-card, auto loan and student loan debt. They’re also worried about their personal data, after a 2017 breach at the credit reporting agency EquifaxEFX, +0.81% exposed personal information of more than 145 million U.S. adults, including their Social Security numbers and financial accounts.
Mulvaney requested zero dollars for his second-quarter budget
The bureau already had $177 million in reserves, enough to cover the $145 million the bureau projected it would need during the second quarter, he said.
The Consumer Financial Protection Bureau today finalized changes to its final rule on prepaid products, including an overall delay of the rule’s effective date until April 1, 2019 – an extension long sought by the American Bankers Association. The bureau also made changes meant to boost compliance with the rule and loosen rules on linking credit cards to prepaid accounts or “virtual wallets”.
The rule requires companies to disclose fees on prepaid cards and cooperate with consumers who discover unauthorized charges or errors.
NREI: More specifically, what’s your take on how publicly-traded REITs will perform this year? Will 2018 be better overall than 2017?
Aaron Halfacre: In 2017, publicly-traded REIT performance was anemic relative to the S&P 500. I think that can be largely attributed to a few factors: big demand for large-cap “infotech” names driving the broader market, a meaningful sell-off in retail REITs and general market hesitation on REITs in front of the tax bill and Fed decisions. On a relative basis, publicly-traded REITs are well-positioned in 2018, not only from the fundamentals picture, but from a value perspective.
NREI: What about non-traded REITs?
Aaron Halfacre: I think 2018 could be as strong, or stronger, than what we saw in 2017. Personally, I am excited about the industry changes in the non-traded REIT space. It is a good thing to see Blackstone and Starwood entering the space while some of the traditional fee-hungry shops have bowed out—a good advocacy trend for the individual retail investor. Institutional-grade real estate choices without the… fee structures of yesteryear, combined with greater valuation transparency and an investment that is not correlated to the broader equity market — that’s a positive story for all of us who aren’t part of the 1 percent.
Bessant is transforming B of A into a technology firm and leading it into a future that requires humans to apply immense computing power to immense amounts of data — an artificial intelligence future. But like any every other technology executive, she’s facing a shortage of talent with science, technology, engineering and math backgrounds. The result is often departments hiring from other departments.
Bank of America will spend $600 million this year on cyber defense alone. It employs 1,200 people whose jobs are dedicated to nothing else but information security, although the company makes that “the job of every single employee,” Bessant said. But the caliber of the talent the bank hires is just as important as the technology it invests in, since they’ll be the ones that determine how to work responsibly with AI.
All of Volvo Car Financial Services’ loan and lease originations end up on Bank of America’s balance sheet, Hollodick explained, including subscriptions to Care by Volvo, which starts at $600 a month for an XC40 compact crossover.
Although alternative credit remains a murky, unfamiliar concept to some, its adoption is slowly but steadily spreading. Some sectors may be particularly well-positioned to benefit from its use, and businesses under those umbrellas should consider adopting them if they haven’t yet done so.
Rally Rd., A marketplace for making investments in collector cars the same way you buy & sell stock, announced that it has raised a $2.6 million seed round investment from leading venture capital firms and individual investors.
When Ray Laureano and his wife graduated from college, they left school with a staggering amount of student loans. Between the two of them, they were over $200,000 in debt.
Ray and his wife paid off over $70,000 in just one year.
A radical debt repayment strategy
Instead, he talked to each loan servicer and entered the lower-interest loans into forbearance; in other words, he paused payments on those loans.
With his other debt payments on hold, he put all of his extra money toward just one loan with the highest interest rate. When that loan was fully paid off, he tackled the next highest-interest debt, and so on.
Ray estimates that they will be debt-free by March 2020.
Data intelligence and advancements in communications technologies are helping financial institutions dramatically improve the customer self-service experience. Enacomm, Inc., a leading provider of intelligent interactions and customer authentication technologies for banks, credit unions and credit card companies, today announced a new partnership with Telvoyant, a premier telecom consulting firm providing comprehensive telecom solutions for business, non-profit organizations and government institutions. Through a reseller agreement between the two companies, Telvoyant’s bank and credit union customers will be able to take advantage of Enacomm’s VPA (Virtual Personal Assistant) banking and the Enacomm Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.
Consumer loans still make up the lion’s share of RateSetter’s £2.2bn loan book, while its commercial arm – both secured and unsecured – makes up 9.8 per cent, equating to £223.4m.
Of 2,213 commercial loans in total, including those that have been paid and repaid, 1,622 were unsecured and 591 secured as of the end of last year.
But its secured loans tend to be larger. 42.5 per cent of the value of RateSetter’s commercial loan book are listed as unsecured. This represents £95.1m worth of unsecured business loans compared with £128.2m of secured business loans.
The not-for-profit Federation of Small Businesses (FSB) has been a vocal proponent of faster SMB payment times, greater access to more robust banking services and tighter regulation in support of small businesses across the U.K. Most recently, the FSB announced plans to join the alternative finance world and establish the FSB Funding Platform, a marketplace lending portal through which small businesses can access funding from more than 100 lenders.
The FSB’s own research on small business finance, outlined in its Q4 FSB Voice of Small Business Index, found that fewer SMBs were concerned about their access to finance in Q4 2017 than they were in the same quarter of 2016. For the first time since Q1 2012, the FSB’s credit availability index has surpassed its credit affordability index.
And yet, according to the report, small business confidence fell into negative territory, with 73 percent of SMBs reporting a rise in the cost of doing business.
Digital Risks, an insurtech startup launched in 2014, focuses solely on providing insurance to startups working in the digital, media and tech space.
“We insure things like challenger banks, peer-to-peer lending, payments, medtech, teleadvice, fraud detection, cyber security software, and sharing economy businesses,” Rose adds. “The general focus is around technology.”
Digital Risks doesn’t provide insurance itself – rather, it acts as a broker between companies and a group of about 20 different underwriters.
Today, leading data analytics provider for marketplace lending, AltFiData, released the total origination numbers for the UK, Europe and the USA. They are predicting solid growth for the industry in all three regions in 2018. The new loan volume for the USA in 2018 is expected be $38.9 billion, a year on year increase of 46%.
Still, I think 46% growth is a little on the high side for the four companies covered here but I expect we will get close to those numbers. Interestingly, AltFiData is expecting the UK industry to grow at 43%, slightlty slower than the USA, and Continental Europe to grow at 73% off a much smaller base.
I get a result of 349 loans with various discounts and an YTM of up to 14%. Not surprising for me, many of the loans listed at the top are Mogo loans.
If these loans do pay up and then run till regular maturity date, then he recieves a yield of 12.4% to 13.8%. Decent, but not very high compared to other Mintos loans.
However there is a chance of at least 50% that these loans will default and are bought back within the next 30 days. If that happens to a loan, that a buyer bought at 0.3% discount, it will boost his yield very roughly by more 3.6% (0.3% for 30 days multiplied by 12 to get annual effect). Likely it is more because the next payment date will be less than 30 days away. But even taking 3.6% the yield will be around 17%.
The loan with the 0.6% discount would mean a boost of very rougly 7.2% yield on top (0.6*12). So that could lead to about 20% yield.
Growing portion of new investments in China and India
Increased participation from mutual funds, hedge funds, and banks in the VC market
In 2017, a lot of major startups such as Cloudera, China Rapid Finance, and Okta came up with IPOs. Most of the companies issuing IPOs were technology-focused and were software and cloud service providers.
During the forecast period, the Americas was the leading venture capital investment market with a market share of more than 56%, with the US being the leading country in the region.
Equity crowdfunding has also become legal in countries like United Kingdom, France, Austria, Germany, Netherlands, Australia, Hong Kong and the U.S. with President Obama legalizing the equity crowdfunding by signing the JOBS Act into law.
The Crowdfunding statistics for 2017 reports a global amount raised for $34 billion, broken into $25 billion through peer-to-peer lending, $5.5 billion through reward and donation and $2.5 billion through equity crowdfunding. The projection of the crowdfunding industry is expected to grow over $300 billion by 2025.
This week the big banks got more bad press when the corporate regulator ASIC declared that their huge networks of financial advisers were failing to operate in the best interests of their customers.
The report, which covered the financial advice arms of the Commonwealth Bank, Westpac, ANZ, NAB and AMP, found that an astonishing 75 per cent of advice provided was not in the best interests of customers.
And in 10 per cent of cases, consumers were actually worse off than they would have been if they hadn’t got advice.
After payments, digital lending as a space is at the vanguard of innovations, driven by a clutch of startups seeking to take formal lending to a customer segment that never got easy credit from banks.
From a digital EMI card to instant personal loans and a line-of-credit product, new-age disruptors such as Stashfin, Kissht, and Antworks, along with their established peers Paysense and Moneytap, are trying to generate traction through innovative lending products. Mumbai-based Kissht is financing consumption requirements of low-income households with a digital EMI card that can be used to make payments directly.
“There are around 40 online merchant partners and 2,000 points of presence accepting the Kissht EMI card across businesses like electronic stores, furniture shops and others,” said Krishnan Vishwanathan, chief executive of Kissht. Another Delhi-based startup, Stashfin, is also targeting consumers with income levels between ?20,000 and 1 lakh per month.
South Korea’s Financial Services Commission said Thursday it plans to circulate a combined 11.2 trillion won ($10.6 billion) this year for local retail borrowers that hold midrange credit scores while having trouble finding corresponding loans.
The FSC pledged to pour a combined 8 trillion won into state-run loan products sold at banks, including those designed for refinancing. The remaining 3.2 trillion won will be spent to encourage private banking institutions to develop and sell midrange loan products this year, and the volume of support is expected to gradually increase, according to the plans.
By 2022, the government’s annual financial support for five commercial banking groups — Shinhan, KB, KEB Hana, NH and Woori — will increase by 2.5 times to 2.4 trillion won from 2017, according to the plans. Direct banks Kakao Bank and K Bank received 900 billion won in 2017, and the volume will increase by 3.5 times to 3.1 trillion won in 2022.
SelfKey, a blockchain-based digital identity firm, has obtained a Mauritius’ Regulatory Sandbox License (RSL), according to information provided by the company. This license will allow SelfKey to develop their self-sovereign digital identity wallet and financial services marketplace under supervision and scrutiny of the Board of Investment of Mauritius.
News Comments Today’s main news: More LendingClub-IEG drama.Black Fish raises $145M.Moneygram partners with Ripple.Kreditech expands into India with Mambu. Today’s main analysis: JP Morgan Chase’s investments into digital technology.Is Yirendai undervalued? Today’s thought-provoking articles: Investors go into debt to buy bitcoin.Small business financing trends.How open banking could change how people manage money.Banks, trade finance, and […]
JP Morgan Chase teardown on digital technology. AT: “Besides Goldman Sachs and Citi, no other big bank is investing in digital technology like JP Morgan Chase. Whether their investments will make them a strong competitor in digital banking remains to be seen, but this is one area–at least, in the U.S.–that desires way more exploration and focus than it’s getting.”
Lending Club has all kinds of problems: a history of profit warnings, faint traces of scandal after a management upheaval almost two years ago, and a share price still more than 80 per cent adrift from its peak.
Add to that list: a bizarre, crypto-fuelled activist campaign waged by a Las Vegas-based payday lender called Paul Mathieson, who told authorities in his native Australia that he fled to America in 2008 because he feared being killed by a mobster.
Mathieson’s case for change at Lending Club, laid out in a letter to the company’s board on 2 January, is not a terrible one, on the face of it. He argues that the cost structure at the loss-making company, a pioneer in peer-to-peer lending, is “excessive,” noting fancy headquarters in San Francisco and “hundreds” of “excess” developers. He says that the board should consider a pivot to using its own balance sheet to lend, rather than acting as a broker, taking fees for matching borrowers with lenders. Underwriting has been sloppy, he says, resulting in sub-par returns to investors.
Mathieson is offering 13 shares in his own penny-stock company, IEG Holdings, for every share in Lending Club. At the time of the offer on Monday morning, that was a premium of 19 cents, or about 5 per cent.
IEG Holdings Corporation (OTCQB: IEGH) provides online unsecured consumer loans under the brand name “Mr. Amazing Loans” via its website, www.mramazingloans.com, in 20 US states. The company offers $5,000 and $10,000 personal loans over a five-year term at rates ranging from 19.9% to 29.9% APR. IEG Holdings plans future expansion to a total of 25 US states, which would cover 240mn people and represent approximately 75% of the US population.
Since 2013, IEGH has obtained additional state lending licenses, and they are licensed and originating direct consumer loans in 20 states including: Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. The Company was founded in 2010 and is headquartered in Las Vegas, Nevada.
IEG Holdings Plans to Create its own IEGH Crypto/Blockchain Currency Backed by Gold Metal and SEC Registration as a Security
IEGH announced that its wholly owned subsidiary, Investment Evolution Crypto, LLC (“Crypto”), is negotiating to purchase a gold project with gold metal in the ground and prospecting licenses. IEG Holdings plans to utilize a gold resource to investigate creating, through Crypto, and a joint venture with Investment Evolution Corporation, also a wholly owned subsidiary of IEG Holdings, its own gold metal-backed crypto/blockchain currency, and potentially offer loans and accept loan repayments in its own crypto/blockchain currency.
IEGH increases loan originations
The company stated that it provided $960,000 in new consumer loans through its online property mramazingloans.com, from the October 2017 to December 2017 period. This represented a 12.3% increase over its July to September 2017 operating period, during which the company’s new loan originations were $855,000.
Roughly 18 percent of people who buy bitcoin use a credit card to do so, according to a new survey by loan marketplace LendEDU. Of those, 20 percent have not paid off their balance. The phrase “buy bitcoin with credit” has been trending on Google for weeks.
Another problem with going into debt for cryptocurrencies is that people will have to pay back their debt before they see sufficient returns, said Erika Safran, founder of Safran Wealth Advisors. That may require tapping other resources, potentially creating further financial trouble.
Traditional bank loan rejections are notoriously high in all markets
Small Business Administration (and equivalent agencies) are nefarious for overextending the time-to-credit tolerances of small businesses
Volatility of markets, and exposure of almost all markets to disruption by startups could pose urgent cash needs for businesses, which are generally not considered for loan applications by traditional lenders.
Online Lending And Its Deepening Hold Over The Small Business Finance Market
In 2014, a Federal Reserve (US) survey concluded that one in five small business owners opted for loans from online lenders. Since then, the proliferation of online lending platforms has been on the surge, to the extent that traditional brick and mortar lending institutions have also had to move base to the online domain. In the coming years, multiple factors will result in the success and sustainability of online lending platforms. These include:
Growing confidence among small business owners to trust online lending platforms
Availability of cheaper, quicker, and more convenient loans
Options to truly personalize and customize the loan repayment terms to suit the business’ interests
The Call for Transparency in the Online Lending Market
Though the online lending market has been growing year on year, this doesn’t detract from the concerns around lack of transparency in the way some of these platforms operate. Some of the key concerns are around undisclosed APRs and hidden fees. In fact, some online lenders have been castigated for charging significantly high rates of interests from borrowers, often with service quality issues post-approval. Thankfully, there’s already some progress towards bringing a degree of regulation in place for online lending platforms to be at par with traditional lending regulations.
JPMorgan is making a bigger push into payments technology as digital banking becomes a strategic priority.
In 2016, the bank spent $9.5B on technology and Dimon has committed $300M alone to improve JPMorgan’s technology for its asset management products. Relative to its peer group, JPM claims the highest number of mobile banking customers and its Chase Mobile app currently sports a 4.7 (out of 5) rating in the App Store.
Earnings call analysis – Barclays, Bank of America, Morgan Stanley talking up digitization
JPM discussed continued digital consumer banking growth, which grew 6% in Q3’17.
Bank of America spent portions of its Q1’17 and Q3’17 talking about digital banking initiatives and technology investment. Specifically, CEO Brian Moynihan mentioned the bank spent $2.25B on technology initiatives in the first three quarters of 2017. The bank also now sees mobile devices account for 1 of every 5 deposit transactions.
On Morgan Stanley’s Q3’17 earnings call, Morgan Stanley CFO Jonathan Pruzan mentioned the bank is beta testing new customer-facing digital products it plans to launch, potentially in the robo-advisory space. Specifically, Pruzan noted: “When we think about our wealth business, it’s a business that’s built on scale. And it’s built on the fact that people with wealth want personal advice. So it’s going to be both a mix of technology and digital with the personal element of the advice channel. And we think that’s the winning formula going forward.”
Based on the data, JPMorgan ranks ahead of most bulge bracket banks when it comes to overall fintech investment since 2013, but behind its peers Goldman Sachs and Citi.
The Rise Fund, a private investment firm co-founded by the U2 lead singer, is making its first known bet on a fintech business by backing Acorns Grow Inc., said people familiar with the matter, who asked not to be identified because the details are private.
Oportun, a community development financial institution that provides small loans to individuals with little or no credit history, is planning to open 20 lending offices in Florida.
The Redwood City, Calif.-based lender said this week that it has already opened four offices in Miami and Hialeah and that it expects to add 16 more in the Sunshine State, primarily in South Florida, by the end of the year.
Convergence of Software and Financial Products One of the important lessons that Square taught the market is that bundles of software solutions (loyalty, POS, analytics, scheduling and many others) and lending are essential drivers in advancing growth of payment processing.
The Power of the Machines Companies like LendingClub are using machines to discover new relationships and patterns to introduce more tailored financial offers to their customers.
Emerging Economies Many growing companies in Africa, Asia, and Latin America are developing and adopting financial solutions, often faster and with more innovation than in developed economies.
The Internet giant is finally putting its many payments capabilities — Google Wallet, Android Pay and Pay with Google — under a single name, Google Pay, after lagging for years behind Apple Pay and Samsung Pay.
Fifth Third Bancorp has received top marks from the Federal Reserve on its most recent Community Reinvestment Act examination as expected.
Fifth Third announced the results on Wednesday, saying in a press release that the Fed gave it an “outstanding” rating on its most recent exam. The Cincinnati company had said in a regulatory filing last month that it expected to ace the test, which covered the period between Jan. 1, 2014, and June 30, 2016.
Roofstock (www.roofstock.com), the leading online marketplace for buying and selling leased single-family rental homes, today announced the strategic hire of Suresh Srinivasan as chief marketing officer. Srinivasan has 20 years’ experience leading marketing, product, and e-commerce functions at Fortune 500 and high-growth tech startups. Most recently serving as the SVP of Marketing for Xome, Srinivasan brings a deep understanding of the fast-growing real estate technology sector to Roofstock where he will be responsible for accelerating growth of Roofstock’s marketplace for single-family rental homes and developing the company’s partnership network.
Regulators in Europe and the UK are ordering banks and credit card companies to share customer data with other companies if their customers agree. The companies will also be able to carry out payments on a customers’ behalf.
Open Banking forces lenders to offer a digital “fire hose” of data that any third party can use to get standardised access — provided the startup is registered with the UK Financial Conduct Authority (FCA) and the customer agrees to share their data. They won’t have to negotiate deals with banks, just plug into their digital systems and go.
The aim of Opening Banking is to give customers greater control over their data and to encourage account switching.
ThinCats says 2018 is poised for growth. The online lender reports that December was a record month booking £12 million of funding listed on the platform followed the biggest-ever ThinCats-listed loan of £6.7 million to the Chelsea Yacht & Boat Company at the end of September.
Loan Store is the responsible lending hub that reveals to reduce the interest rates on instant cash loans for the UK people.
Hennery Dicosta, a senior adviser of Loan Store, has offered the complete details about this announcement. This is what he said- In a recent scenario, people usually try to borrow a small loan amount. That is why we have decided to provide the loans for bad credit people with no guarantor and no fees on an instant decision to resolve their short term emergencies. We never charge any processing fee and we are now providing these loans on quite low rates of interest. Besides, we do not judge the creditworthiness of the borrowers with their credit rating and give an instant decision on their loan request.
With that in mind, we asked three Motley Fool investors to each profile a company that has a low valuation now compared to its earnings-growth potential. They identified Yirendai (NYSE:YRD), Criteo S.A.(NASDAQ:CRTO), and Changyou.com (NASDAQ:CYOU) as strong contenders trading at attractive discounts.
China’s first P2P online lending platform
The Chinese P2P lending market blossomed in the late 2000s, catering to customers who were underserved by traditional banks, and is worth about $60 billion today.
Analysts expect Yirendai’s revenue and earnings to rise 74% and 14% respectively this year, followed by 43% revenue growth and 41% earnings growth next year. Yet the stock trades at just 14 times earnings, compared to an industry average of 26 for credit service providers. Based on those numbers, Yirendai looks likely an undervalued growth stock.
First, Yirendai is a subprime lender. Just 1.7% of its loans were rated as prime “Grade A” last quarter. Another 8.7% were Grade B, and 14.1% were Grade C — but 75.5% were rated Grade D. Yirendai collects higher fees from lower rated borrowers, but its business could collapse if its delinquency rates rise.
The company only discloses delinquency rates for loans past due by 15 to 89 days, and that rate came in at a low 1.8% last quarter. But it doesn’t report any data on loans delinquent for over 90 days.
Black Fish, a consumer finance platform based in China’s Nanjing region, has received $145 million in a series A round from a cluster of firms including Lightspeed China Partners and Shanghai and Kuala Lumpur based Gobi Partners.
Others who participated in the round include Morningside Venture Capital, JAFCO Asia, Fullcent Capital and Zhang Tao, founder of Dianping.com.
At this point, the average annual growth rate of consumer finance is 16.4 percent.
Renren holds a significant investment portfolio that is easily worth $12 per share. This value will likely be realized in the near term due to multiple catalysts.
The company has started to get involved with blockchain-related businesses, which potentially turns them into a “blockchain play”.
This situation leads to an asymmetrical payoff structure in which there is very little downside and significant upside. My target price is $18.
Renren was an early VC investor in Sofi, taking part in its seed round of financing as well as a later follow-on round. They currently hold a 13% stake in SoFi, having sold 14.1% of their holdings (representing 2% of SoFi) in April 2017 for $92 million.
Dianrong and the Dalian Finance Development Bureau and Dalian Finance Industry Investment Group (DFIIG) recently signed a strategic cooperation agreement to drive financial innovation in Dalian and across China. According to the agreement, Dianrong will develop a series of specific projects in partnership with the Dalian government, including:
Assist the Dalian Finance Development Bureau in creating a financial technology (fintech)cloud platform to provide fintech capabilities for small loan and guarantee companies, and other small and medium-sized financial institutions in the region and at large. Tools and services will include sophisticated fraud detection, big-data risk management tools, payment channel integration, and compliance reporting. The fintech cloud platform will also provide regulators with easier monitoring of local lending activities and trends in an ongoing and comprehensive way, helping them provide timely policy guidance and support on risk management.
Work with DFIIG to establish a special Internet finance investment fund for Dalian. The fund will focus on investment in fintech projects and startups with the potential to strengthen Dalian’s new economy and financial services industry.
Develop a supply-chain trading platform in Dalian utilizing advanced fintech and blockchain capabilities to help more small and medium-sized suppliers secure needed funding. Last year, Dianrong created the first blockchain platform for supply-chain finance with FoxConn Group, a global leader in consumer electronics.
Shanghai is one of China’s largest financial markets by market trading volume. In 2017, its trading volume was 1,438 trillion yuan ($220.9 trillion).
Shanghai has already launched a campaign against fraud and illegal behavior in financial consumer markets, such as internet-based peer-to-peer lending, cash loans to college students, and pay-day loans.
Germany’s Rocket Internet needs to hold on to its mountain of cash so it can compete with rivals from the United States and China and pounce when investment opportunities arise, the chief executive said in an interview.
Rocket is invested in more than 100 start-ups, including in financial and property tech, logistics and travel sites, with its stakes in the five biggest of them potentially worth more than 1 billion euros to Rocket, according to Berenberg bank.
Non-financial institution competitors are aggressively targeting this market, using innovations such as blockchain to develop products and tools that not only replace outdated paper and manual-based processes, but also deliver unprecedented levels of cybersecurity that are critical in today’s digital transaction space. The same ADB survey revealed more than $13 billion in venture capital was invested in FinTech trade finance in 2016 alone.
The recent Simmons & Simmons Hyperfinance studyof the world’s leading trade banks found that only 7% believe they are at the forefront of digital innovation in spite of the fact that 80% of innovation leaders report digitally-driven products and services introduced over the past three years have expanded revenue growth. This illustrates the reality that financial institutions recognize the importance of developing a digital strategy, but few are moving aggressively enough to take advantage of these new technologies.
The question before the house right now, though, is: what about the credit rating agencies? The question comes in three parts: there are the global CRAs; the smaller/regional CRAs in most of the world, and regional CRAs in the special case of China.
First, the global CRAs [there are just two of them, Moody’s and S&P] are making “strong efforts” to incorporate an understanding of ESG issues. They are hiring staff with ESG backgrounds, equipping their existing analysts with the relevant expertise, and drawing on third party providers.
Then there is China. Its CRAs include Dagong Global, China Chengxin, and Golden Credit Ratings. The idea of integrating ESG into their analyses is thus far limited to the issue of green bonds, that is, bonds issued for the development of brownfield sites. Government policy in China encourages green bonds and the CRAs have responded. The resulting assessments are focused on the “E,” not so much the “S” or the “G.” And their environmental assessments rely on measuring the impact of the project the bond aims to finance.
Research very generally supports the hypothesis that there exists a causal link between ESG factors and the credit worthiness of a borrower;
Academic research in limited in that it is too exclusively content to measure credit risk by credit ratings, rather than testing the ratings themselves against alternative measures;
But some research does employ the spread of credit default swaps as an independent measure of risk;
Anecdotal observation indicates a clear link between G and defaults, although the linkage between E and S and defaults is more difficult to pin down;
There is much evidence in the linkage of ESG to macroeconomic factors and potential growth, which in turn are important to sovereign risk in particular.
The asset-backed bond market is braced for a slew of new issues next week, with deal flow expected to be dominated by auto issuers including BMW and Mercedes.
Just two issuers sold deals this week – GM Financial and Consumer Portfolio Services – and both auto trades were met with strong demand from investors. One banker on the GM deal said the deal was over-subscribed across the capital stack.
The biggest tightening though was seen on the smallest and lower rated tranches. The 3.58-year Class B, rated Aa3/AA by Moody’s and Fitch, priced at 30bp over interpolated swaps versus guidance of 35-40bp and whispers of 45bp area.
The 3.58-year Class C, rated A1/A, priced at 50bp over interpolated swaps versus guidance of 55-60bp and whispers of 65bp area.
Currently, it represents only 1 percent of the global financial industry. By comparison, digital media accounts for 40 percent while eCommerce accounts for around 10 percent.
To give you a perspective, venture capitalists invested more than $13 billion across 840 different fintech holdings in 2016, according to a report by KPMG. This is 7 percent more than they invested in 2015.
According to the McKinsey report, five areas will see high growth over the next decade. They are consumer finance, mortgage, lending, retail payment, and wealth management.
PayPal handled $1.73 billion worth of transactions in the first quarter of 2017 alone, representing a 30 percent increase year-on-year.
Overstock’s blockchain-focused subsidiary, Medici Ventures, named its board of directors in 2017, and also saw a number of its portfolio companies continue to use blockchain to revolutionize industries including capital markets, money and banking, property registry, voting, identity, and underlying blockchain technology, including:
tZERO, the world’s first SEC approved, blockchain-based alternative trading system, launched its initial coin offering (ICO), which attracted over 10,000 subscribers and raised $100M in commitments in the first 12 hours of its pre-sale. A significant portion of the tZERO security tokens issued will be available to accredited investors in the public sale beginning in January, 2018.
DeSoto Inc., a joint venture between Overstock.com founder and CEO Patrick Byrne and world-renowned economist Hernando de Soto, was created to develop a global property registry system to surface the property rights of billions of people in the developing world.
Bitt, a Barbados-based financial technology company using blockchain to create central banking tools and mobile money applications, named Rawdon Adams, son of former Barbadian Prime Minister Tom Adams, as its CEO. Bitt also fully launched its new mMoney digital payment product, bringing to market a blockchain-based mobile wallet that allows users to participate in digital transactions on their smartphones without the need for a traditional bank account, helping to foster financial inclusion in the region.
South-American based Ripio (formally known as BitPagos), participated in an ICO that raised $37M to fund its Ethereum-based peer-to-peer lending platform, Ripio Credit Network.
Belgium-based SettleMint launched a token sale for its DataBroker DAO, a peer-to-peer marketplace created to provide Internet of Things (IoT) sensor-owners with a clear path to data monetization, and data consumers with a decentralized marketplace in order to buy IoT sensor data. SettleMint also signed an agreement with The Islamic Research and Training Institute, the research arm of the Islamic Development Bank Group, to work with local partner Ateon on developing blockchain-based financial products that can be used to support development and inclusion in IsDB member countries.
Zürich-based lender, TradePlus24, has selected Australian deep tech startup, Trade Ledger, as its global technology partner to roll out its new trade insurance wrapped lending product across their European lending network, and enter the Australian market.
According to IDC, only about a quarter of US bank technology budgets is spent on digital transformation, as opposed to business as usual. They expect this to grow to nearer 40 per cent in 2020.
Secondly, this spending could substantially boost banks’ productivity, and profits.
Banks will drive up the cost of customer acquisition for start-ups who will increasingly struggle unless they build network effects and scale very quickly. Roboadvisers and peer-to-peer lenders will be on heightened alert. Some start-ups will need to rethink their plans to disrupt and look to form partnerships instead.
Changes in financial regulation, such as a lighter touch fintech charter being examined in the US or the second payment services directive in Europe, could potentially make this more likely. The tech giants have the brands, customer reach, digital processes and flair to develop good products, and to take swift advantage of any regulatory changes.
A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.
A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.
Currently, local banks extend loans at interest rates ranging between 8.5 percent and 13pc. The local banks began offering SME loans at8.5pc interest in 2015. Since then, the Japan International Cooperation Agency (JICA) and KfW Development Bank from Germany have also launched SME loans.
To get around the financial constraints, borrowing from family members and peers is common.
In fact, a rising number of businesses have resorted to P2P lending for funds to build up their businesses. Without any guarantees of success though, many entrepreneurs ultimately end up in debt. Others fall prey to fraud. Last year, The Myanmar Times reported at least three cases of fraud involving fake promises of repayments with up to 30pc interest.
Cloud Lending Solutions was recognized as a “Top 25 FinTech Company for 2017” by APAC CIO Outlook Magazine. A panel of industrial experts and executives collaborated with the editorial board to curate the list with an aim to provide clarity into the ideal FinTech partners.
News Comments Today’s main news: IEG Holdings wants to turn Lending Club into a balance sheet lender. Groundfloor launches nationwide. Crowd2Fund launches 30M GBP fundraise. China may get a second consumer credit bureau. Klarna expands e-commerce footprint. Today’s main analysis: LendingTree releases mortgage offer report for December. Today’s thought-provoking articles: Are corporations posting fake comments on government regulatory websites? History […]
Groundfloor expands nationwide under Reg A. AT: “To my knowledge, this is the biggest and the best opportunity for non-accredited investors in marketplace lending. Larger platforms that have been around much longer, such as Fundrise, Prosper, and Lending Club, have opportunities for non-accredited investors, but Groundfloor was started specifically to give non-accredited investors opportunities to invest in real estate, and their offerings are something the average non-accredited investor can understand. Not to mention, their minimum investment is only $10. In a world where the average person can’t afford a $400 emergency fund, that’s a huge door of opportunity. The big question is, is their business model sustainable?”
On January 5, 2017, IEG Holdings (OTC:IEGH) launched a tender offer for up to 4.99% of LendingClub (NYSE:LC).
– Management believes it can convert LendingClub from a broker of loans into a balance sheet lender
Non-accredited and accredited investors in all 50 states can now participate in real estate crowdfunding investment opportunities with Groundfloor. Groundfloor, the first issuer qualified by the U.S. Securities & Exchange Commission to offer real estate debt investments via Regulation A that are available to non-accredited investors, today announced that it has received qualification as an issuer under Tier 2 of Regulation A. The qualification allows over 150 million additional investors to access real estate investment opportunities that have been previously unavailable to them, tripling Groundfloor’s addressable market.
In 2017, Groundfloor saw tremendous growth of over 380% in origination volume and 786% in revenue, prior to announcing a partnership with its first institutional investor, Direct Access Capital (DAC).2 Groundfloor lends in 27 states, and has self-originated over $50 million in loans for 398 real estate projects earning individual investor portfolios average annualized returns of 11.74 percent to date. Groundfloor has also raised $9.1M in venture capital from leading fintech VCs and angel investors.
LendingTree®, the online loan marketplace, today released its monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.
December’s best offers for borrowers with the best profiles had an average APR of 3.80% for conforming 30-year fixed purchase loans, up from 3.75% in November. Refinance loan offers were up 1 bps to 3.70%.
For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 12 bps to 4.42%, the highest since July 2016. The loan note rate hit the highest since March 2016 at 4.32% and was up 14 bps from November.
Consumers with the highest credit scores (760+) saw offered APRs of 4.26% in December, vs 4.56% for consumers with scores of 680-719. The APR spread of 30 bps between these score ranges was 3 bps wider than in November and the widest since this data series began in April 2016. The spread represents nearly $15,000 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $233,586. The additional costs are due to higher interest rates, larger fees or a combination of the two.
Refinance APRs for conforming 30-yr fixed loans were up 7 bps to 4.31%. The credit score bracket spread widened to 24 from 20 bps, amounting to $12,000 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $241,973.
Average proposed purchase down payments have been rising for 8 months and reached $63,740.
A significant number of fake comments appear among thousands criticizing a proposed federal rule meant to prevent conflicts of interest in retirement advice, according to a Wall Street Journal analysis.
Consider the experience of Robert Schubert, a Devon, Pa., salesperson. A comment posted in his name on the Labor Department website opposed the rule, saying: “I do not need, do not want and object to any federal interference in my retirement planning.”
In an interview, Mr. Schubert said the comment was a fraud. He didn’t post it and doesn’t agree with it. “I am disgusted that people can post comments using my name,” Mr. Schubert said.
Mr. Schubert is among 50 people who responded to a survey last week conducted by research firm Mercury Analytics for The Journal—40%, or 20 of whom said they didn’t post the comment listed under their name, address, phone number and email.
A pattern of cyber deception is appearing across the federal government in the nooks and crannies of the process where White House directives or Congress’ laws are turned into the rules Americans must abide by—or in the Trump era, are repealed.
Hundreds of thousands of comments, purportedly made by Americans, have come in over the electronic transom to at least five different federal agencies calling for an end to Obama-era consumer protections and other regulations that impede profits, a series of investigative reports by the Wall Street Journal found. Except, the people who supposedly sent these comments never did.
The US economy added 148k jobs in December and the unemployment rate held steady at 4.1%. The jobs number was below economists’ estimates of 190k, but average hourly earnings rose 2.5%, a strong increase, and a metric that market participants are watching as a precursor to higher inflation.
In regulatory news, Indiana is planning legislation that would cap the interest rate on personal loans at 36%, down from the current cap of 391% on payday loans. If passed, this legislation would affect the payday lending industry and some experts have expressed concerns that this may crimp credit availability to the neediest individuals. The US government is also considering updating the credit scoring methodology used in evaluating mortgage applications, to use competitors to FICO score like VantageScore, with the hope that the new scores would expand mortgage credit access to borrowers.
Frank, a New York-based student loan startup, announced this week that it has secured $10 million through its Series AFunding Round, which was led by Apollo Global Management, with participation from Reach Capital, and Aleph. This funding round brought its total funding amount to $15.5 million.
Digital superannuation advice startup SuperEd has completed a $5 million capital raise from both external investors and staff members to ramp up its expansion, with the 2012-founded company betting on digital advice being a big deal for fund managers going forward.
Earlybird Advance is a no-fee, no-interest loan from MetaBank that allows users who file through Credit Karma to claim from $500 to $1,000 of their tax refund as soon as 24 hours after the IRS accepts their tax return. This is a step up from the three-to-four week time period it generally takes for taxpayers to receive their funds.
“Digital leaders report an 8.6 percent increase in revenue, an 11.3 percent rise in productivity, and a 6.3 percent improvement in market share. Advanced firms now generate 32 percent of their revenue through digital channels, and expect that amount to rise to 48 percent by 2022,” the study pointed out.
Digital leaders acknowledge what will be the growing importance of AI in the digital transformation of industry from the front office to the back office over the next five years. According to the study, while more than half of the digital leaders are already using AI to increase productivity, some 40 percent are extending AI applications to investment management as well.
Community Reinvestment Fund, USA (CRF) – a mission-driven non-profit lender dedicated to improving communities and transforming lives – announced today that it has partnered with U.S. Bank to deliver a new solution for connecting small business borrowers with responsible lending options from community-based lenders across the country.
There are approximately 28.8 million small businesses in the U.S., accounting for more than 63 percent of the net new jobs created between 1993 and 2013. However, the Federal Reserve Bank’s 2016 Small Business Credit Surveyfound the most common challenge facing small businesses was “credit availability or securing funds for expansion.”
Second, Comptroller Otting may be helpful to Fintech companies in addressing important issues such as the Second Circuit’s decision in Madden v. Midland Funding and the so-called “true lender” issue. For example, the OCC could adopt a rule or issue interpretative guidance: (1) providing that loans funded by a bank in its own name as creditor are fully subject to Section 85 and other provisions of the National Bank Act for their entire term; and (2) emphasizing that banks that make loans are expected to manage and supervise the lending process in accordance with OCC guidance and will be subject to regulatory consequences if and to the extent that loan programs are unsafe or unsound or fail to comply with applicable law. (The rule should apply in the same way to federal savings banks and their governing statute, the Home Owners’ Loan Act.) In other words, it is the origination of the loan by a supervised bank (and the attendant legal consequences if the loans are improperly originated), and not whether the bank retains the predominant economic interest in the loan, that should govern the regulatory treatment of the loan under federal law.
To ease your anxiety, you might consider adding a small dose of alternative investments–things that zig when the stock market zags–to your portfolio, even if it means giving up some potential returns.
Wells Fargo Investment Institute, the research and strategy arm of the giant bank, recommends a 23% allotment to various alternative investments for moderate-risk investors, for example, up from 16% two years ago. At Altfest Personal Wealth Management, in New York, 15% of client assets are invested in alternatives, up from 10% last year.
Market-neutral funds. If your goal is to invest in an asset that doesn’t move in sync with the S&P 500, consider a market-neutral fund, such as a merger-arbitrage fund.
Options-based funds allow you to maintain your stock exposure–or even put new money in the market–with some degree of safety.
Long-short stock funds. These funds bet on some stocks and against others with the goal of delivering respectable returns with low volatility. The funds have been 15% to 25% less volatile than an S&P 500-stock index fund over the past decade.
What do an undocumented immigrant in the South Bronx, a high-net-worth entrepreneur, and a twenty-something graduate student have in common? All three are victims of our dysfunctional mainstream bank and credit system. Today nearly half of all Americans live from paycheck to paycheck, and income volatility has doubled over the past thirty years. Banks, with their high monthly fees and overdraft charges, are gouging their low- and middle-income customers, while serving only the wealthiest Americans.
I recently left RealtyShares, the online marketplace for real estate investing, as CEO after founding the company in my living room back in 2013.
When Zach realized I was leaving the CEO role at RealtyShares, he reached out and asked if I wanted to get involved with MetaProp, the first real estate technology incubator based out of NYC.
This opportunity would give me a chance to pursue my passion in real estate technology through a different lens while mentoring startup founders and CEOs and helping them as they embark on the same journey I embarked on four years ago.
AlphaFlow, the first automated alternative investment platform for real estate, announced today that Chris Woida has joined the company as co-Chief Investment Officer. Woida will serve as co-CIO alongside the firm’s CEO Ray Sturm, who will act as both CEO and co-CIO.
Woida brings over 10 years of experience in the financial services industry, previously helping build BlackRock’s smart beta and factor-based platforms and serving as the lead investment strategist for its flagship style-factor hedge fund during his seven years with the company. Most recently, he served as Managing Director, Head of Index Solutions at Axioma, a provider of enterprise market risk and portfolio analytics solutions. In this role, Woida helped the index business expand into derivatives, fixed income and alternative data sources, including AI and ESG.
MPOWER Financing, a public benefit corporation focused on removing financial barriers to higher education in the U.S., has appointed Lutz Braum as its vice president of marketing and business development.
LendingTree®, the online loan marketplace, and Access Intelligence, a business information and marketing company, today announced a new initiative to showcase the top innovations in financial technology (fintech) lead generation at LeadsCon Las Vegas this March.
Startups and established businesses from around the world can apply today for a chance to receive exposure, bragging rights and $25,000 in cash.
Crowd2Fund has embarked on an ambitious series of fundraises that it hopes will see £30m raised within the next 24 months.
The peer-to-peer lender, one of the first to launch an Innovative Finance ISA, has already raised £1.5m from 113 of its own investors (all of whom are either sophisticated or high net worth individuals). More shares were made available after demand exceeded the initial target of £1m. These investors have bought shares in the company at a valuation of £33m. The capital is being raised through Crowd2Fund’s platform.
Rapid growth in Britain’s consumer credit has been driven by borrowing by people with good credit scores, not subprime lending, according to research from regulators on Monday.
Unsecured consumer lending grew at near double-digit rates in 2016 and 2017, and concern that lenders had overestimated their borrowers’ creditworthiness led the Bank of England to tell them in September to hold 10 billion pounds ($13.54 billion) of extra capital.
However, research jointly published by Britain’s Financial Conduct Authority and a BoE blog showed that two-thirds of outstanding lending as of November 2016 was held by borrowers with credit scores in the top 30 percent.
Wherever you are on your life cycle, knowing the financing options available to you is a crucial part of growing and running your business.
Equity finance can be used at various stages of your business life cycle and giving up equity can be a big decision.
Private equity focuses on more medium to long term investment and will usually involve the development of the product and a new management structure to improve the performance of the business.
Crowdfunding aims to connect businesses with a large number of potential investors via a shared online platform.
Debt finance is usually used as a means of long term investment or funding working capital.
Peer to Peer (P2P) lending
P2P lending brings individual borrowers and lenders together via an online platform by by-passing traditional banks with the aim of achieving better rates for all.
Assets can be purchased via leasing or hire purchase agreements which can assist the cash flow of the business. The asset is not fully paid for upfront but over a fixed period of time and the lease or hire purchase agreement is secured on the asset being financed.
A debt factor will take on the sales ledger of the business and chase money owed by your customers. The factor will advance most of the value of the outstanding sales invoices to the business with the balance being paid once the customers have fully repaid their debt.
Last week, on January 4, the People’s Bank of China (PBoC) accepted a license application for consumer credit bureau led by the National Internet Finance Association of China. As of now, the Credit Reference Center of the central bank is the only consumer credit bureau in China.
A boom in asset-backed securities issued by micro-lenders aiming to expand in China’s fast-growing online credit market looks set to slow this year amid growing regulatory scrutiny.
Rules announced on Dec. 1 limited the amount of lending backed by the products the companies can make. They were also required to consolidate them on their balance sheets.
Ant Financial is the largest issuer of consumer loan securities, accounting for 60 percent of all issues in 2017, according to Reuters calculations based on data from China Securitisation Analytics.
Its two Chongqing-based micro-loan companies had total net capital of 10.6 billion yuan, but issued 265.1 billion yuan in loans by the end of June, according to CIB Research, a unit of Industrial Bank Co (601166.SS). Outstanding loan securities issued by the two units have exceeded 250 billion yuan, it said.
ACI Worldwide (NASDAQ: ACIW), a global provider of real-time electronic payment and banking solutions, today announced an extended partnership with Klarna, leveraging ACI’s UP eCommerce Payments solution. This will enable online businesses in 10 major markets, including the U.S. and U.K., to easily integrate Klarna’s payment products, and offer shoppers a fast and frictionless checkout process that can improve conversion rates immediately.
The peer to peer lending platform has seen a decent spike after it featured heavily across exchange Coinspot’s Facebook page as they look too soon be listed on the exchange. That exposure has also highlighted the achievements the Estonian company has made recently, including launching its fiat based loans at the end of 2017.
Strict terms and conditions usually govern the circumstances in which prepay cards can be issued by unlicensed (non-bank) institutions due to their popularity with the unbanked or low-credit community as well as their propensity to be taken advantage of for money laundering reasons. These T&Cs tend to be jurisdiction dependent, and can in some cases restrict the types of funds that can be loaded onto cards by source (for example the source of funds might be restricted to welfare payments and/or employer compensation for services rendered).
Take as an example the following condition attached to a card brought to market by an outfit called TenX:
LOADING FUNDS TO YOUR ACCOUNT
Five.1 Your Card is a payout card tied to an account directly or indirectly established by an employer or other such corporate payor (each, a “Payor”) on behalf of a consumer to which electronic funds transfers of the consumer’s wages or other compensation are made on a recurring basis, whether the account is operated or managed by the employer, a third party payout processor, or a depository institution. Only funds from a Payor may be loaded to your Account In case of errors or questions about the funds loaded to your Account, contact your payout provider.
Globally, venture investors put $7.6 billion in cybersecurity companies last year, which was up from $3.8 billion in 2016, according to the research firm. The number of cybersecurity-related investments jumped to 548 in 2017 from 467 deals the year before.
Global spending on cybersecurity was estimated to reach $83.5 billion in 2017, and that number could hit $119.9 billion in 2021, according to an IDC report from October.
Banks will increasingly start looking at startups in the FinTech, RegTech and InsurTech space as their extended innovation arms with a view to collaborate with them.
The BharatQR code, a unique interoperable payment acceptance solution developed by the NPCI (National Payments Corporation of India), Mastercard and Visa will enable point of sale (POS) transactions to be made more seamlessly. Along with banks, payment wallets like Paytm and MobiKwik will continue to make huge investments to leverage this new standard.
Startups in this space are likely to well as adoption by banks and other financial institutions rises in AI, ML, NLP (Natural Language Processing) and NLG (Natural Language Generation).
In credit-scarce Myanmar, obstacles abound for budding entrepreneurs with bright ideas, big potential and dry pockets. With banks reluctant to lend to individuals without appropriate collateral and proven track records, many small businesses ultimately fail.
Ma Khin Yadana is among those with a success story behind her garment business, which she started from scratch around five years ago.
To get back on her feet, Ma Khin Yadana sought help from a small business group on Facebook, where she met with other garment shop owners across Myanmar who were willing to invest in start-up businesses like hers by extending credit via a peer-to-peer (P2P) lending system. In return, the funds would be paid back with interest within 15 days.
However, the constant pressure of having to repay loans has begun to take a toll on the young entrepreneur. “Most of the loans from investors are on six-month terms. So far, I have 70 investors to whom I must repay K100 million in total.
When the loans are due, I have to repay in full plus interest. The main problem is the 15pc interest rate, which is too high,” she said.
In mid-2017, with higher levels of debt coming due, Ma Khin Yadana negotiated with investors for lower interest rates of 10pc.
Today, CIBC (TSX: CM) (NYSE: CM) introduced CIBC Innovation Banking, a full-service business that delivers strategic advice and funding to North American technology and innovation clients at each stage of their business cycle, from start up to IPO and beyond.
News Comments Today’s main news: Wealthfront gets backing from Tiger Global. Funding Circle partners with Kansas bank. Elevate customers see rise in credit scores. NextCapital raises $30M for digital advice platform. London tops tech funding. HMT Treasury says P2P lending not deposit-taking. Yields lower in Euro zone as MiFID II begins. Today’s main analysis: FT Partners’ CEO monthly alt lending market […]
Why did business loan growth fall in 2017? AT: “Maybe businesses are profitable without loans. If cash reserves are growing, they may be managing their businesses on those. On the other hand, business owners could be worried about an economic downturn that could crush their businesses, especially if they are in debt. A third option may be the uncertainty caused by a Trump Administration that is unpredictable.”
As FT Partners wraps up 2017 and looks forward to 2018, we are extremely proud of our accomplishments. Celebrating over 16 years in business, we executed a record number of deals, significantly expanded our team, continued our global expansion and won a number of industry awards during the past twelve months. We are confident that 2018 will be another successful year for the Firm and we are incredibly thankful to our clients and friends across the industry.
In case you missed it, we recently published our latest in-depth, 200+ page industry report: “Source: FT Partners
Business-loan growth fell to its lowest levels since the aftermath of the financial crisis in the final weeks of 2017, a puzzling development that could weigh on bank earnings later this month.
Bank loans to companies grew 1.1% from a year earlier as of Dec. 20, up slightly from a 0.8% rate the prior week, according to Federal Reserve data. That Dec. 13 level was the lowest since spring 2011, when banks were just starting to lend to companies again after the financial crisis.
The readings likely cement 2017 as the worst year for this type of lending in recent history. The average weekly rate of business-loan growth was 2.7% for 2017 through Dec. 20, compared with 9.3% in 2016 and double-digit growth in the two years before that.
“[People] from the banking industry from the tech industry. We have grown up,” said Suber. “We had some people that were great from the early days but were not good for long term growth. There has bee a major turnover in the leadership at many of these companies. My call is that companies are focusing on cash flow, profitability and EBITDA for the first time. Earnings on GAAP basis … I think that is great for the industry. You are seeing companies generate cash. [In the past] Prosper did $400 million in month and it lost money. Now it is doing, say $200 million a month and it is making money. They are being run to be profitable businesses. That is the takeaway from 2017.”
Suber says that today, Prosper makes money every quarter. They have $100 million on the balance sheet and it gets higher every month.
“We are seeing lots of money coming in from Asia to buy loans now. More than ever,” added Suber.
LendingClub, a reporting company, has had a tough two years as its stock has tanked while Wall Street looked elsewhere for growth.
More than 140,000 customers of Elevate’s RISE product have seen an improvement in their credit scores. Additionally, more than 35,000 RISE customers are now eligible to receive at least a 50 percent reduction in their APR and more than 13,000 customers are eligible to receive RISE’s lowest rate.
More than 160 million Americans are either non-prime or “credit invisibles,” without any credit score. These customers account for almost two-thirds of the U.S. population, yet are significantly underserved by the traditional financial industry.
RISE loans are originally priced to risk. Customers are eligible to receive 50 percent off of their rate on subsequent loans after 24 months of payments, eventually achieving a further reduction to 36 percent. Today, more than 35,000 customers have received or are eligible to receive a 50 percent rate reduction and more than 13,000 customers are eligible for an APR of 36 percent.
About the Data
Elevate worked with a major credit bureau to which it reports, gathering anonymized data on RISE customers. Elevate reviewed credit scores of customers from the customer acquisition point up to two quarters after loan completion.
The number of customers who have reached the necessary number of payments to receive a rate reduction was calculated by tabulating the number of accounts at the number of payments necessary.
24 months of payments are required to receive 50 percent off of the customer’s original APR
36 months of payments are required to reach 36 percent
NextCapital officially announced Thursday that it has raised $30 million in new funding to grow its enterprise digital advice platform.
The Series C round brings the company’s total funding to more than $52 million. The round was led by Oak HC/FT, and included additional investments by Manulife Financial, Transamerica Ventures, Vermont Seed Capital Fund and Route 66 Ventures.
Section 4.14 of this year’s report deals with new financial products and there is an entire section on marketplace lending. Here is their conclusion about our space:
Although marketplace lending has the potential to reduce costs and expand access to credit, the extent to which these benefits have been realized thus far is unclear. Furthermore, the marketplace lending model has not been tested through a full credit cycle. There are risks that misalignment of incentives could exist on these platforms.
The original premise of online peer-to-peer lending platforms was simple and democratic: A single mom from Kalamazoo, Mich., could post her story explaining why she needed $5,000 to pay off her credit card, and a retired electrician in Illinois could read it, decide to fund her loan and receive interest far exceeding what he could get on his savings account.
LendingClub and others that proffered this people-helping-people model quickly found they needed to make changes.
Slightly more than two-thirds of households in America frequently make use of traditional banking services, according to the Federal Deposit Insurance Corporation. But that leaves 33 percent of people in the U.S. who don’t, a significant percentage by any measure.
As the title implies, unbanked Americans are those who don’t make use of any banking services whatsoever. This includes debit cards and checking accounts, as well as savings accounts. In 2015 – the most recent year for which data is available – the unbanked represented 7 percent of U.S. households, translating to approximately 23 million individuals, including children, the FDIC reported. The percentage of unbanked households in the U.S. is down slightly from 2013, when it was 7.7 percent.
Families have a plethora of rationales for why they opt to go without banking services, but it’s usually due to what they do not have in terms of savings. Nearly 57 percent of unbanked households cite this as their prime reason, according to the FDIC report.
Around 20 percent of Americans are underbanked, according to the FDIC, which means they have either a checking or savings account, though rarely both. Households are also usually given the underbanked distinction if they’ve used alternative financing options during the previous year, such as money orders or rent-to-own services. Around 67 million Americans are underbanked, or the equivalent of 24.5 million households, based on 2015 figures from the most up to date FDIC survey.
As far as demographics are concerned, millennials are among the most likely to be underbanked, with 31 percent of them under the age of 24, according to federal figures.
BankMobile, the digital-only bank that offers checking accounts to students, wants to start offering them credit.
The three-year-old Customers Bank subsidiary launched a personal loan product for its customers at the end of December, but that was just the first of a suite of credit products the bank plans to roll out this year as part of its “customer-for-life” strategy, according to Luvleen Sidhu, president and chief strategy officer.
BankMobile has 1.8 million customers to date and has opened about 300,000 new accounts each year in the student demographic through its university partnerships.
Why are you expanding into credit now?
We’re just looking at our demographic. Many in our current customer base are living paycheck to paycheck — that’s why personal loans make sense.
How do you plan to expand your products after the personal loan?
We have a lot of products to introduce on the credit side: credit cards in the second quarter, student refinancing in the second quarter, auto loans and home equity by the second half of next year.
You’re partnering with Upstart on credit products. What are the advantages of that approach?
In the longterm you could say it’s more expensive to partner but those costs outweigh the fact that we get to market much faster.
How has competition changed since BankMobile launched?
It’s accelerated. Challenger banks and Neobanks like Moven, GoBank, Simple and Varo continue to flourish and grow. Digital banks like Ally, USAA and Captial One 360 have really done a push in 2017 attracting millennials, tweaking their product, tone, messaging, branding to make sure they start penetrating that segment. Traditional banks are finally realizing the branch based customer acquisition model is not sufficient.
Though banks might be hard-pressed to offer similar wages — average starting salaries at Uber, Pinterest, and Airbnb are all over $220,000, according to Paysa — they can offer something most tech companies don’t: a student loan repayment benefit plan.
Banking giants like Citi and Capital One with much more money and resources at hand have been making branches look more like lounges, coffee shops or museums as they figure out what to do with them with less foot traffic, but in 2018, smaller institutions could start to make a move on their plans.
The Providence, Rhode Island bank is transforming its branches into digitally-connected community centers, Johnson said.
Citizens currently has 1,200 branches, and the bank is in the second year of a 10-year plan to reduce its branch footprint as lease expiries take effect. It’s replacing paper pamphlets with digital tools, like a digital retirement checkup platform customers can use while meeting with bankers. The bank can also project digital content onto the walls of a meeting room — a nod to the digital-first habits of some younger customers. Citizens is on an ambitious track to reduce its retail footprint by as much as 50 percent — a “do more with less” approach that over the long term that will save occupancy costs, CEO Bruce Van Saun said in an earnings call last year.
When a major international bank was looking to improve the response rates for its credit card mailers in 2017, rather than changing the graphics or upgrading the paper stock, it turned to a firm that could offer guidance on how consumers make decisions.
It was trying to tap into the insights of behavioral economics, a discipline that uses psychological observations about human behavior to analyze and predict how people will act.
Banks and rival lenders are butting heads over the credit scores used to decide millions of mortgage requests by U.S. home buyers.
Now, a federal agency is weighing whether to step into the fight, which revolves around a longtime requirement for lenders who sell mortgages to Fannie MaeFNMA -3.17% and Freddie MacFMCC -3.31%to gauge most borrowers using FICO scores. The Federal Housing Finance Agency’s ultimate decision could have wide-reaching ramifications for the mortgage market and home buyers across the U.S.
Many nonbank lenders, which in some recent quarters have accounted for more than half of the mortgage dollars issued in the U.S., want the ability to use a credit score provided by a company owned by credit-reporting firms EquifaxInc.,EFX +0.00%ExperianEXPGY 0.23% PLC and TransUnion.TRU 0.80% These lenders argue the alternative score would open the mortgage market to a greater number of people and lead to more mortgage approvals, helping to boost home sales and the economy.
That is where VantageScore Solutions LLC, the scoring firm that Experian, Equifax and TransUnion launched in 2006, says it can step in.
The company says it can assign a credit score to about 30 million more consumers than FICO. Roughly 7.6 million of those consumers would potentially be eligible for a Fannie or Freddie mortgage, VantageScore says.
With that in mind, a company called PropertyMetrics has built a web based platform that’s designed to help investors come up with a proforma that includes evaluation and analysis. With PropertyMetric’s software it’s possible to analyze any property in minutes, from any device. This means investors can quickly generate a quick cash flow proforma, perform a cash flow analysis and generate PDF reports from anywhere, in a matter of minutes.
I also recently suggested Lending Club Corp. LC, +0.98% in part because of the huge buying by Chinese technology and internet expert Tianqiao Chen, who founded the online gaming company Shanda Interactive Entertainment years ago while he was in his 20s.
He owns around 20% of Lending Club, an online peer-to-peer lending platform. LendingClub recently tightened its lending standards, which hurt loan growth, so the company missed earnings estimates and guided down. But it still expects 15%-20% annual revenue growth over the next few years. This seems plausible given how many people with OK credit would like to refinance their credit card debt with loans. Lending Club estimates $300 billion to $350 billion in credit card debt could potentially be refinanced in this way.
Plain Green, LLC, the online resource for the short-term financial needs of underbanked and subprime consumers, today announces a successful settlement with BEH Gaming Ltd related to loans to the Chippewa Cree Tribe and Chippewa Cree Tribe Development Corporation. Plain Green’s settlement and payment of the debt to BEH releases the Chippewa Cree Tribe and Chippewa Cree Tribe Development Corporation from all liability. The settlement amount is under seal of court order.
The agreement settles a lawsuit filed by Florida-based BEH Gaming Ltd in 2014 (Case # DV-14-142 in the 12th Judicial District Court in Hill County, Montana) to repay loans to expand Northern Winz Hotel and Casino.
Advertising agency R2C inked a deal late last month to become the new media partner for LendingTree Inc.
LendingTree is an online loan marketplace for financial needs like auto loans, small business loans and credit cards headquartered in Charlotte, N.C. AdWeek reports that the company had a media budget of $126.5 million in 2016, and spent nearly $61 million during the first half of 2017, though R2C won’t manage LendingTree’s entire media budget.
When shopping for a business loan, it’s easy to become overwhelmed by fast-talking salespeople, endless strings of acronyms and confusing terms. If it’s unclear how much you’ll really pay for financing, that’s a good sign you should walk away, Hodges cautions.
2. Getting trapped in daily or weekly repayment cycles
Term loans are often the better option, Hodges says. They allow businesses to borrow a set amount of money for a specific purpose, like hiring new staff or stocking up on inventory. The funds are then paid back over a set amount of time, with consistent monthly payments and no surprise fees.
3. Not knowing what you deserve
After seeing countless small businesses get stuck with credit products they couldn’t afford or understand, a coalition of small business advocates, lenders and online credit marketplaces came together to launch the Small Business Borrowers’ Bill of Rights. As the first-ever gold standard for responsible business lending, the Bill of Rights outlines the rights and safeguards that small businesses should expect from finance providers.
London was the top city in Europe for technology investment last year, with more funding going into companies in the British capital than into firms based in Paris, Berlin and the next seven cities combined, data showed on Friday.
Tech firms in London attracted 2.45 billion pounds ($3.3 billion) in venture capital funding in 2017, about 80 percent of the 2.99 billion pounds invested in Britain as a whole, according to data compiled by funding database PitchBook for London & Partners.
Fintech, or financial technology, was the most popular segment for investors, attracting a record 1.34 billion pounds in venture capital, the data showed, led by major rounds for TransferWise, Funding Circle and Monzo.
London’s tech venture capital investment reached another all-time high in 2017 as firms raked in four times more cash than Paris, the nearest European rival.
Softbank’s $502m (£392m) investment in game development platform Improbable was the biggest single investment during the year, but it was London’s burgeoning fintech firms which led the way with a record haul of investments.
HMT Treasury has passed an order confirming that straight-forward peer-to-peer lending does not constitute deposit-taking.
The order relates to the now-infamous “Dear CEO” letter, sent in March 2017, in which the FCA effectively ordered P2P platforms to cease and desist with all wholesale lending activities. The rationale was that a business borrowing money in order to lend that money on constitutes a form of deposit-taking. This was deemed illegal, per article 5, paragraph 1 of the regulated activities order.
Investing in start-ups is becoming increasingly popular and accessible in the UK. The attractiveness of that market has come from two main factors: the success of a number UK start-ups built over the past two decades (ASOS, Just Eat, Zoopla, Funding Circle) which are showing the way for many more to come and the supportive policies implemented by the various governments over the same period to encourage investment in ventures.
These schemes have proven to be extremely popular with private investors who every year invest over £1.5 billion into high growth ventures under SEIS and EIS.
So how do you get started with investing in start-ups if you are new to this market?
Your first option is to invest through online equity crowdfunding platforms (ECF) such as Seedrs, Crowdcube and Syndicate Room, which showcase dozens of investment opportunities from start-ups looking to raise equity funding from the public. The advantage of ECF websites is that they are convenient and accessible to anyone with investment tickets starting at £10.
If you consider yourself to be a more sophisticated type of investor looking to build a portfolio of investments with tickets of more than £5,000 per company, then you should probably think about joining an angel syndicate.
A third option to get started is to invest through a start-up fund.
Research found almost 60 per cent of people on a low income turn to more expensive forms of credit to purchase home appliances because they do not have the means to pay up front or access to affordable credit. Seventeen per cent say they used a credit card to make the purchase, 10 per cent used an overdraft and 10 per cent used a store card. More worryingly, significant numbers said that they used high cost credit to buy home appliances, with 13 per cent relying on hire-purchase and eight per cent saying that they used a payday loan.
Blockchain-based banking startup BABB (Bank Account Based Blockchain) has appointed banking technology veteran, Paul Johnson who previously lead one of the UK’s leading challenger banks, Aldermore, as CIO to spearhead the development of the world’s first decentralised bank.
Germany’s 10-year government bond yield fell 2 basis points to 0.44 percent DE10YT=TWEB, off two-month highs hit on Tuesday after weekend comments from the European Central Bank’s Benoit Coeure that there was a “reasonable chance” ECB stimulus will not be extended this year.
Most core euro zone bond yields were down 1-4 bps on the day, with the gap between Italian and German 10-year bonds yields tightened to 160 basis points as Italian yields dropped as much as 6 bps to 2.03 percent. IT10YT=TWEB
Ireland meanwhile kicked off its annual funding drive by raising 4 billion euros with a syndicated 10-year bond, covering around a quarter of its issuance target just three days into the year.
Cryptocurrency has a new king. His name is Chris Larsen, and he’s the co-founder and former CEO of Ripple, which created the digital token known as XRP. He’s now one of the world’s richest billionaires, thanks to XRP’s incredible hot streak.
Bennett, Coleman & Co Limited (BCCL), the publisher of the Times Of India and the parent of Times Internet, has acquired an undisclosed stake in online loan company FinREQ.
As such, it looks like the investment in FinREQ is an ads-for-equity deal.
FinREQ was founded in 2011 and has tie-ups tie-ups with nationalized, co-operative, foreign, private banks, NBFCs and Housing Finance Companies. The company provides a variety of loans ranging from overdrafts, import & export finance, supply chain financing, loans against property (LAP), loans against share, lease rental discounts and others.
Pune-based Social Worth Technologies Pvt. Ltd, which runs online lending platform EarlySalary, has raised Rs 100 crore ($15.7 million) in a Series B funding round led by Eight Roads Ventures India, a company statement said.
A research from the Transamerica Center for Retirement Studies indicated that nearly three-quarters of millennials are saving for retirement and that we started doing so at an earlier age than previous generations.
Peer-to-peer (P2P) lending in India currently gives a net return of 18-22 percent to lenders.
ORIX Corporation (“ORIX”) and Yayoi Co., Ltd. (“Yayoi”) announced today that the ALTOA Online Lending Service, which leverages accounting big data and AI technology, will commence its operation through the jointly established entity, ALTOA, Inc. (“ALTOA”).
The ALTOA Online Lending Service is an online lending service that provides small amount, short-term loans for small businesses through a new credit model that leverages the credit know-how of ORIX, the accounting big data of Yayoi, and the AI technology of d.a.t. Inc., who is a partner in this venture.
News Comments Today’s main news: GreenSky raises $4.5B in equity, becomes most valuable online lender. Funding Circle has eye on IPO at 2B GBP valuation. P2P lenders in India blame lending limit on rising costs. GN Compass wants to disrupt lending liquidity in Canada. Today’s main analysis: Can Mifid II spur growth in European ETF market? Today’s thought-provoking […]
Predictions for 2018. AT: “From Lend Academy. Peter Renton doesn’t just predict the coming year. He also looks back at 2017 to see how many predictions he got right. Four out of seven at least partially right, which isn’t bad. Regarding his 2018 predictions, #1 is a no-brainer, #3 is somewhat bold but conceivable, #4 is likely and a fear of mine as well, Square is a tech giant? #6 is entirely likely, and probable.”
Financial-technology firm GreenSky LLC raised new equity from Pacific Investment Management Co. in a deal that valued the digital lender at nearly $4.5 billion, said a person familiar with the matter.
It vaults GreenSky over Social Finance Inc. to become the most highly-valued online lender in the U.S. It also makes the Atlanta company the second most valuable privately held U.S. fintech company behind Stripe Inc., which processes payments for Internet businesses.
Pimco, the Newport Beach, Calif., money manager, invested at a valuation roughly 25% above the $3.6 billion GreenSky fetched in 2016.
2017 was a tough year for some of the biggest names in alternative financial services in the U.S. – Prosper, OnDeck and LendingClub, in particular.
Breslow is hyping OnDeck’s future of partnerships with mainstream baking players – in particular, calling out a renewed partnership with JPMorgan Chase in August to expand the banks’ SMB lending reach.
Prosper, perhaps unsurprisingly, is focused on remaining prosperous, as measured by profitability and further developing its new securitization platform.
LendingClub finally got investors to show them some love – and after its record low following its analyst day earnings accounting, stock jumped 15 percent in mid-December and has managed to hold relatively stable.
Netflix has completely disrupted the entertainment industry, sending large incumbents scrambling to compete with its vast global scale.
How did Netflix pull this off? Several reasons, but one is certainly Netflix’s unique culture, outlined in its now-famous Culture Deck.
That deck was constructed by Patty McCord, who spent 14 years as Netflix’s chief talent officer.
The company McCord joined is Lending Club(NYSE:LC).
In the press release, McCord stated:
I see a lot of parallels between where Netflix was as a company 10 years ago, where LendingClub is today, and where it can go in the next 10 years. I’m attracted to LendingClub for the stellar people and the way it exemplifies the concepts of freedom and responsibility. Culture can help drive innovation in companies that are paving new ground and transforming legacy industries, like Netflix did and like LendingClub is doing today. … In our innovative world, I see marketplaces like LendingClub as the future.
Affirm isn’t just a payment method or a personal loan anymore — it’s a marketing lever for merchants
Affirm sees every transaction at the point of sale — who is buying, what they’re buying and where; it’s a departure from the way credit is underwritten today, where lenders have no idea why borrowers need the money or how they’ll use it
When most people think of alternative lending, they immediately think of payday loans and other abusive loan products. In the tech world, the first thing that comes to mind are online lenders: those who take loans traditionally originated in person and move them online. That was the first wave of alternative lenders — think LendingClub, Prosper, OnDeck, to name a few.
Based on the success of the RIA industry, the trend of breakaway advisers interested in exploring the independent channel continues to gain momentum.
Propagated by wirehouse branch management to keep their top producers in their seats, this false campaign is now being revealed as its exact opposite; there are more customizable solutions for RIAs to access and deploy alternative investments for their high net worth clients than ever before.
For example, to access alternatives on their own, RIAs in the past typically would be looking at $25 million AUM minimums just to reach cost-effective scale, and many alternative managers have $10 million individual minimums themselves.
Loyalty and rewards incentives may not be enough to make consumers like mobile payments, and it could be on retailers to find what would keep people coming back to their mobile wallets. Mobile payment adoption among Apple, Android and Samsung Pay today is low. Paying with cash or card works just fine for them, customers say.
There are some relevant lessons learned about behavioral finance and digital adoption discussed in the book “FinTech Innovation.” One of the most important lessons is the distinction between digital banking winners and laggards over time.
Disruptive innovation is ultimately less important than sustaining innovation.
Digital is a ‘pull’ technology, while much of financial serves are ‘push’ market places.
Platforms win on digital: bundling is more important than unbundling.
The Distinction Between ‘Push’ and ‘Pull’ Marketplaces
Digital brings many benefits to streamline the processes in financial services, but front office disintermediation could easily create financial exclusion in the Western world because many households operate in a ‘push’ modality. Only the few self-directed consumers are comfortable enough to ‘pull’ financial products.
This is the reason why the growth of first mover Robo-Advisor solutions were initially very promising but then faltered, while firms like Vanguard and Charles Schwab can still grow fast on digital.
Being a ‘pull’ marketplace means using digital with a purpose, like looking for a specific product on Amazon. However, very few households would google for the next investment fund or business loan. Instead, the majority would ask a friend, a banking organization or an advisor about their recommendations.
Banks, long committed to keeping customer data private and their own code proprietary, are now opening up to fintechs and third-party developers in new ways.
Open-source projects are underway at Deutsche Bank, which made code from its Autobahn commercial banking software publicly available this fall, and at JPMorgan Chase, whose Quorum blockchain software is available in the open-source software repository GitHub.
Morales, CEO of QCash Financial, a credit union service organization (CUSO) owned by WSECU (formerly Washington State Employee Credit Union), says that constraint may be lessening based on the final ruling on payday lending issued by the Consumer Financial Protection Bureau in October.
Credit unions, however, are interested in the QCash small-dollar lending platform. Morales says that nine credit unions have signed up for the product and five are currently live with it.
Identity verification will be a priority in 2018, with 60 percent of online marketplaces and other websites adopting technologies and techniques for verifying new users’ identities, the company predicts.
Funding Circle, a UK based peer to peer lender, is reportedly planning an initial public offering (IPO) for 2018. The news of the new listing is courtesy of SkyNews that reports Funding Circle will begin meeting with investment banks during Q1 of 2018 as they sign up underwriters for the deal. Shares are expected to list at some point in late 2018. If Funding Circle trades on an exchange it will become the first UK P2P lender to do so thus representing a seminal event in the online lending industry.
Research from financial advice website Moneywise has revealed the top financial goals of its users for 2018.
Moneywise found that cutting down on unnecessary spending was the top financial resolution for 2018, with 18 per cent citing this as their main priority.
Starting or boosting cash savings was voted the second most popular financial resolution for 2018, with this goal being set by 11 per cent of Moneywise users, whilst 10 per cent plan to start investing for the first time or boosting investments in a Stocks and Shares Isa.
More robo-advice platforms are on the market than ever before, and the number will grow rapidly during 2018. A joint report from the FCA and the Treasury, published last June, found that 100 robo firms are either on the market already or in active development.
IFAs may well find this frustrating – even with professional credentials and years of experience, they are subject to more distrust and scrutiny than a number of untested algorithms. Worse, these algorithms may come to represent their primary competition: they offer lower prices, they open up access to financial advice, and there is a range of options available for customers minded to use them, with more to come.
After a couple of quiet years on the IPO front, the market could be ready to bounce back with Funding Circle said to be the first targeting flotation.
In January 2017 the P2P site surpassed a £1bn valuation thanks to an £82m funding round, led by the likes of Accel.
With distribution deals with the likes of the Royal Bank of Scotland and Santander, Funding Circle lent more than £1.7bn in 2017.
The London Stock Exchange revealed that 106 companies floated on its markets in 2017, raising £15bn, up 63% by number and 164% by value on 2016. These numbers mean that the LSE surpassed all European exchanges in the year by both IPO number and by money raised.
ETF trading has since spread to 25 exchanges across Europe, but no accurate record of activity has been required by regulators. About 70 per cent of ETF trading in Europe goes unreported because it occurs via private bilateral over-the-counter transactions.
This should begin to end from Wednesday with the introduction of sweeping European rules designed to strengthen protection for investors and improve transparency across the continent’s financial markets. The package of regulations, known as Mifid II, requires comprehensive, detailed reporting of ETF trades.
The passive investment industry, which is dominated by BlackRock, State Street and Vanguard, are betting Mifid II will set their European businesses on a growth path akin to the US, where usage has spread far more widely and deeply. Assets held in US-listed ETFs stood at $3.5tn at the end of November, compared with just $790bn across all European-listed ETFs, according to ETFGI.
Peer-to-peer lending (P2P) platforms have seen a rise in traffic as well as investor interest after registering themselves with the RBI. But they argue the Rs 1-million limit placed on lenders across all platforms is restrictive.
“With time, these limits are going to be relaxed by the RBI. These have been imposed in order to avoid rapid growth that could lead to systemic risk,” said Ekmeet Singh, CEO, Lendbox.
Industry players want the RBI to raise the limit for individual borrowers and remove the limit for institutional lenders.
While Spice Digital is investing up to $3.9 million in AnyTimeLoan, prop-tech startup Foyr has raised $3.8 million from JLL and others. Also, Wipro has put in an additional $2 million in US-based tech firm Imanis.
Collins: I left the railway, cashed out my pension and started my own lending company; Great North Capital Inc. We have successfully funded approximately 100 loans; primarily focusing on high risk clients. Based on my accumulative knowledge and experience in both banking and running Great North Capital, I started to develop the idea for a peer-to-peer lending solution where there is very limited risk to the investors (lenders) while making loans liquid. Also by having our own credit system for borrowers, they have the opportunity to improve their credit rating on the platform by making timely payments and having no delinquencies. At the same time, I was learning more about cryptocurrencies and blockchain technology. I quickly realized the huge potential of the blockchain and how it can solve the liquidity problem as well as securing an investor’s principal capital; which are the main issues of current peer-to-peer lending platforms. I got in touch with Jean Pierre Rukebesha who immediately liked the idea and decided to come on board as co-founder and CFO. Hence GN Compass (Great North Compass) was born.
Between last year’s official release of Android Pay, the increasing ubiquity of artificial intelligence (AI)-powered support platforms such as Sun Life’s Ella, and the ongoing digital transformation of Canada’s banks, Canadians have more opportunities than ever to integrate fintech into their lives – but according to financial comparison platform developer Ratehub.ca, the eldest among us aren’t taking advantage.
According to the company’s 2017 Digital Money Trends Report, released last month, fewer than half of baby boomers reported trusting robo-advisors, mobile payments, marketplace and peer-to-peer lenders, and rate comparison website, while in many cases millennials and generation X-ers were nearly twice as likely to do so.
Other findings from the report include:
Nearly twice as many millennials (44 per cent) and generation X-ers (42 per cent) reported trusting robo-advisors compared to boomers (23 per cent).
Nearly twice as many millennials (71 per cent) said they trust mobile payments compared to boomers (38 per cent). (62 per cent of generation X-ers said they trust mobile payments.)
Twice as many millennials (47 per cent) and generation X-ers (48 per cent) trust marketplace lenders compared to boomers (23 per cent).
58 per cent of millennials and 53 per cent of generation X-ers trust peer-to-peer lenders, versus only 32 per cent of boomers.
63 per cent of millennials and 60 per cent of generation X-ers trust rate comparison websites, versus 42 per cent of boomers.