Monday July 9 2018, Daily News Digest

GreenSky credit marketplace lending

News Comments Today’s main news: Square pulls bank license application. Lendio facilitates 5K loans for California small businesses. Crowdfunding.de pass 500M Euro mark. Wisr doubles personal loan originations. Today’s main analysis: Deep dive into GreenSky. Today’s thought-provoking articles: How Kabbage’s president is shaking things up. Online lenders expected to increase exposure to ABS. Interview with PolicyBazaar CEO. United States Square […]

GreenSky credit marketplace lending

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United Kingdom

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United States

Square Pulls Banking Application (PYMNTS) Rated: AAA

Though Square has reportedly withdrawn its application to create a deposit-taking bank, the payments processor intends to file the application again in the future. The firm had applied for an “industrial loan company (ILC)” license with the Federal Deposit Insurance Corporation (FDIC), Reuters reported.

The news comes as it was reported in September that Square intended to submit an application to form a wholly owned and operated bank in Utah. That business unit would be called Square Financial Services Inc. and would be designed to offer loans and deposit accounts to small businesses. The bank would be capitalized with around $56 million in cash.

Kathryn Petralia, Kabbage President, Is Shaking Things Up In FinTech (Forbes) Rated: AAA

Kathryn Petralia is not your typical FinTech founder. She’s a woman, she lives in Atlanta, she’s an English major, and her Twitter handle is 

Fed Studies FinTech Lending, GreenSky Deep-Dive (PeerIQ), Rated: AAA

KBRA released its latest consumer loan indices report that showed net losses ticking up on high quality Tier 1 loans, however losses are lower on Tiers 2 and 3 loans.

A study by the New York Fed found that online lenders reduced mortgage processing time and experienced lower overall delinquencies. The study found that mortgages offered by fintech companies closed about 20% faster and showed that default rates were 38% lower for purchase loans and 29% lower for refinance loans.

GreenSky Company Profile

GreenSky, headquartered in Atlanta, is led by CEO David Zalik. GreenSky has a $4 Bn market cap, 2017 revenues of $326 MM, and employs ~900 employees.

GreenSky has funded over $12 Bn in loans for over 1.7 Mn customers. The company funded $1 Bn in loans in Q1 2018.

GreenSky has shown impressive growth in its sales YoY. As seen in the charts below, GSKY had net income of $139 Mn in 2017, up from $124 Mn in 2016, while sales grew by 24% YoY to $326 Mn.

Source: GreenSky IPO prospectus

Does GreenSky Get Credit for Marketplace Lending?

Source: Bloomberg

Lendio Facilitates More Than 5,000 Loans For California Small Businesses (Crowdfund Insider) Rated: AAA

Online small business lender Lendio announced on Thursday it has helped facilitate nearly $120 million in growth capital through more than 5,0000 to small businesses in the state of California. The lending platform has reportedly funded more loans in California than in any other state and the funding milestone comes just after a 169% increase in loans originated through Lendio’s platform in California during the last fiscal year.

Lendio also reported that according to a Federal Reserve Bank of Cleveland report, nearly half of small businesses need additional funding each year; however, since 2008, it’s been a challenge for small business owners to access financial capital. The lender noted that continued growth and innovation in online lending platforms is transforming the funding landscape. Lendio helps California small businesses get loans fast, with 70 percent of businesses getting loan offers within three days of submitting an application.

Auto lending is booming. Here’s why that might be a problem for CUs (Credit Union Journal) Rated: A

Credit unions love an auto lending boom – what’s not to like? According to one analyst, however, there could be more happening than meets the eye.

Vehicle sales continue to hover around the 17 million mark, according to the latest Credit Union Trends Report from CUNA Mutual Group, and CU auto loans amounted to more than $354 billion as of April 2018 – an increase of nearly $80 billion from just two years prior. Auto lending at credit unions has grown by double digits (as a percentage) for the last two years.

United Kingdom

City investors expect online lenders to drive growth in asset-backed securities (Peer2Peer Finance) Rated: AAA

A survey of 57 institutional investors by Managing Partners Group, released on Friday, found 60 per cent expect their exposure to ABS to rise over the next three years.

25 per cent of respondents said strong growth in fintech companies, including alternative lenders that prefer to raise capital via ABS, was a factor driving increased supply.

Rating agencies predicted a boom in P2P securitisations, but the only activity in 2017 was a £208.9m Zopa deal, led by investment trust P2P Global Investments.

Moody’s recently told Peer2Peer Finance News it expects more securitisations this year, while fellow ratings agency S&P Global has predicted a 30 per cent increase in securitisations from marketplace lenders during 2018.

How Fintech Startups Are Transforming Financial Services – and Improving the World (Equities) Rated: A

Fintech is changing the financial services landscape. It is improving customer service, increasing financial inclusion and making banking just plain simpler, easier and more accessible.

Traditional banks around the world have been fearing the inevitable for quite a while now – and although some of them are starting to invest and acquire startups, many smaller, agile companies are still stealing a lead on the financial megaliths.

One of the most dynamic and innovative markets for fintech is the UK. And here are six companies that are radically disrupting financial services – and making life easier for us in the process.

China

China Report: More P2P Lenders Collapse as Regulatory Environment Tightens (Crowdfund Insider) Rated: AAA

China is home to the largest P2P industry in the world – an accomplishment that was aided by the fact that at the beginning, few rules were in place to regulate the online lending industry. But during the past year, Chinese authorities have tightened the rules pertaining to platforms who operate P2P sites.

As recently as last month, two P2P lenders, lianbijr.com and txslicai.com.cn, were investigated by Chinese authorities.

P2P lender Yilongcaifu reportedly collapsed with its parent company Fuxing Group shut down as it fell under a police investigation.

Xzgjf.com, another struggling online lender, promised returns of 8% to 14%. Since June 19, investors have been “finding it hard to withdraw money” as borrowers are not paying back their loans.

European Union

German SME Crowdfunding Passes the €500 Million Mark (Crowdfund Insider) Rated: AAA

Early-days monitor of the German crowdfunding market, Crowdfunding.de announced in its latest quarterly report that Germany passed the half billion-euro mark in cumulated in SME crowdfunding at the end of June 2018.

The report monitors only equity crowdfunding and crowdlending on marketplaces open to German retail investors such as Exporo, Funding Circle and Companisto. It does not include private platforms such as SME lender Creditshelf.

Source: Crowdfund Insider

Real estate accounts for more than half of the SME crowdfunding market (53,3%). It is the fastest growing segment, set to more than double in size this year, after having tripled in size in 2017.

Enterprise funding represents 42.6% of the market. Renewable energy project crowdfunding remains small at 3.8%.

Kleros partners with MARKET Protocol for decentralized derivatives trading (Market Protocol) Rated: B

Kleros, a new decentralized dispute resolution ‘layer’ for virtually any transaction, has partnered with MARKET Protocol, a company building an open source foundation for decentralized derivatives markets, an industry worth over 500 trillion.

International

Finastra positioned as Category Leader in Chartis’ Credit Risk Solution Quadrants (Finastra) Rated: A

The rankings are featured in a recent report published by Chartis, titled Technology Solutions for Credit Risk 2.0, 2018, which assesses the technologies that are addressing the speed, flexibility and risk profile of the lending market.

According to Chartis, there has been a structural shift in the way that credit is provided, consumed, and analyzed in recent years. Now, following the impact of Basel II on the way financial institutions systemized their credit assessment and analysis, a digital revolution is once again transforming the credit risk market. Chartis is calling this new normal ‘Credit Risk 2.0.’ In the wake of this transformation, new operational issues and challenges are impacting liquidity management. Financial institutions must reassess how vendors are able to meet their needs and demands. Based on specific credit risk capabilities, including data management and stress testing, Finastra earned Category Leader status for both the banking book and the trading book.

5 Ways to Accelerate Financial Inclusion Through Technology (NullTX) Rated: A

Financial inclusion probably won’t narrow the gap between the rich and the poor. In fact, some of the greatest inequalities exist in some of the wealthiest countries. But it can give the poor a means of building a better life and taking advantage of the social and economic benefitsthat access to banking brings.

So how can we accelerate financial inclusion through technology? Here are the top 5 ways.

  1. Mobile Payments
  2. Cryptocurrency
  3. Crowdfunding for Lending
  4. Serving the Underbanked
  5. Digital Identity

Here’s How Social Media Can Impact Your Chances To Raise Venture Capital (Forbes) Rated: A

According to a new 

Australia

Lender sees personal loan originations double (The Adviser) Rated: AAA

ASX-listed lender Wisr (formerly known as DirectMoney) has revealed that the overall value of loan originations in the second half of the 2018 financial year increased by 136 per cent compared to the first half, while the number of new customers rose by 118 per cent over the half.

Further, the lender achieved a 66 per cent quarter-on-quarter (QoQ) growth in loan origination value and 40 per cent QoQ growth in loan origination volume in Q4 FY2018. This is up from the 42 per cent QoQ growth in originated loans recorded in Q3 FY2018.

Wisr said that its average loan amount also rose by 17 per cent QoQ to $22,670 by the end of Q4 FY2018.

How an Idea Born in Greece Transformed Australia’s Loans Market (Greek Reporter) Rated: A

Lodex, co-founded by Agrinio native Bill Kalpouzanis who is now its co-CEO alongside Mic Phillipou, uses sophisticated technology to get customized quotes for their customers who are looking for a loan.

It was Australia which presented an opportunity to put his model into practice, with banks showing growth for 15 years and the regulatory environment being kind to the kind of business Lodex wanted to become.

AFL’s Ted Richards and the human side of robo-investing (Bisbane Times) Rated: A

However, despite these tailwinds, the take up of digital advice in Australia has been relatively modest. This compares to the United States where a significant proportion of investors are embracing technology-enabled advice solutions, such as Betterment and Wealthfront.

Home-grown Australian providers, such as Clover and Stockspot, have made inroads with their low cost, automated investment offerings. The challenge remains for consumers to create a human connection with digital investment advice. That is what makes the story of former Essendon and Sydney Swans premiership player Ted Richards and his collaboration with robo adviser Six Park so interesting.

Forget Hayne, here’s four ways technology will remake financial advice (Australian Financial Review) Rated: B

So what’s accelerating the pace of digitisation of financial advice? Four key themes come to mind:

First, providers realise the current advice offering does not resonate with customers. It’s a poor “experience”. Stats suggest only one in five Australians gets financial advice.

Second, the royal commission into financial services has made it abundantly clear the dominant advice model has too many conflicts of interest.

Third, ironically, is the exit of big banks from manufacturing wealth products.

Last, and probably most powerfully, is the trend towards liberation of customer data.

India

No IPO for next 18 months, focus is on new healthcare venture: Yashish Dahiya, PolicyBazaar (Your Story) Rated: AAA

With $100 million earmarked for DocPrime for the next two years, Yashish Dahiya, Co-founder and CEO of PolicyBazaar, speaks about the architecture of the new venture and how they plan to cross-leverage product from their existing companies.

And fuelling this ambition was Softbank’s Vision Fund, which along with parent Softbank, has invested overall $8 billion in the Indian internet ecosystem over the last five years. Softbank wasn’t alone in leading this Series F round of $200+ million. The Japanese conglomerate was joined by existing investor InfoEdge, which runs Naukri.com and reportedly invested close to $45 million in the deal.

Millennials weigh online P2P lending (My Digital FC) Rated: A

With traditional investments like savings and fixed deposits she found that returns were just too low. To invest in real estate, she needed upfront and large amount of capital and investment in gold was not yielding returns like it used to. While she dabbled in mutual funds and SIPs (systematic investment plans) she realised that to earn 12-15 per cent returns, she had to be invested for 3-4 years, if not more.

Asia

Japan’s top peer-to-peer lending platform faces penalties (Nikkei Asian Review) Rated: AAA

Tokyo-based Maneo Market overlooked misuse of funds that a client collected from investors, according to regulators.

The Securities and Exchange Surveillance Commission recommended on Friday that the Financial Services Agency impose administrative penalties on Maneo Market.

On behalf of a client named Green Infra Lending, Maneo Market raised roughly 13 billion yen ($117 million) from 3,084 investors to finance projects inside and outside Japan, promising annual returns of 11% to 14%.

Securities Commission Malaysia Invites Applications for Crowdfunding and Peer to Peer Lending Operators (Crowdfund Insider) Rated: A

The Securities Commission Malaysia (SC) is inviting interested parties to apply to operate investment crowdfunding platforms and peer to peer lending sites. SC states that applicants may submit their applications for registration now with a deadline of September 7th, 2018.

MENA

Benson Oak Sets Up Dedicated Investment Fund for Israeli Market (Ctech) Rated: A

Prague-headquartered investment banking firm Benson Oak is setting up a dedicated investment fund for the Israeli market, the firm announced Sunday. The fund, which will focus on blockchain and consumer-facing companies, has already raised $25 million with the intention of raising a total of $100 million by the end of the year.

Benson Oak’s capital comes from private investors, strategic companies, and family offices, and the firm does not partner with institutional investors. The new fund will target seed-stage companies and is expected to announce two portfolio companies in the upcoming days.

Authors:

George Popescu
Allen Taylor

Tuesday November 21 2017, Daily News Digest

Purchase APR LendingTree

News Comments Today’s main news: Experian buys, integrates Clarity Services. Think Finance files for bankruptcy. PayPal offers robo-investing. Assetz Capital achieves 1.5M GBP funding through Seedrs. Elevate launches industry research repository. Nav Athwal steps down as CEO of RealtyShares. Ping An Insurance prepares for Lufax IPO. TransferWise doubles revenue. Today’s main analysis: LendingTree releases monthly mortgage offer report. Today’s thought-provoking articles: The […]

Purchase APR LendingTree

News Comments

United States

United Kingdom

China

European Union

Australia/New Zealand

India

MENA

News Summary

United States

Integration of Clarity Services Inc by Experian (Experian Email), Rated: A

Dear Clarity Services Inc Supplier:

As a supplier to Clarity Services Inc, we are writing to formally notify you that as of October 6, 2017, Clarity Services Inc has been purchased by Experian Holdings, Inc.

Effective January 1, 2018, purchases and invoice payments will be processed by Experian’s centralized Procurement and Accounting departments.

Source: Experian

Think Finance Files for Chapter 11 (U.S. Bankruptcy Court), Rated: AAA

Read the court brief here.

PayPal in robo-investing venture (The Australian), Rated: AAA

The payments company was connecting its website and smartphone apps with those of Acorns Grow, a five-year-old automated savings and investment service, the two companies said on Monday.

PayPal users would be able to use their accounts to make contributions to Acorns and would be able to monitor and manage their Acorns investments from the PayPal app, said Joanna Lambert, the company’s vice-president of consumer financial services.

PayPal is rolling out the Acorns offerings in phases, with the first batch of users getting access on Monday and all US users by early 2018.

Elevate’s Center for the New Middle Class Launches Industry Research Repository (BusinessWire), Rated: AAA

The Center for the New Middle Class, a research-focused body developed by Elevate to engage and educate the public about the growing needs of individuals who do not have access to traditional credit options, today announced it has launched an industry research repository for researchers, reporters, policy makers and the general public. Known as the Resource Database, it is a curated collection of the best research on non-prime Americans and their challenges, attitudes, and needs.

In addition to containing external research and editorial content from sources such as Pew, the National Bureau of Economic Research and “The Atlantic,” the database will house research and commentary from the Center for the New Middle Class regarding economic conditions that affect America’s New Middle Class.

By visiting the database here users can search for entries, filter the results, and see the full bibliographic reference of information provided.

The Cleveland Fed Retracts Their Report on “P2P Lending” (Lend Academy), Rated: AAA

The shame of all this is that all the sensational headlines have already been written and confirmed in many people’s minds the supposed shady nature of our industry. It would have been far better for everyone if the authors of this report had done their homework and produced a thoroughly researched report in the first place.

As Todd Baker pointed out, “we really should know which online lenders are adding to consumer financial health and which ones are detracting from it.”

Why The Cleveland Fed Pulled Their Online Lending Study (PYMNTS), Rated: AAA

“[These borrowers] are not underbanked, they’re sort of overbanked,” observed Yuliya Demyanyk, a Cleveland Fed economist and co-author of the report. “Defaults on [marketplace] loans have been increasing at an alarming rate, resembling pre-2007 crisis increases in sub-prime mortgage defaults, where loans of each vintage perform worse than those of prior origination years.”

The authors of the Nov. 9 report “have received several questions about the composition of the underlying data set they used in their analysis,” the Cleveland Fed said on its website, and are “revising their paper to further clarify the data sample they used” and will post the new version as soon as it’s ready.

So, what happened?

One theory is that they may have stretched the definition of online lending so far as to make an accurate and credible apples-to-apples comparison implausible.

Karen Webster spoke with Lending Club’s head of government relations, Richard Neiman, to get a better sense of the source of discrepancy, since even Googling the definition of marketplace loan, Webster commented, might have saved the Cleveland Fed economists a lot of grief.

“The industry is so big now,” Neiman said, “that it is not easy for policymakers to fully understand the divergences between different platforms, the different products, the different modeling and the differences in levels of transparency that are now defined as online lending.”

LendingTree Releases Monthly Mortgage Offer Report for October (Business Insider), Rated: AAA

LendingTree, the nation’s leading online loan marketplace, today released its first monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network.

  • October’s best loan offers for borrowers with the best profiles had an average APR of 3.75% for purchase and 3.70% for refinance, on conforming 30-year loans.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were down 3 bps month over month, to 4.31%, the lowest since November 2016. In contrast, the loan note rate of 4.18% was up 7 bps to the highest since July.
  • Consumers with the highest credit scores (760+) saw an average APR offer of 4.18% vs 4.44% for consumers with scores of 680-719. The APR spread of 22 bps between these score ranges was 1 bps lower than in September. The spread represents nearly $12,600 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $228,730. 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 10 bps to 4.26%. The credit score bracket spread widened to 16bps from 15 bps, nearly $7,500 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $235,844.
  • The average proposed down payment for purchase mortgages have been rising for 7 months and reached $59,680 in October.
  • Average monthly payments were little changed at just over $1,100 for both purchase and refinance. The credit score bucket spread was $241 for purchase and just $77 for refinance.
Source: Business Insider
Source: Business Insider

Inflation and Counterfeit Credit (GoldSeek), Rated: AAA

Let’s take a look at an often-repeated idea that is popular in the gold and alternative investing communities. The government possesses a printing press. Therefore, it will never default. It will just inflate its way out of the debt. It will devalue the dollar.

The government does not set the value of the dollar. And it has no mechanism to set it. So, logically, it has no mechanism to reset it. It cannot devalue it. In the same way, you cannot lower yourself down by your bootstraps since you are not lifting yourself up by them in the first place.

We must emphatically state that the government does not print. It borrows. Congress does not have a printing press, to create greenbacks. It has a Treasury that can sell bonds to cover whatever payments the government is obligated to make that it has not got tax revenues for. Over the past year, for example, the government increased its debt by over 630 billion dollars.

Like any bank, the Fed borrows to fund its purchases of interest-paying assets. It earns a spread between what it pays (currently about 1.25%) and what its asset portfolio pays (over 2%). The commercial banks currently deposit over $2.1 trillion in excess reserves, and the Fed’s total liabilities are over $4.4 trillion including Federal Reserve Notes (on which the Fed pays zero). Unlike any commercial bank, there is a law that obligates us to treat the Fed’s liabilities as if they were money.

We are working on the problem that all borrowing and lending uses the dollar. We offer gold financing, simplified and a yield on gold, paid in gold.

Source: GoldSeek

Right now speculative mania is occurring in crypto currencies so that may (but not necessarily, beware correlation!) shunt such capital flows away from gold. As to default risk, there are signs of rising stress in high yield credit markets, but it’s early yet.

Nav Athwal Exits CEO Role at RealtyShares (Crowdfund Insider), Rated: AAA

Nav Athwal, one of the more prominent founders in the real estate crowdfunding space, has announced his decision to step down from the CEO role at RealtyShares, a platform he founded four years ago.

Ed Forst, RealtyShares Board Member and former CEO of Cushman and Wakefield, has been selected as the interim CEO while the company searches for a permanent replacement.

Crowdfund Insider spoke to Athwal regarding his decision to change his leadership role at RealtyShares and he explained he would continue to be engaged with the company;

“RealtyShares is in the strongest position it’s ever been in. The company is moving from the build phase to the scale phase of its lifecycle. To best position RealtyShares for the future, I made the decision to transition out of my role as CEO to a new role on the Board of Directors. I asked Ed Forst to take on the role of interim CEO, while we look for a permanent CEO who will fit the culture and profile we’re seeking. I am still very much a part of RealtyShares and will be actively involved in strategic decision-making. I am looking forward to supporting the company in this new capacity and getting back into principal real estate investing and agribusiness. As I begin to work on additional projects, I will be sure to let you know.”

Leading RealtyShares Into Its Next Chapter (RealtyShares), Rated: A

I started RealtyShares four years ago with the idea of creating a company that would make real estate more accessible, efficient, and transparent. RealtyShares has come a long way since those early days in my living room. It is now a 100-person operation and the leading platform for online real estate investing and capital formation.

My primary focus has always been to best position RealtyShares for future success. RealtyShares is now at an inflection point. I will remain on the Board of Directors supporting the company as it continues on its journey to build a global marketplace for real estate investing.

Kabbage Releases Research: On Building Successful Small Businesses (Crowdfund Insider), Rated: A

Kabbage Inc., a global financial services, tech and data platform serving small businesses, released new data reporting on the similarities that connect all small business owners (SBOs), including personal sacrifices, professional challenges and growth expectations. Featuring responses from 400 SBOs, the data shows more than 67 percent expect to increase revenues by the end of 2017, with more than half anticipating an increase of 10 percent or higher.

In partnership with Bredin, a leading small-business market research firm, Kabbage polled small business owners across industries, including retail, education, manufacturing, food and beverage, healthcare, automotive, energy and finance.

RealtyMogul Tops $ 300 Million in Real Estate Funding (Crowdfund Insider), Rated: A

RealtyMogul has topped $300 million in total deal flow.

RealtyMogul has garnered over 140,000 investors, received over $300 million invested into deals presented on its platform and returned $65 million to its investors since its inception in 2012.

RealtyMogul Wins Gold in 2017 Stevie Awards for Women in Business (BusinessWire), Rated: A

RealtyMogul has been awarded the Gold Stevie Award in the Consumer Services category during the 14th annual Stevie Awards for Women in Business.

The Stevie Awards for Women in Business are the world’s top honors for female entrepreneurs, executives, employees and the organizations they run. All individuals and organizations worldwide are eligible to submit nominations – public and private, for-profit and non-profit, large and small. The 2017 awards received entries from 25 nations and territories.

The Postal Banking Solution (Jacobin Magazine), Rated: A

Fewer than two thousand people live in Bluff, but any one of them can walk into the post office and cash a check or apply for a loan.

Meanwhile, the United States is riddled with what are called banking deserts — inhabited areas, many of them urban, where residents have no access to a bank.

One in four US households is unbanked or underbanked, meaning they’re fully or partially boxed out of traditional financial services. Those 68 million people represent a growing market for payday loan sharks, and spend an average of 10 percent of their yearly income on the high interest and fees that go with alternative financial services — roughly the same proportion they spend on food.

But there’s a collective solution to the banking desert: we could set up a public postal banking system like New Zealand’s.

Fighting the fees: robo-advisers win followers, if only for lower costs (Pittsburgh Post-Gazette), Rated: A

But one day last year Mr. Hansen was complaining to his mother, an avid investor, about the high fees he was paying on his investment account. She suggested he look into an online investment company called Betterment that markets itself as a low-fee alternative to traditional financial advisers.

Some of the most popular robo-advisers — such as Betterment, Wealthfront and Charles Schwab’s Intelligent Portfolio — use exchange-traded funds to keep costs low. Betterment charges an annual fee of 0.25 percent of the account value. Wealthfront charges no fee for accounts $10,000 or less. Schwab’s robo-advising platform limits its fees to the operating expenses included in the ETF, which range between 0.07 percent and 0.21 percent of the fund balance.

Citizens Bank, a Providence, R.I.-based bank that claims the third-largest deposit market share in the Pittsburgh region, introduced a new digital investment and advisory platform on its online banking home page in September.

A July report by S&P Global Market Intelligence predicts that digital advice assets will grow from $98 billion at the end of 2016 to $460 billion at the end of 2021.

InterNex Capital Launches “Velocity” (PR Newswire), Rated: A

Digital asset-based lender, InterNex Capital (“InterNex”) is pleased to announce their Velocity platform for small and medium-sized businesses. Velocity provides borrowers on demand liquidity through the InterNex Line of Credit and delivers real-time access for working capital management. Velocity empowers accelerated growth and powerful analytics, traditionally only available to large enterprises.

Wells Fargo adds overdraft protection with Rewind (Bankrate), Rated: B

On Nov, 14th, Wells Fargo announced Overdraft Rewind, a new feature to help customers avoid fees for overdrawing their checking accounts right before payday, when overdrafts most commonly occur.

Going forward, the bank will not charge overdraft or insufficient funds fees if a direct deposit large enough to cover those charges is received by 9 a.m. local time the day after the account goes negative.

You don’t need to opt in; if you have a Wells Fargo account, you’re covered by default.

Fintech seeks to ‘democratize data’ with Nasdaq’s help (American Banker), Rated: A

The fintech startup Intrinio has partnered with Nasdaq to include the exchange’s real-time data feeds in its financial data marketplace.

Global Debt Registry Unveils Collateral Pledge Blockchain Proof of Concept (Global Debt Registry), Rated: A

Global Debt Registry (GDR), the asset certainty company, today announced it has developed a collateral pledge registry, the first of its kind in the structured credit space, using Hyperledger Fabric, one of the Hyperledger blockchain framework implementations hosted by The Linux Foundation.

Midwest is on the rise in attracting tech investors’ interest (Crain’s Cleveland Business), Rated: A

Among those quoted in the story is Mark Kvamme, a top venture capitalist in Silicon Valley who now heads Columbus-based Drive Capital. The firm has raised $550 million and invested in 26 companies, betting, The Timessays, that “the middle of America amounts to an undervalued asset, rich in markets, new business ideas and budding entrepreneurs.”

Even so, three-quarters of all venture capital invested in America goes to California, New York and Massachusetts, the National Venture Capital Association estimates, and Ohio gets less than 1%.

Getting Help with Credit Card Debt (Business Insider), Rated: A

For the many Americans who face unmanageable credit card debt, it’s time to get their financial lives in order, says Andrew Housser, co-founder and CEO of Freedom Debt Relief– and if they need outside help, time to know how to find the right firm.

People looking for a trustworthy debt relief organization to help win the battle against debt can ask Housser’s seven questions:

  1. Does the company provide actual consultations and free advice to consumers?
  2. Does the company provide educational material, including budgeting and financial advice, free of charge?
  3. What is the background of the firm’s management team?
  4. How long has the company been in business?
  5. Request and review the company’s dropout and completion rates.
  6. What are the fees, and how will the firm assess them?
  7. How will the company help with creditor calls?

Atomist is formally launching with the Developer Automation Platform, an open source client and API. The new Development Automation Platform is designed to bring automation into the development and delivery process so that developers can focus on more important tasks.

Companies such as NVIDIA, Pivotal, Kyyti Group, Marlette Funding and Barclays Africa use Atomist for automation.

Mphasis’ top trends in Cognitive Intelligence in 2018 (CIO), Rated: B

  1. Smart environments with Pervasive Human and Machine Networks
  2. Predictive Analytics driven Customer 360
  3. Artificial Intelligence driven Multi-structured analytics – Cognitive Intelligence can enable insurance companies in analysing contact centre as well as chat data interactions in real time to predict propensity for fraud based on voice, video and text analysis and correlating the same with other similar fraudulent customer behaviors. The long term objective in such scenarios is to build machine learning based intelligent systems which learn on an ongoing basis based on historical pattern based analysis of billions of user and machine data points and predicts events.
  4. Immersive Multi-modal User Experiences
United Kingdom

Assetz Capital Achieves £1.5 Million Through Latest Seedrs Funding Round (Crowdfund Insider), Rated: AAA

Less than a month after launching its latest equity crowdfunding campaign on Seedrs, peer-to-peer lending platform Assetz Capital has successfully secured £1.5 million from more than 700 investors. The online lender took to the funding portal to raise £1 million for expansion.

Banking bots advise NatWest customers on investments (ITPro), Rated: AAA

NatWest has launched a chatbot that allows customers to seek financial advice from the comfort of their sofa.

The bot will determine the best way for customers to invest their money by asking questions such as what they want to achieve from investments, their current financial situation, what they can afford, their debts and other personal information, plus their attitude to risk.

It will then suggest ISA products they could consider for investment, plus how much they should consider investing and the most effective way to use their ISA allowance.

Monzo plans crowdfunding push to deepen ties with customers (Financial Times), Rated: A

Banking app Monzo is planning to launch one of the UK’s largest crowdfunding efforts next year to give customers in the fast-growing bank what it calls “a greater share of ownership”.

Tom Blomfield, chief executive, said the start-up, which raised £71m in a private equity fundraising earlier this month, intends to make a further cash call of between £10m and £30m in 2018.

However, the main driver of the crowdfunding push would be “to enable the customer base to own part of the bank”, Mr Blomfield said, adding that crowdfunding created a “genuine sense of ownership”.

Payday loan firm used £1.2m pension liberation scheme to pay debts (Citywire), Rated: A

Three directors of an insolvent payday loan firm which received cash from pension liberation schemes have been disqualified.

Speed-e-Loans.com (SEL), used £1.2 million from private investors via the schemes to meet its existing debts.

Directors Philip Miller, Robert Alan Davies and Daniel Jonathan Miller have been banned from acting as directors for nine, six and five years respectively for breaching fiduciary duties and the duties of care, skill and diligence.

China

Ping An Insurance Preparing For IPO Of Online Financing Platform Lufax (Asian Review), Rated: AAA

Ping An Insurance Group is working towards an initial public offering for its peer-to-peer online financing platform Lufax Holding, the Chinese insurer’s chief operating officer said on Monday.

She didn’t provide a timeline or size for the planned public offering. The company was valued at $18.5 billion after a round of fundraising last year.

Ping An Insurance sells tech, lightens assets to aid returns (Asian Review), Rated: A

Ping An Insurance Group will go light on assets and target technology exports as its next mainstay, China’s leading financial conglomerate said Monday.

European Union

TransferWise reports doubled revenue for last fiscal year (AltFi), Rated: AAA

The London-based firm’s annual revenue has grown by 140 per cent since last year, coming in at £67m this year compared to £28m in 2016. Its audited results show an adjusted operating profit of £2m, and an overall profit for the fiscal year of £7.4m.

As a result, TransferWise’s operating loss has decreased from £17m in 2016 to £56,000 in 2017.

Swiss Platform Launches ICO Engine to Host Start-ups (TheStreet), Rated: A

Switzerland headquartered Eidoo has today officially launched a initial coin offering (ICO)engine that allows companies and startups to host ICOs through the Eidoo mobile app.

According to data provider Coinschedule, $3.3 billion has been raised in more than 200 ICOsover the past 12 months alone and the popularity of this innovative ICO form of crowdfunding shows no signs of relenting.

BNP Paribas buys 10% stake in SME credit specialist Caple (AltFi), Rated: A

Through the alliance and a 10 per cent stake in Caple, BNP Paribas Asset Management (BNPP AM) is establishing a new platform to offer alternative credit to European SMEs.

Australia/New Zealand

CEO Jeff Greenslade details why Heartland Bank is moving aggressively into digital banking (Interest), Rated: AAA

Greenslade also reiterated Heartland’s forecast for June 2018 year net profit after tax of between $65 million and $68 million, an increase of up to 12% from $60.8 million in the June 2017 year.

“While some understandably lament the decline of branch banking, the bricks and mortar approach is not something we can compete in and is showing signs of obsolescence,” said Greenslade.

He pointed to Heartland’s digital services offering livestock finance, personal loans, SME working capital finance and deposits, noting “significant opportunity” to build on these.

Heartland has just six branches in Takapuna on Auckland’s North Shore, Hamilton, Tauranga, Wellington, Riccarton in Christchurch, and Ashburton.

India

Lower interest rates for borrowers in offing? Read where things stand (Financial Express), Rated: A

The Reserve Bank of India’s (RBI) guidelines for peer-to-peer (P2P) lending will attract more people to these platforms and help bring down the interest rates for borrowers, Bhavin Patel, founder and CEO of LenDen Club, told Shritama Bose. Players in the segment have sought the regulator’s clarifications on the permissibility of institutional lenders on P2P platforms, he added.

Will the RBI guidelines have an impact on the lending rates?

In the current scenario, the P2P lending market is a minuscule percentage of the huge lending market in India. But, due to the sentimental impact of the regulation, many more lenders may take to P2P lending, resulting in higher liquidity on such platforms. This will eventually lead to reduction of the interest rates offered to borrowers in this segment.

How Fintech is Shaping Up the Future of Financial Services (Dekh News), Rated: A

Traditional banking institutions have changed very little in the last hundred years. Most offer online banking and mobile apps these days, but behind the scenes, very little has changed.

In total, $49.7 billion was invested in fintech between 2012-16, which indicates just how important fintech is.

Fintech innovators are more cost-effective than traditional lenders. Their technology and business models are low cost. A traditional lender may have operating costs of around 7% compared to an online lender whose operating costs are as low as 2%.

A staggering 38% of customers no longer visit banks. The rise of online banks has proven that traditional bank branches are not essential. Online lenders such as Atom have become firmly embedded in the banking ecosystem.

MENA

A tale of how two cities thrive in FinTech world (Khaleej Times), Rated: A

Two cities thrive in this new world. Singapore and Abu Dhabi. Long before renewable energy was pervasive, Abu Dhabi had established Masdar. It has brought in the magic of the Louvre from Paris. Singapore has consistently been ahead of the curve of change. The world’s largest vertical botanical garden paves the way for urban farming. The Marina Reservoir is a masterpiece of engineering and vision that turned an inlet of the sea into a strategically critical freshwater resource for the “Little Red Dot”.

Recently, the Abu Dhabi Global Market (ADGM) held its inaugural FinTech Abu Dhabi Summit.

Two major announcements were made at the event. The first was the launch of the ADGM FinTech Innovation Centre by the first half of 2018.

The second was about a collaboration. ADGM and Plug and Play, the world’s largest startup accelerator based in Silicon Valley, signed a new partnership to launch a startup acceleration programme in Abu Dhabi, focused on FinTech. The programme, first of its kind in the Mena region, will be housed within the ADGM FinTech Innovation Centre. The partnership was signed by Ahmed Al Sayegh, chairman of ADGM, and Saeed Amidi, CEO, Plug and Play. Some of Plug and Play’s success stories include Google, Paypal, Dropbox and Lending Club.

Authors:

George Popescu
Allen Taylor