Tuesday January 3 2016, Daily News Digest

Cross River Bank

News Comments Today’s main news: Online lending enters annul SEC report on rating orgs for first time. Today’s main analysis: Cross River Bank tries new approaches. Today’s thought-provoking articles: China’s new P2p rules could trigger run on deposits. Will India sustain its surge on digital payments? What do 2016 hiccups mean for alt lending in 2017? United […]

Cross River Bank

News Comments

United States

United Kingdom

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News Summary

United States

Online Lending Enters Annual SEC Report on Rating Organizations for First Time (Crowdfund Insider), Rated: AAA

The Securities and Exchange Commission publishes an annual report on “nationally recognized statistical rating organizations (NSROs).”  These are the agencies that publish credit ratings on certain securities and institutions.  The mandated report has recognized the emergence of online lending for the very first time.

The SEC also noted that several larger NRSOs published commentaries on the emerging online lending sector.

What Do The Hiccups Of 2016 Mean For Alternative Lending In The New Year? (Forbes), Rated: AAA

“Alternative lending is dead,” said Rob Frohwein, co-founder and CEO of Kabbage, “but not because of the hiccups that have occurred in the industry.”

During the year, Lending Club had one piece after another of negative news come out.

Then, in mid-November, it wasreported that Dealstruck, an alternative lender of short- and medium-term small business loans, stopped lending operations altogether.

But while some alternative lenders have run into problems, others remain confident that their model remains the future of lending. And many see the OCC’s proposed FinTech bank charter (the culmination of a review that began in August, 2015) as a sign the industry is both here to stay, and ready to grow up.

Another alternative lender for small businesses that has maintained investor confidence and has continues to grow its lending operations and expand its product offering is BlueVine. The company, which was launched as a modernized option for invoice factoring, recently began offering a line of credit product which now accounts for a sizable part of their business. After funding over $200MM in working capital for small businesses in 2016, they successfully raised $50M in additional funding to expand their efforts.

Through tighter internal controls, self regulation, and closer partnerships with traditional lending institutions, it appears that alternative lending will continue to expand its role in 2017.

N.J. bank keeps turning out new approaches (Banking Exchange), Rated: AAA

After enabling a shake-up of the lending landscape, a small bank in New Jersey has set its sights on payments.

Cross River Bank has about $543 million in assets and just one branch, a small storefront in Teaneck, N.J., that shares a retail center with a mom-and-pop clothing store.

Cross River is essentially a business-to-business bank. It handles the messy, boring parts of banking so its fintech partners can improve customer experience with easy-to-use platforms.

The use of issuing bank partnerships is nearly ubiquitous in digital lending. WebBank is arguably the biggest player by virtue of servicing the largest marketplace lenders: LendingClub Corp., Prosper Marketplace Inc. and Avant. But Cross River is not far behind, acting as the issuing bank for Marlette Funding’s Best Egg platform, Upstart and Affirm. The bank also won the right to issue consumer loans for mortgage giants Quicken and loanDepot.com LLC. Utah-based Celtic Bank is big in the small business space as the issuing bank for On Deck Capital Inc., Kabbage, and Square Capital.

So far, issuing bank partnerships have been extremely profitable. Cross River’s return on average equity exceeds 20%, less than that of its issuing bank competitors but well above the sub-10% ROAE for banks with less than $1 billion in assets.

Gade believes Cross River’s payments activity could double next year, and the bank already has relationships with Stripe and Google Wallet to provide access to the Mastercard Send product.

Cross River currently handles roughly 2 million transactions per month, and there are “a lot of market shares for the taking,” Gade said. He highlighted insurance companies paying out claims, commercial landlords looking to accept payments from tenants and auto companies collecting lease and loan payments as examples.

Issuing bank partnerships currently account for roughly 40% of the bank’s business. Traditional community banking activities, such as commercial real estate and small business lending, account for 40% to 50% of its activity, and the remainder is related to payments. Gade said payments activity could stabilize at roughly 30% of activity, with issuing bank partnerships staying around 40%. The traditional community banking share will shrink but still constitute 20% to 30% of business.

Consumer alleges Funding Circle USA called him for solicitation purposes (Northern California Record), Rated: A

David Vaccaro filed a complaint on behalf of all others similarly situated on Dec. 19 in the U.S. District Court for the Central District of California against Funding Circle USA Inc. and Does 1 through 10 citing the Telephone Consumer Protection Act.

According to the complaint, the plaintiff alleges that beginning in July 2016, the defendant called his home phone to solicit its services. The plaintiff holds Funding Circle USA Inc. and Does 1 through 10 responsible because the defendants allegedly used an automatic telephone dialing system to call the plaintiff without his consent. The plaintiff also alleges his number is registered on the National Do-Not-Call Registry.

Will 2017 Be the Year We See the First RECF-Bank Partnership? (Equities.com), Rated: A

Lend Academy claims 2017 will be huge year for bank-marketplace lending platform partnerships. If they made this claim last month after a year of such partnerships being announced, that tells me they’re expecting next year to produce even more such partnerships. It’s not a far-fetched notion. There are plenty of benefits to these partnerships, both for the banks and for the MPL platforms.

If Lend Academy is correct and 2017 will see a surge in bank-marketplace lending platform partnerships, it’s quite possible that at least one of these—perhaps a few—will be with real estate crowdfunding platforms. The only question is, what structure will those partnerships take?

The following three structures promise the most benefits to both parties:

  1. Bank-as-Originator – In this scenario, the bank acquires the customer and originates the real estate loan while the RECF platform underwrites it. Retail stores, industrial expansions, or apartment complexes are three potential uses for this type of partnership.
  2. Banker-as-Capital – If the RECF platform acquires the customer and simply needs capital funding from the bank, this is another scenario that could benefit both parties.
  3. White Labeling – In this case, the bank white labels the RECF’s technology to originate and underwrite the real estate loan. A variation of this is to co-brand both the technology and the service to expand the brands of both the bank and the RECF platform.

Financial technology rules are set to change in the Trump era (The Hill), Rated: A

President-elect Donald Trump plans to shake up Washington. The full scope of his proposed changes remains to be seen, but they will certainly affect the financial services industry, especially financial technology.

In 2015, Treasury released a request for information regarding online marketplace lending. In May, the department published a white paperoutlining the responses it received and made certain recommendations for best practices in order to encourage growth and expanded access to credit through online marketplace lending.
The most potentially burdensome requirements are those related to financial inclusion. The CRA is only applicable to institutions insured by the Federal Deposit Insurance Corporation, so most OCC-chartered financial technology companies would not be covered. This places partnerships between banks and online marketplace lenders, which are popular with banks to supplement their CRA portfolio, at risk.
Project Catalyst is the CFPB’s effort to encourage innovation in a way that benefits consumers and businesses. Recently, the CFPB announced a policy that will provide financial technology companies with the opportunity to have the CFPB review their products and services, as well as their compliance program. After review, the CFPB can provide a letter indicating the agency’s belief that the company is compliant with the relevant laws and regulations. It also states that the CFPB will not pursue any enforcement actions if the company does not make material changes.
While the policy is considered friendly to the industry, the recently released prepaid card rule is not. Its broad definition of “prepaid cards” captures digital wallets that can store money and may deter startups in that space due to the high compliance burden.
The SEC’s crowdfunding rules allow for equity crowdfunding through the internet. Marketplace lenders are securitizing debt, which implicates the SEC. So-called robo-advisers are increasingly common and projected to have $2.2 trillion under management by 2020.

One US agency is under investigation – and it could spell trouble for US fintech (Business Insider), Rated: A

The agency has been hit hard by critics of late, and President-elect Trump’s transition team is investigating the CFPB’s recent performance, according to the Wall Street Journal. At the same time, it remains embroiled in a legal battle over whether its organizational structure is constitutional. If the CFPB is unable to untangle itself from these issues, it could negatively impact its fintech initiatives — and the US fintech industry more broadly. 


Finding the Right Ecosystem (Invesment News), Rated: A

The rise of companies utilizing financial technology (fintech) over the past five years can no longer be ignored by traditional wealth managers and established financial services firms.

More and more, boards of directors are demanding that their executives have a comprehensive understanding of the fintech landscape and how these companies could disrupt their business model—and to do this without losing sight of their core competencies.

To tackle this challenge, we recommend:

  1. Zeroing in on a large and robust ecosystem that is still flexible and can encompass the majority of use cases
  2. Prioritizing the capabilities your firm will require in order to compete in the 21st century, understanding how those capabilities can be incorporated into your existing business and whether you need to buy or build those capabilities
  3. Finding the right partner who can help you figure out where to begin
  4. Considering platforms that incorporate fintech technologies that support high touch relationship management – everything from precision advice (the right advice at the right time) to automated approaches to portfolio management

Fintech Advocacy Group Reaches Out To Trump (JD Supra), Rated: B

A financial technology advocacy group has reached out to President-elect Donald J. Trump, encouraging him to create a new position at the Treasury Department to support fintech.

In a letter to President-elect Donald J. Trump, Financial Innovation Now (FIN) suggested the creation of an Undersecretary for Technology position in the Department of the Treasury to “ensure the growth of financial technology jobs in the U.S.” as well as “foster competition and innovation in financial services to better serve consumers and the economy.”

 United Kingdom

‘Expect more big agency firms to back online projects in 2017’ – claim (EstateAgentToday), Rated: A

The head of a new ‘disruptive’ online mortgage service says 2017 will see more major estate agency and other property businesses backing online models, of the kind seen this year with the investment by high-end firm Savills into budget internet agency YOPA.

Back in June Savills revealed it had made an undisclosed investment in YOPA in a bid to buy a stake in digital technology and gain exposure to a wider range of sales and rental sectors than its traditional high-end involvement.

Now Ishaan Malhi, founder and chief executive of online mortgage firm Trussle, says there will be more of the same in the next 12 months. He believes the need for more digital innovation applies across the property industry, not just with estate agency.

What to watch out for in alternative finance in 2017 (altfi), Rated: A

The UK watchdog has promised changes to its much-vaunted crowdfunding regime – changes that are set to arrive in the early stages of 2017. Some of the more unexpected points to be raised – and to keep an eye out for action on in 2017 – include the strengthening of rules surrounding wind-down plans, extending mortgage-lending standards to platforms, the enforcing of additional “requirements or restrictions” on cross-platform investment, and the potential for investment limits in peer-to-peer lending.

Funding Circle, RateSetter and Zopa, each of which has lent over £1.5bn to date, continue to languish under interim permissions. You have to believe that this will change in the first quarter, or at least first half of the year ahead.

2017 should signal the end of referral scheme prognostication, as we should finally be able to gauge the impact of the initiative in practical terms – i.e. how many businesses rejected by the banks for credit will ultimately be funded via the referral scheme in year one?

Brexit and broader economic uncertainty will unquestionably cause tension in certain areas.

Finally, keep an eye out for certain platforms choosing to branch away from retail investment in 2017.

Personal savings top fallback option for UK’s entrepreneurs (BMM Magazine), Rated: B

Research by crowdfunding network Crowdfinders has found that 35% of respondents said they would turn to personal savings to fund their business, closely followed by banks and institutions and friends and family.

However, only 8 per cent of the respondents said they would turn to crowdfunding and just 5 per cent said they would opt for P2P lending.

European Union

Galway companies flourish with financial aid from fellow small businesses (Connacht Tribune), Rated: A

A company specialising in the growing business phenomenon of peer-to-peer lending has revealed that it has raised €688,560 for Galway businesses.

Linked Finance raised 31 loans for 23 Galway-based businesses through Linked Finance’s online lending platform, including Schoolbooks.ie, Sleepzone and Turas Bikes to facilitate business expansion.


“Two to three” fintechs will remain in future (Broker News), Rated: A

As the number of fintech firms continues to grow, companies will have to reduce costs and become profitable or be forced to consolidate.

Due to these “really high” costs, Poolman expected that the overall fintech market would be whittled down to “two or three” players eventually.

In its most recent accounts filed for January to December 2015, OnDeck showed a $2.9 million loss on $463,000 worth of loans. However, the company was not lending the entire time during this period.


China’s tighter P2P rules may trigger unexpected run on deposits (South China Morning Post), Rated: AAA

Tighter regulations on China’s peer-to-peer (P2P) lending sector are potentially putting depositors’ money at risk and could even trigger an anticipated run on deposits in March, with many of the lending platforms facing the very real prospect of liquidation, according to market watchers.

Authorities in Beijing are determined to examine the credentials of some 3,000 P2P lending operators and expel any questionable players by March, following a raft of scandals involving at least 100 billion yuan worth of deposits from millions of residents.

It is estimated that only 200 P2P companies will pass the review process undertaken by authorities, with the remaining players forced to close their operations and repay money to depositors.

Under the new rules, a P2P company has to appoint a commercial bank as its custodian while fully publishing how investors’ money is being used.

Banks, battered by worries about the risks after P2P was hit hard by a series of fraud cases, have shown lukewarm response to the custodian business.

Ezubao, one of the mainland’s largest P2P platforms, was found to have defraud more than 1 million investors of about 100 billion yuan last year.

Under the tighter regulations, authorities will also conduct on-site checks on risk management, scale of businesses, IT infrastructure, investment sources and shareholders’ credibility before granting P2P lenders the go-ahead to continue doing their business.

FinTech Boom: China Going Cashless, Consumers Ditching Banks (Coin Telegraph), Rated: A

China, the largest fintech sector according to the International Trade Administration (ITA), is going cashless. Consumers are moving away from traditional banking systems to more efficient and user-friendly financial technologies.

KPMG, one of the Big Four auditors with over $25 bln in annual revenue, recently released its Fintech 100 list which represents the largest and most profitable companies within the global fintech market across all categories.

China’s Ant Financial and Qudian topped the list, claiming the first and second in rankings respectively. Lufax, ZhongAn and JD Finance also made it to the top 10 list, as Chinese companies accounted for 50 percent of the top 10 Fintech 100 companies.


Will the surge in digital payments sustain? (India Times), Rated: AAA

Following Prime Minister Narendra Modi’s announcement that Rs 1,000 and Rs 500 notes would no longer be legal tender from the midnight of November 8, fintech startups, particularly wallets and payment gateways, have seen business surge. Sequoia-backed MobiKwik, for instance, has seen a 200 per cent surge in app downloads and a 20-fold increase in peer-to-peer transfers.

Market leader Paytm, backed by Alibaba, says it is currently processing 5 million transactions a day and added over 14 million users in November. Payment gateway PayU, which acquired Citrus Pay earlier this year, saw daily transaction volume skyrocket 80 per cent, which has settled to 25 per cent compared with pre-demonetisation. Tiger Global-backed Razorpay says volumes are now up 50-70 per cent over pre-demonetisation levels, after seeing an initial spike of 150 per cent.

Snapdeal-backed wallet FreeCharge reported that 1,00,000 Snapdeal deliveries in mid-November were through the wallet, while Flipkart is aggressively marketing its wallet, PhonePe.

With cash still scarce, wallet and other digital payment-enablers continue to see rapid doubledigit growth. But the billion-dollar question is whether this will sustain, once the cash crunch eases, as it inevitably will this year.

Founders are confident it will, primarily because of the unprecedented support from the government.


Wallet-led startups say their product is low-cost, does not involve any hardware and can be scaled up rapidly. Of 15 million businesses in the country, only 1 million have PoS machines, making the other 14 million fair game for adoption, apart from other avenues. Payment gateway startups, understandably, beg to differ. “I personally think the concept of prepaid wallets has failed.

A recent RBI report on digital payments mentioned that even in November, only 3 per cent of transactions were through wallets, the rest were through cards. If wallet payment had taken off, it should have been 40:60,” says PayU’s Rau. He argues that it is easier to get customers to use debit or credit cards as they are comfortable with it, than payments using ewallets and mobiles.

Hurdles apart, the sector is likely to see big rounds of fund-raising in 2017, with all the buzz around a cashless economy.

P2P Lending Platform Rupaiya Exchange Secures $ 200,000 in Angel Funding (Crowdfund Insider), Rated: A

Earlier this month, Delhi-based peer-to-peer lending platform, Rupaiya Exchange, announced it secured $200,000 in angel funding from HNIs and investors. Launched in November 2015 by founder Rohan Hazrati, the company stated it aims to connect borrowers and lenders to facilitate peer-to-peer lending in India.

Note ban-hit investors ditch real estate & gold to fund alternative lending cos (India Times), Rated: A

Alternative lending startups have witnessed a spike in lender registrations after the currency ban as people are now looking to park their investments on their platforms rather than in real estate, gold or the stock market.

Sequoia-backed invoice discounting marketplace KredX has noticed a 4-5x increase in lender registrations on their platform since November 8, including from high net-worth individuals (HNIs) and institutional lenders like banks and non-banking finance companies (NBFCs).

Similarly, peer-to-peer lending companies like Faircent, i-lend and AnyTimeLoan.in (ATL) have noticed an approximately 3x increase in lender registrations as other investment channels seem unstable or inaccessible following the cash crunch.

17 startups to watch in 2017 (India Times), Rated: B

Government policy has done a lot to boost the fortunes of peer-to-peer lending platform FairCent in 2016. From RBI’s draft paper with guidelines for the industry to Digital India, FairCent benefited last year and looks to grow further in 2017. “From disbursing Rs 15-20 lakh loans a month, we are now disbursing Rs 1.5 crore a month. India’s shift to digital payments has put us in a sweet spot,” says Rajat Gandhi, founder, FairCent. The company, which began operations in 2014, helps customers get cheaper loans based on their creditworthiness and helps lenders earn high returns from their peers or community.

Bengaluru-headquartered Capital Float considers 2016 a remarkable year for fintech startups. “The sector attracted $150 million in funding. Digital India and demonetisation will only give further impetus to the sector,” says Gaurav Hinduja, co-founder, Capital Float. The company, which started in 2013 with loans to SMEs, has come up with innovative products such as ‘Pay Later’, which gives loans to retailers against data on PoS machines. Capital Float, which primarily handles e-commerce finance, has seen 8x growth in 2016, its biggest so far. From Rs 150 crore loans disbursed in 2015, it disbursed Rs 1,000 crore in 2016. Capital Float tied up with 45 new players, including Amazon, Yatra and Ola.

Payment provider Pine Labs says the volume of online transactions trebled in 2016, even before the grand finale of demonetisation. “From handling about 10% of card payment transactions in India, we have grown to 20%,” says Lokvir Kapoor, CEO, Pine Labs. In terms of volume, it has seen a growth to Rs 10,000 crore a month from Rs4,000 crore in January 2016. With clients that include Armani, Jimmy Choo and Pizza Hut, the company feels there more opportunities to grab in the year ahead. “We have more than 60,000 retailers in India and will be heading overseas. We will be setting shop in Singapore with a partner bank,” says Kapoor.

Indian Demonetization & Rupee Reform: The Uber Moment Fintech Needed? (Crowdfund Insider), Rated: B

Citizens and observers said that it was a “chaotic” decision, a major “disruption” that required citizens to exchange notes or deposit them within about a month and a half, or else lose the cash value.  However, the seemingly radical monetary move may be just what fintech — and a global economy seeing increasing digitalization — needs.  Founder and CEO of Faircent.com Rajat Gandhi claims that it is the “Uber moment of fintech”.

As huge amounts of cash were taken off of the market over the past weeks and individuals were forced to deposit them into banks and ATMs, there will be an increase of reliance on digital wealth management.  With 86 percent of the currency in circulation theoretically out of sight, we should see a shift from “cash is king” to increased digital banking.


Looking at 2017 from a Fintech Leader’s Perspective (TechVibes), Rated: A

Financial technology overall enjoyed a robust year in 2016 in Canada, highlighted by the creation of several bank partnerships and expansion in the robo-advisor space.

It’s likely that we will see a major fintech exit the Canadian market in 2017 as some of the newly created credit deteriorates in quality due to saturation of the market: both on the consumer and business fronts.

In 2017, investment capital is likely to continue to flow into the fintech space, particularly into lending, as investors clamour over some of the attractive yields available in alternative lending in today’s otherwise low interest rate environment.

We are going to see an increase in collaboration in this space. Between the Canadian Payday Lending Association and the banking associations, we need representation for the alternative lenders operating in the spaces in between – and this is starting to happen.

Is fintech a disruptor or enabler for Canada’s big banks? (The Globe and Mail), Rated: A

According to the search tool Factiva, the term “fintech” appeared close to 90,000 times in the global print media this year versus fewer than 300 in 2007, with many more references on social media. Its usage has actually declined since 2014, suggesting the fintech hype may have peaked.

An influential study by Citigroup reported that fintech investments topped $19-billion (U.S.) in 2015, a tenfold increase from 2010. The consultancy McKinsey & Co. is reportedly tracking more than 2,000 fintech startups, with the global estimate around 12,000.

The early view appeared to be that fintech startups would disrupt incumbent banks and steal their customers, similar to Airbnb and Uber. But the emerging consensus is that banks and fintech startups will inevitably collaborate, combining their respective strengths to deliver a superior customer experience. Not everyone agrees, of course, but the tide of opinion has clearly changed.


Iran Banking Roadmap: Efficient, Innovative (Financial Tribune), Rated: A

Addressing the Sixth Conference on E-Banking and Payment Systems held in Tehran on Monday, Ali Kermanshah added that the blueprint is set to define an appropriate role for fintech companies in the Iranian banking system.

According to the CBI official, the roadmap requires the development of 12 new platforms for conducting banking operations and covering system support, six platforms for implementing monetary policies and eight platforms for promoting supervision.


Crowdfunding & Fintech Predictions for 2017 (Crowdfund Insider), Rated: A

  • Global Online Lending will See More Platform Consolidation including a Major Lender
  • Several Reg CF / Title III Crowdfunding Portals Shutter or Pivot
  • A Prominent Real Estate Crowdfunding Platform will Cease Operations
  • The FCA Review of Crowdfunding Brings More Regulations
  • The UK remains one of the leading economies in the world and the European divorce questioned the entire validity of the EU. But Europe needs Britain and Britain dearly needs Europe. Working things out to mutual benefit is good for all countries.  Politicians that want to punish the Brits for their political intransigence will be over-ruled by those with more foresight.
  • US SMEs Receive a Boost from the Incoming Administration
  • The UK and Singapore will Remain Dominant Fintech Innovation Centers
  • More Later Stage Companies Use Crowdfunding Platforms
  • InsurTech will Gain Momentum
  • Marcus launched small but expect a growing number of credit options and digital banking services to be provided by the emerging challenger bank. SoFi – look out.

Capgemini: Fintech Disrupts Testing and Quality Assurance (Crowdfund Insider), Rated: A

Renu Rajani, Vice President of Capgemini, opined earlier this week that Fintech’s revolution this past year has disrupted trends in testing and quality assurance (QA).


George Popescu
Allen Taylor

Monday December 12 2016, Daily News Digest

student loan home ownership

News Comments Today’s main news: SEC urges LC to be more transparent. Today’s main analysis : Millennial home ownership shrinks while student debt grows. Today’s thought-provoking articles: UK crowdfunding to get harder, but money will be safer. A roundup of international FinTech regulation. What new rules for Chinese P2P lenders are designed for. United States SEC requests more […]

student loan home ownership

News Comments

United States

United Kingdom

European Union






  • Top 10 FinTech companies in Mexico. GP:” One should not discount the online lending of non major financial centers of the world. “. AT: “It’s good to know who they are.”

News Summary

United States

SEC Urges LendingClub to Disclose More About Loans and Funding (The Wall Street Journal), Rated: AAA

The Securities and Exchange Commission has urged LendingClub Corp. to disclose more about its lending operations and has questioned the company’s use of tailored “non-GAAP” financial measures, according to newly released correspondence between the regulator and the online lender.

LendingClub told the SEC that it would provide some more information about its lending and funding, according to the letters. But the company pushed back against the commission’s requests in some respects, and insisted its metrics were “not misleading.”

LendingClub is the latest high-profile company to face SEC criticism over its use of non-GAAP metrics—unofficial measures of earnings that don’t comply with generally accepted accounting principles, or GAAP. They strip out one-time or noncash items to provide what companies consider to be a truer measure of performance, but critics fear the metrics can be used to make companies look healthier than they really are.

Millennial Home Ownership Shrinks as Student Debt Grows (Financeography.com), Rated: AAA

At the beginning of 2016, the home ownership rate for those 30 and under sat at about 27.7%, the lowest it has been in decades.

On the other hand,  student loan debt rose to $1.2 trillion, though it has already surpassed the $1.3 trillion mark earlier this year. In a development which should surprise nobody, there seems to be a pretty clear correlation between the growing student loan debt Americans hold and the under 30 home ownership rate.

It isn’t too far of a stretch to see the percentage hit the 25% mark within the next couple of years.

OnDeck Announces New $ 200 Million Revolving Credit Facility with Credit Suisse (PR Newswire), Rated: A

OnDeck® (NYSE: ONDK), the leader in online lending for small business, announced today the closing of a $200 millionasset-backed revolving debt facility with Credit Suisse.

In addition to its other funding sources, OnDeck may now obtain funding under the new credit facility with Credit Suisse, subject to customary borrowing conditions, by accessing $125 million of committed capacity and an additional $75 million of capacity available at the discretion of the lenders.

Under the facility, loans will be made to Prime OnDeck Receivable Trust II, LLC, or PORT II, a wholly-owned subsidiary of OnDeck, to finance PORT II’s purchase of small business loans from OnDeck. The revolving pool of small business loans purchased by PORT II serves as collateral under the facility.  OnDeck is acting as the servicer for such small business loans. The Class A Loans under the facility were rated by DBRS, Inc.

OnDeck intends to initially use a portion of this facility, together with other available funds, to optionally prepay in full without penalty or premium, the existing $100 million Prime OnDeck Receivable Trust, LLC facility which was scheduled to expire in June 2017.  As a result, OnDeck will benefit from obtaining additional funding capacity through December 2018.

Consolidation Is Coming In Marketplace Lending (Bloomberg), Rated: A

Peer-to-Peer Lending: Is This the Beginning of the End? (DepositAccounts), Rated: A

It was just a few years ago, that peer-to-peer lending was taking off so strongly that some thought traditional lending would never be the same.

Right now, the question is, what’s going on? Is this the beginning of the end or what? Truth is, success brings scrutiny. Marketplace lending was not regulated in the same way as traditional lenders. With the explosion of the industry where billions of dollars were in play, state regulators began to take a closer look and increased regulations. Earlier this year the Consumer Financial Protection issued a bulletin to consumers about the pitfalls of peer-to-peer lending and began accepting complaints about P2P lenders.

But it’s too early to have a funeral for P2P lending.

Not All SME Loans Are Created Equal (PYMNTS.com), Rated: A

According to Julia Rivers, manager at online marketplace lending platform Personal Money Service, awareness among SME owners is lacking.

When asked how educated the site’s SME clients are when it comes to the types of loans they have access to, Rivers stated, “not really.” She assessed search terms on the site and found “small business loans” and “small business loan calculator” are the most frequently searched.

The best source of education, according to Rivers, is to clarify and describe what each product is that SMEs can access through the portal.

Alternative lenders do come with higher fees, she admitted, but if a company’s top priority is accessing financing as quickly as possible, then an online lender comes out on top (though, the executive added, collaboration between alternative and traditional lenders is certainly offering a “win-win” for borrowers and lenders alike).

Peer-to-Peer Lending: 7 Things Investors Should Know (The Motley Fool), Rated: A

The peer-to-peer, or P2P, lending industry has experienced significant growth since the first major P2P platforms were established in 2006 and 2007. The total amount of money lent through P2P platforms grew more than 80% a quarter from 2007 through 2014, according to research by the Federal Reserve Bank of Cleveland. And a separate report by PricewaterhouseCoopers sees that growth continuing, with the volume of P2P loans in the U.S. projected to grow to $150 billion annually by 2025 from the $5.5 billion issued in 2014.

But just because an industry is growing, it doesn’t mean there are no risks to investors. In fact, some argue that while investors may expect steady returns from lending money through peer-to-peer platforms, they should also be prepared to lose their entire investments.

  • The type of loans you can choose to invest in vary widely.
  • The higher the interest rate, the riskier the loan.
  • Major U.S. platforms don’t guarantee loans.
  • You can invest in partial loans.
  • Diversification helps mitigate risk…if you can afford it.
  • Be aware of fees.
  • It’s unclear what will happen to P2P loans during a major downturn.

5 Ways Technology Can Help in Funding Your Small Business (Newswire), Rated: B

You too can be a beneficiary of fintech; all you have to do is learn how to take advantage of the existing (and abundant) technologies in getting funds for your business. Here are 5 options you should consider:

1. Digital Platforms
One of the most significant advantages of digital platforms is the easy access to promotional and marketing channels online.

2. Crowdfunding

With over $34 billion raised via crowdfunding in 2015 alone, you can bet this powerful funding option is one every small business and startup serious about funding should consider.

5. Bitcoin P2P Lending Services

P2P (or peer-to-peer) lending is definitely one of the most innovative new financial services in the fintech sector.

P2P lending enables individuals or businesses to borrow and lend money through online services that match lenders directly with borrowers – without the use of an official financial institution as an intermediary.

Bitcoin P2P lending services like Bitbonds give businesses access to financing that they may not have otherwise gotten approval for by traditional financial companies or intermediaries.

United Kingdom

FCA crackdown: UK crowdfunding will get harder, but your money will be safer (The Memo), Rated: AAA

Is lending money to a small family business via a small platform like Folk2Folk more or less risky than putting your money into a larger platform like Zopa?

How safe is your money if the business or platform goes bankrupt? What about the risk of investing in businesses via SyndicateRoom or Seedrs?

The Financial Conduct Authority (FCA) today said it found that in crowdfunding it was hard for investors to compare different platforms, different businesses raising money. It’s also difficult to easily compare crowdfunding to other investment opportunities, like buying stocks or shares.

That’s good new for someone looking to invest or lend money through Crowdcube or Zopa, but probably bad news for businesses and some crowdfunding platforms as they could have more rules and hoops to jump through.

Today’s FCA announcement (Zopa), Rated: AAA

We believe that an effectively regulated peer-to-peer lending industry is the best way to help us reach more customers, treat them fairly and help them build richer lives. Zopa has lobbied hard for our sector to be regulated, and we look forward to working with them through the consultation process to ensure regulation is fair and appropriate for consumers.

When our industry’s interim regulatory permissions were announced in 2014, the FCA planned to perform a post-implementation review after two years. They called for input into this process over the summer, and we spent a week working closely with their representatives to help them gain a better idea of our business and how it operates.

Assetz Capital’s Record-Breaking Month: Lends £26 million in November 2016 (Crowdfund Insider), Rated: A

Assetz Capital announced on Friday that November 2016 was officially the peer to peer lender’s most successful month ever. The website confirmed it lent £26 million to users, £100 million for 2016. 

Some UK peer-to-peer lenders are buying each other’s loans and the watchdog is worried (Business Insider), Rated: A

Britain’s Financial Conduct Authority (FCA) has found some peer-to-peer (P2P) lending platforms are using customer money to buy loans on rival platforms, rather than fund loans over their own platforms.

Interview: Wellesley Pitches to Raise GBP 1.5M from the Crowd (Info-Europe), Rated: A

UK marketplace Wellesley is currently pitching to raise 1.5M GBP in a convertible from the crowd.

  • Lenders can achieve higher risk adjusted returns than are available in traditional deposit accounts.
  • Property development lending is asset backed.
  • Funding is being put to good use, helping to build homes in the UK.

FinTech communications specialist opens in Cambridge (Business Weekly), Rated: B

A dedicated financial and corporate communications agency with Wall Street affiliates has opened in Cambridge to help life science & technology companies engage more effectively with investors and the financial markets.

The business marked its Cambridge launch by winning a new and sector-leading client, Zopa. Zopa, a UK company and the world’s first peer to peer (P2P) lender, is the market leader in the fast-growing FinTech sector. Anagallis has been retained to advise Zopa on communications around the company’s application for a banking licence.

European Union


Peer-to-peer lending marketplace Viventor has released its mobile application for iOS and Android, becoming one of the first marketplace lenders in Europe to offer such tool to its investors. Thanks to the mobile app, investing is now available anywhere, anytime.


How overseas regulators are dealing with fintech problems (Finder.com.au), Rated: AAA

In the US

The OCC has recently announced a change in regulation which something the fintech industry has been lobbying for for some time. Fintech companies will now be able to apply for federal charters which will allow them to become “special purpose national banks”. Currently, fintech companies need to seek permits state by state or partner with a bank in order to operate nationally.

In the UK

Peer-to-peer (P2P) lenders are the focus of regulatory concerns lately in the UK, with Britain’s Financial Conduct Authority (FCA) finding some P2P lenders using customer money to buy loans on rival platforms rather than funding loans on their own. CEO of the FCA Andrew Bailey told Business Insider there were a number of risks with this practice.

In China

Chinese regulators have had a seriously tough time with the country’s P2P lending boom, a sector worth more than US$60 billion. In September, the problem went so far as police raided the properties of two P2P lenders, both of which are now defunct. new regulations were introduced by authorities in October, after a long delay which may have been caused by economic fears for small businesses, with SME lending outside of P2P largely non-existent.

How to decide if crowdfunding is right for your business (Business Insider), Rated: A

Crowdfunding can represent a large and diverse equity pool that harnesses the interest of existing and future customers to give you a leg up in return for some kind of “reward”. Alternately, it can be a term that represents the acquisition of debt sourced from individual private investors rather than a big, faceless bank or the sale of equity shares in your business in exchange for routine returns.

Alan Crabbe is one of the founders of Australian crowdfunding site Pozible. He says the easiest way to think about the different types of crowdfunding is like this: offer investors a perk or incentive to back your idea, or offer a stake in your business in return for their investment.

Sometimes a combination of the two is the way forward, but it can depend largely on your specific goals.


New Rules for Chinese P2P Lenders Designed to Minimize Fraud, Slow Industry Growth (NASDAQ), Rated: AAA

Financial regulators in China have issued regulations to put the brakes on the fast-growing P2P sector a couple of times in the last year or so, but have seen limited success. China watchers have noted that the relatively minimal efforts at regulation of marketplace lenders by authorities to date may relate to the fact that lending to small businesses has largely dried up outside the P2P sector, and Chinese economic planners don’t want to see economic growth drop too low.

That said, these new regulations are more comprehensive, and represent a more serious effort by Chinese regulators to slow growth and crack down on the notable amount of fraud in the sector. Financial analysts also suggest that these new rules will help standardize offerings in the sector and discourage P2P platforms from making excessively risky business decisions.

These prohibitions alone will winnow out a lot of the newer entrants into the field, as many firms were basing their business models on making substantial profits from providing other financial services besides facilitating loans between peers.


P2P Lending Platform Rupaiya Exchange Secures $ 200K Funding (Inc42), Rated: A

Delhi-based fintech startup that facilitates peer-to-peer lending, Rupaiya Exchange, has secured$200K in its angel round of funding from HNIs and a group of professionals, reported ET.

As per an official statement, the startup has facilitated loan originations worth $10 Mn (INR 70 Cr) and disbursements in excess of $1 Mn (INR 8 Cr) since its launch.


Malaysia: ASEAN’s First Country to Regulate P2P Financing (Crowdfund Insider), Rated: AAA

Malaysia’s Securities Commission (SC) announced last month that six P2P platforms were registered and would continue to be overseen by the Government of Malaysia, making Malaysia the first ASEAN country to regulate P2P financing.  The six platforms include B2B FinPAL, Ethis Kapital, FundedByMe Malaysia, ManagePay Services, Modalku Ventures, and Peoplender.

How to use open data to benefit your business (MIS Asia), Rated: A

Show Me the Money was designed to add transparency to build trust among lenders and borrowers. The team behind the project collected data from the three largest peer-to-peer lending platforms in the UK – ZopaRateSetter and Funding Circle – to create an infographic showing how much money was lent to and from different people, with the details mapped across the country.

Privacy protection must not be sacrificed. Regulations around data ownership and sharing must be adhered to, so legal disasters are avoided, and Show Me the Money avoids revealing personal details of lenders and borrowers.  To protect privacy, ensure that any identifiable information remains concealed, or that the information is aggregated to obscure it.


Top 10 Fintech Companies in Mexico (TechBullion), Rated: AAA

Fintech is thriving in Mexico. With over 158 fintech start-ups, Mexico is the largest fintech market in Latin America, surpassing other big markets such as Brazil (130 start-ups) or Colombia (77 start-ups).

Founded in 2013, Konfio is a leading platform that assists underserved micro-enterprises to obtain affordable and convenient loans via a propriety algorithm that measures creditworthiness using technology.

Kueski is the fastest-growing micro-lending service in Mexico and Latin America.

Founded in 2011, Prestadero  is a leading P2P lending platform that is transforming the banking system to make investing more rewarding and credit more affordable.

Kubo financierois a P2P lending platform that provides affordable and accessible loans to borrowers.

UNIKOis an innovative company that provides the couple an opportunity to experience something different by changing gifts into cash.

In 2013, Bankaoolreceived the approval of the Comisión Nacional Bancaria y de Valores of Mexico (CNBV) that allowed it to be a multi-service bank.

Conektaenables developers and companies to create a payment solution with their own flow and design for any app and website.

Launched in 2010, Sr.Pagois a mobile point of sale that allows small businesses and individuals to receive card payments through tablets and smartphones.

Founded in 2014 by Marco Nery, Saldo  is a digital wallet that enables customers to pay bills to businesses in Mexico using tablets or smartphones.

Bitso is the first bitcoin exchange in Mexico, providing a platform for selling and buying bitcoin with Mexican Peso.


George Popescu

Thursday December 1 2016, Daily News Digest


News Comments Today’s main news: CAN Capital replaces CEO and other execs. Croudify: LC’s secondary market. Funding Circle sets new monthly UK record. Today’s main analysis : Online credit card fraud jumps 20%. Ratesetter’s provision fund. Today’s thought-provoking articles: China emerges as world’s largest FinTech and P2P market. Online lenders get majority of Chinese C-round funding. United States CAN Capital […]


News Comments

United States

  • CAN Capital replaces CEO and other execs. AT: “When a company lets more than one top leader go at the same time, that’s usually an indication that something is wrong with the internal workings of the company. Judging by the comment from the company, I’d say it has to do with investor value. If collection processes impacted this turnover and the company isn’t satisfied with the performance of some of its assets, that spells unsatisfactory profits. According to Bloomberg, CAN’s biggest competitor OnDeck, has seen a decrease in value in its shares by 55%. While CAN Capital is still private, its backers–Wells Fargo Capital Finance, Morgan Stanley, Barclays, and other large banks–will definitely want to see the company’s profits go up, not down, in this critical time when big banks are investing in FinTech.”
  • Croudify startup launches as LC secondary market. AT: “Earlier this year, Prosper shut down its secondary market Foliofn because few investors were using it. This makes me wonder if there is a marketing for Lending Club loans in the secondary sector. We’ll have to wait and see.” GP:” I strongly believe that a secondary market is needed and there is a big demand. I hope the user interface and the process is simply and smooth. I also hope pricing works similarly or better as on Lending Club’s FolioFN. The other interesting part here is how Orchard is still working on theirs…”
  • Online retail credit card fraud increases 20% during holiday shopping. AT: “We’ve been hearing more and more about online credit card fraud and CNP fraud. This is a natural outflow of the rise of e-commerce, but it does need to be addressed. Online retailers need to address this security issue, as do online lenders and alt finance companies that offer consumer loans.”
  • New LC ABS to test market. GP:”This is supposed to be the 1st rated LC securitization.”
  • OnDeck creates new chief risk officer position.GP:”De facto somebody already has or should have this role in each lender. It’s perhaps just a matter of title and holding 1 person accountable.” AT: “If Nick Brown succeeds in this role, I think you’ll see more online lenders appoint risk management officers, and if they can get a handle on the growing problem of loan defaults by improving the borrower approval process, it will be good for the industry as a whole.”
  • Finstar invests in Rocket10.
  • Mara Poling enters crowd investing niche. AT: “Mara Poling’s focus is on multi-family properties, a great niche to develop.”
  • RealtyShares names Bill Lanting VP of commercial debt originations.

United Kingdom

European Union



News Summary

United States

Shakeup at CAN Capital – CEO and 2 other Execs Put on Leave of Absence (deBanked), Rated: AAA

CAN Capital has confirmed that CEO Dan DeMeo has gone on a leave of absence. The company’s chief financial officer Aman Verjee and chief risk officer Kenneth Gang have also reportedly stepped down. Parris Sanz, the company’s Chief Legal Officer, has been made acting head of the company, while Ritesh Gupta has been promoted to COO.

Some of CAN Capital’s referral partners have reported to us that the funding of new deals has been put on hold until January 2017. This could not be confirmed, however.

A statement from CAN Capital is below:
As the board and our leadership team conducted our business reviews and looked at how we can best position the firm for future growth, we self-identified that some assets were not performing as expected and that there was a need for process improvements in collections. It became clear that our business has grown and evolved faster than some of our internal processes.

Croudify Launches Platform for Lending Club Secondary Market (Lend Academy), Rated: AAA

A new company called Croudify recently announced that their secondary market platform for Lending Club was launching in beta. The company describes itself as a secondary trading platform that allows you to find the best listed notes based on analytical models that they have built.

What made Croudify’s platform possible was the creation of Lending Club’s secondary market API last year. In fact, Croudify was the company that worked closely with Lending Club as they were developing the secondary market. Abhishek stated that after beginning work on their product in 2015 they eventually compelled Lending Club to build the API which was eventually made public.

Logging into Croudify you are presented with a portfolio summary which includes a snapshot of your loan portfolios, holdings by states (pictured below) and the percentage of your loans that are performing.

Clicking on a note shares further information.

Online Retail Credit Card Fraud Jumps 20% During Holiday Shopping Weekend (Marketwired), Rated: AAA

iovation, the leading provider of device intelligence for authentication and fraud prevention, today released new data that shows card-not-present fraud — fraudulent transactions where a credit card is not physically presented to a merchant — increased significantly from Black Friday to Cyber Monday 2016 when compared to the same period in past years.

iovation research shows a 20 percent increase in online retail credit card fraud during the 2016 holiday shopping weekend when compared to the same period in 2015, and a 34 percent increase in online credit card fraud from Black Friday to Cyber Monday 2014 to 2016. In addition, iovation disclosed:

  • The percent of all online retail fraudulent transactions from Black Friday to Cyber Monday that involved credit card fraud
    • 2016: 59 percent
    • 2015: 49 percent
    • 2014: 44 percent
  • The percent of all online retail fraudulent transactions in 2014, 2015 and 2016 that involved credit card fraud
    • 2016: 59 percent
    • 2015: 42 percent
    • 2014: 50 percent
  • The percent of online retail transactions from Black Friday to Cyber Monday that were fraudulent
    • 2016: 0.38 percent
    • 2015: 1.16 percent
    • 2014: 2.34 percent
  • The percent of online retail transactions in 2014, 2015 and 2016 that were fraudulent
    • 2016: 1.13 percent
    • 2015: 2.89 percent
    • 2014: 2.53 percent

iovation attributes the rise in online credit card fraud to the recent shift from consumers using traditional credit and debit cards with magnetic strips to EMV (Europay, MasterCard, and Visa) chipped cards. While the new chip cards have proven to do a great job of stopping card-present fraud, it is now clear that fraudsters are turning online.

iovation also found that consumers conducted 55 percent of their retail online transactions from this Black Friday to Cyber Monday using mobile phones and tablets compared to 49 percent the rest of 2016. This continues an ongoing mobile retail transaction increase over the holidays and year-to-year. Last year during that same period that percentage was 47 percent compared to 44 percent the rest of the year, in 2014 that was 37 percent compared to 32 percent the rest of the year and in 2013 that was 31 percent compared to 20 percent the rest of the year.

For the holiday shopping weekend, mobile retail transactions compared to all retail online transactions were:

  • 56 percent on Black Friday, Nov. 25
  • 59 percent on Saturday, Nov. 26
  • 59 percent on Sunday, Nov. 27
  • 48 percent on Cyber Monday, Nov. 28

New Lending Club ABS to test market (GlobalCapital), Rated: A

Sources speaking with GlobalCapital on Wednesday said that the deal could potentially reflect whether investors have been put off by recent reports of several outstanding marketplace loan securitizations breaching their loss triggers earlier than expected.

OnDeck names Nick Brown to newly created position of chief risk officer (MarketWatch), Rated: A

OnDeck Capital Inc. ONDK, -0.22% said Wednesday it has named Nick Brown to the newly created role of chief risk officer. Brown comes to the company from Commonwealth Bank of Australia, where he was general manager of the group decision sciences team. Brown has a PhD in organizational behavior and statistics from Cornell University.

Finstar Announces Investment in Mobile Marketing Tech Company Rocket10 (BusinessWire), Rated: A

Finstar Financial Group, a fintech-focused international private equity group founded by Oleg Boyko, announces that it has invested USD 3 million in Rocket10, a rapidly growing mobile marketing agency. This investment forms part of Finstar’s strategy to use mobile technology to grow its fintech businesses.

As part of the venture investment, Finstar will utilise Rocket10’s mobile marketing technology across the Group’s portfolio of companies. This will offer cost efficiency and unlock new development opportunities for both companies. Finstar has also secured the right to further increase its equity stake in Rocket10.

Financial services is a key focus area for Finstar and its portfolio companies. It is estimated that the number of mobile phone users will hit 4.77 billion in 2017. So mobile is becoming increasingly important, especially in the financial services sector.

Mara Poling Enters Crowd Investing (Digital Journal), Rated: A

Both Mara Poling and FundingTree.com will be sponsoring the Crowd Invest Summit in Los Angeles, California on December 7-8, 2017. Pat Poling, Founder & CEO of Mara Poling will be speaking at CIS as a panelist. Rayaan Arif, Founder & CEO of FundingTree.com will also be moderating a panel at the Summit. Mara Poling has partnered with FundingTree.com to bring Accredited Investors to properties before opening them to the public.

Mara Poling marketing partner, FundingTree.com is a new total commercial real estate marketing solution in the crowd investing and funding marketplace. The principals have decades of experience in Marketing, Social Media, Technology and Fundraising with a strong emphasis on Commercial Real Estate.

Bill Lanting Joins RealtyShares to Expand Commercial Real Estate Debt Program (BusinessWire), Rated: B

RealtyShares, a leading online marketplace for real estate crowdfunding, today announced the hiring of Bill Lanting as Vice President of Commercial Debt Originations.

Lanting brings rich financial experience in the real estate syndication and hospitality industries to the online marketplace. A former executive with Radisson Hotels and Wyndham Hotels, he has recently been responsible for bridge loan originations, underwriting, and raising large, multi-million dollar investment funds from institutional investors for Thorofare Capital and Partners Capital. At RealtyShares, he will head the expansion of the platform’s commercial debt product.

United Kingdom

Defaults gather, and now our Ratesetter watch begins (FT Alphaville), Rated: AAA

As we’ve discussed in detail before, Ratesetter now reserves the right to take interest payments and capital away from investors and put it into the provision fund, in order to make sure there are enough funds to account for loans going bad. The upshot is that investors in Ratesetter need to pay attention to the entire book of loans, rather than their individual investments. (Whisper it softly, it’s sort of like a bank.)

So how’s the provision fund doing? Well, here’s one set of data the company shows to investors on its provision fund page, as it was on Tuesday, with the relevant numbers highlighted:

But there’s another set of data provided by Ratesetter, which tells a slightly different story. It’s on their statistics page, which provides “data on annual performance of loans and returns, updated automatically in real time.” Again, the relevant numbers are highlighted below:

The second thing to note is that it’s possible to calculate the total value of expected bad debt using the numbers on the statistics page. It’s a simple matter of applying the “actual lifetime bad debt rate to date” figures to the total amount lent, and then comparing that to the value implied by the “projected lifetime bad debt rate”. The difference is the total amount of defaults that are yet to happen.

It comes to £24.3m, according to our calculations, which is about £2m higher than the amount of current and expected money in the provision fund. However, according to a Ratesetter spokesperson, that’s not the whole story. They said “around £3m” of those losses are on loans not covered by the provision fund, which means they are held by institutional rather than retail investors.

Funding Circle tops £100m in a month (alt fi), Rated: AAA

Funding Circle, a leading marketplace lender for small businesses, has recorded a UK industry first by topping £100m in loan originations in a single month. As of yesterday, the platform was sitting on £107m in loan originations for the month.

In addition to the monthly mark, Funding Circle also notched a daily lending record yesterday, with over £9.3m disbursed.

After a temporary slowdown in volumes post-Brexit, the UK marketplace lenders hit their stride again in September, with Funding Circle, RateSetter and Zopa each posting monthly origination records. Funding Circle led the pack with what was then a UK industry-wide record at £75.2m. Funding Circle then smashed its own monthly record in October, with £95m lent.

European Union

Global Companies Enlist DirectID for Real-Time Bank Data Ahead of PSD2 (Benzinga), Rated: AAA

DirectID today announced Fleetcor, Marlette Funding and Shawbrook Bank as examples of 8 new companies using its platform for trusted online verifications and live financial data. With DirectID, these companies can reduce application fraud, enable instant customer on-boarding, and scale services internationally.

These new customers build on earlier DirectID integrations with Prosper Marketplace, Amigo Loans, Bigstone Capital, and other banking, lending, payments, insurance, property and legal businesses. Forward thinking fintech disruptors can use DirectID to unlock the power of live bank data far ahead of the expected European Union Payment Services Directive (PSD2) activation in 2018.

DirectID combines identity verification, real-time financial data, compliance checks, affordability insights and ACH payment confirmation into a single platform. This improved process automates new customer on-boarding and actively reduces risk to support growth and scalability. Businesses using DirectID reduce fraud attempts by 75%, decrease on-boarding time from days to seconds, increase back office efficiencies, and can expand product offerings to over 32 countries.

In addition, DirectID announced that U.S.-based marketplace lending accelerator LendFoundry has integrated the service to offer real-time financial data and insights, such as verification income, to its participating companies for faster and more accurate credit risk underwriting capabilities.

Comrade-to-Comrade Lending? A Marketplace Lender Opens to Russia (The Wall Street Journal), Rated: AAA

Twino, a Latvian company that facilitates peer-to-peer lending, will begin listing Russian subprime loans on its website on Thursday, a first for a European marketplace lender. Investors get scant information on the people they are lending to, but they’re offered double-digit interest payments.

Twino operates a model more akin to a payday-loan operator than a classic peer-to-peer lender. Rather than matching borrowers and lenders, Twino makes loans and then uses its website to resell them to investors. It makes money by taking a cut of the interest payments.

The cut is considerable: The Russian loans will pay around 14% annual interest to investors. The company’s portion depends on the interest charged on the loan. Meanwhile, the borrowers in Russia will pay over 100% in interest, Mr. Kazanins says. Twino says that large margin is enough for it to pledge to repurchase any defaulted loans.

Russia getting slapped with international sanctions in 2014 after annexing Crimea “was a break for us,” says Mr. Kazanins. Russian banks curtailed lending and customers were forced into the nonbank market to get loans.

TRANSFER PRICING Italian ABS hindered by NPL valuation issues (LinkedIn Pulse), Rated: A

The securitisation of non-performing loans (NPLs) has been deemed a credible solution for Italian banks seeking to offload the assets from their balance sheets. Just one deal has launched to date, however. Getting a plausible valuation for the NPL portfolio being transferred to the SPV may be one of the main obstacles.

Following a set of initiatives set out by the Italian government over the past 18 months, many Italian banks are anticipating sales of large NPL portfolios into SPVs for securitisation purposes. The Italian government has agreed to guarantee the senior NPL ABS notes under its Garanzia Cartolarizzazione Sofferenze (GACs) scheme, while the fund Atlante II will invest in mezzanine notes (SCI passim).

Several factors drive the transfer price of an NPL portfolio to an SPV: the quality of the loans, the geographical location and whether the loans are secured or unsecured. However, the lengthy Italian legal process and the availability of loan data are two additional factors that may also be weighing on the NPL valuation process.

Banking Platform Mambu Receives AWS Financial Services Competency Certification (Crowdfund Insider), Rated: B

Mambu, a software as a service (SaaS) banking platform, has received the Amazon Web Services (AWS) Financial Services Competency certification.

The AWS Financial Services Competency is focusing on the AWS Partner Network (APN) members in three categories: Risk Management, Core Systems, and Data Management. Mambu had to achieve specific requirements in order for them to be a recognized partner.


China Emerges As The Biggest Advanced Fintech Market In The World (China Money Network), Rated: AAA

China is the world’s largest financial technology market, with a market size greater than US$1.8 trillion in 2015.

Out of 27 Fintech unicorns globally, China’s eight Fintech unicorns have raised US$9.4 billion in funding and have a combined valuation of US$96.4 billion, according to a report released by entrepreneur Gaurav Sharma.

The four biggest Fintech unicorns in the world are Chinese: Ant Financial (US$60 billion), Lufax (US$18.5 billion), JD Finance (US$7 billion), and Qufenqi (US$5.9 billion).

Mobile payments are also at an all-time high. China has 380 million people shopping online via their phones, as well as nearly 200 million people using their phones as a wallet for in-store payments.

On the other hand, domestic incumbent banks continue to struggle with their relatively undeveloped systems. The biggest Fintech startups are in payments and lending, which account for nearly 80% of the combined value of all unicorns.

China is also the world’s biggest P2P (peer-to-peer) lender. In 2015, registered P2P lenders originated around US$60 billion consumer and US$40 billion business loans.

Lufax is the largest P2P lender, with a valuation of US$18.5 billion. There is also Jiedaibao, which is backed by JD Capital.

Around Jan 2016, there were 4,500 P2P platforms in China with 50% of them facing frauds, high delinquency, or liquidity issues.

China is also planning to develop a far-reaching social credit system by collecting information online and providing all its citizens a score.

Hyperledger Project Hits 100 Members With Addition of China’s SinoLending, Gingkoo, ZhongChao (Bitcoin Magazine), Rated: A

Hyperledger Project, an open source blockchain initiative hosted by the Linux Foundation, has hit a major milestone of 100 active members. Several new members from China have joined the project, including Dianrong (formerly SinoLending), Shanghai Gingkoo Financial Technology and ZhongChao Credit Card Industry Development Company.

Dianrong now ranks among the top three peer-to-peer lending platforms in China, according to a report by Wdzj.com and Yingcan Consulting.

Htite has hinted numerous times at his company’s interest in blockchain technology, stating earlier this month that Dianrong has been developing blockchain applications for use in online lending. He said that that the company has committed to invest between U.S. $30-40 million in development over the next two years.

More than 80% of Internet Finance Companies Received C-round Funding are Online Lending Platforms (Crowdfund Insider), Rated: A

Data from IT Juzi.com indicates there are now 30 Chinese internet finance companies having received C-round funding (25thNovember 2016).


Rupaiya Exchange raises $ 200,000 in funding (Business Standard), Rated: A

Rupaiya Exchange, a peer-to-peer (P2P) lending aggregator, has raised USD 200,000 (about Rs 1.36 crore) in angel funding from a group of high-net-worth individuals (HNIs) and professionals.

The company, which began its operations in November last year, has developed proprietary technology to assess users registered on its platform and perform credit checks on the borrowers.

The information is then shared with lenders which includes banks, non-financial companies (NBFCs) and individuals.

i-lend.in signs pact with Cove Ventures (India Info Online), Rated: A

Hyderabad-based i-lend.in; one of the best performing company in the nascent Peer 2 Peer (P2P) / Alternate Finance and UK-based Cove Venture, a leading Big Data solutions provider entered into a strategic agreement.

Under this strategic agreement, both firms will apply Artificial Intelligence, Deep and Machine Learning algorithms in the Indian Alternate Finance & P2P Lending industry to ensure more people in urban and rural India get access to credit at moderate interest.

The models will help improve the predictability by analyzing online, social and financial behaviour thereby enabling I-lend with significant accuracy. This predictability will help in pricing loans, opening up new segments and deliver better financial performance.


George Popescu
Allen Taylor

Tuesday October 18 2016, Daily News Digest

Tuesday October 18 2016, Daily News Digest

News Comments Today’s main news: Korean company Hanwha Life Insurance acquires 4% stake in Lending Club. American Bankers Association partners with Accenture to publish a playbook for banks who want to partner with FinTech companies. Today’s main analysis : Insurance technology is the next FinTech frontier.  The African financial services industry is making great strides in changing […]

Tuesday October 18 2016, Daily News Digest

News Comments

United States

United Kingdom





  • Africa is undergoing some interesting FinTech changes. In fact, technology is revolutionizing how money is handled and business is conducted in one of the most unexpected places of the world. AT: “It will interesting to see how FinTech transforms banking in Africa and whether it could lead to an increase in power and posture for a part of the world that has long been on the underside of the global power structure. This analysis is a must-read.”

News Summary


United States

ABA, Accenture Release ‘Playbook’ for Banks on Fintech Strategy (Banking Journal), Rated: AAA

As banks continue to grapple with a rapidly evolving technological environment and the massive growth of fintech startups — and with billions of dollars in revenues at stake — the American Bankers Association and Accenture today released a members-only Fintech Playbook to help banks understand how and when they can most profitably partner with fintech companies. ABA also launched ABA Fintech as an online hub for all the association’s resources on fintech.

According to Accenture, banks that invest in fintech stand to gain up to $20 billion collectively in operating income by 2020, while those that don’t could lose as much as $15 billion in revenues during the same period.

The playbook offers a four-phase approach — establish a baseline, close gaps, focus on the customer and drive transformational change — that addresses channels, lines of business and bank platforms and processes. It also includes sample worksheets to help identify strategic priorities, identify top IT investment priorities and select potential fintech partners.

How to win in the game of odds in the next fintech frontier — insurance (TechCrunch), Rated: AAA

Insurance technology is getting very popular among founders and investors, yet, as a category, is little understood.

Insurance is one of the most difficult businesses to start, because, well, the regulators don’t actually want new players in the market. The reason for this is risk — insurance is all about having a strong system and balance sheet to manage risk. However, as a result of its difficulty, insurance is now behind the times in terms of technology. This leads to a perfect storm to disrupt the industry.

Oftentimes product development cycles can be 3-5 years. In startup world, that’s an eternity and back. Meanwhile, there is $1.2 trillion in insurance premium written every year in the U.S.

The key to unlocking the insurance industry is understanding behavioral economics. Behavioral economics is the study of behavior and how it impacts purchasing.

Given the size of the market you clearly can create a win-win situation. For example, in auto insurance, even out of those who shop for carriers, more than 71 percent of people stayed with their carrier in 2015.

The most successful players in insurance tech will win by rounding the edges on existing products.

Hanwha Life acquires 4% stake in US loan company Lending Club (Korea Herald), Rated: A

Hanwha Life Insurance has acquired 4.1 percent stake in Lending Club, a US peer-to-peer lending company for 75 billion won (US$66.24 million), it reported on Oct. 17.

The insurance arm of Hanwha Group has a strategic partnership with Lending Club and “thought that its stocks were undervalued after its stock price was slashed due to the recent scandal involving its CEO, and purchased the stake,” said an official.

The distinct advantage of utilizing section 1031: The taxes could be deferred indefinitely (New York Real Estate Journal), Rated: A

A real estate investor, if fortunate comes to a point where they want to sell a property at a profit. Many investors know they may be able to utilize Internal Revenue Code Section 1031 and exchange their property for a replacement property, in turn deferring the capital gains. This has been one of the cornerstones of real estate investing because the deductions taken to make income tax deferred while owning a property also reduces cost basis. Distinct advantage of utilizing section 1031:  As long as the rules are followed each time an investor sells and subsequently buys a property, the taxes can potentially be deferred indefinitely. At the time of death, your heirs will generally receive a stepped up cost basis to the current market value of owned property, regardless of how many exchanges the investor may have done in the past (depending on the total market value of the estate).

Now, while most real estate investors know how to take advantage of a 1031 exchange in the traditional sense, there is an option to invest in an alternative structure and still defer the gains.  This is called the Delaware Statutory Trust or (DST). A DST gives investors another avenue to take advantage of the tax code while still staying within the parameters of the 1031 requirements.

The underlying real estate in a DST may be any asset class including, multifamily, office, retail, self-storage or industrial properties.

FTC Announces Agenda, Panelists for Oct. 26 FinTech Forum on Peer-to-peer Payments and Crowdfunding (FTC), Rated: A

The Federal Trade Commission has announced the agenda for its upcoming FinTech forum examining peer-to-peer payments and crowdfunding. The forum, which is the second in an ongoing event series, will take place from 1:00 p.m. to 4:30 p.m. on Oct. 26 in Washington, DC.

The half-day forum will feature two panel discussions. The first panel will explore peer-to-peer payment systems, the online services – often mobile apps – that allow consumers to exchange money electronically. The second panel will examine crowdfunding, the use of online platforms to fund a project or venture by raising money from a large number of people. Both panels will discuss the important trends in these industries, as well as their benefits and potential risks for consumers.

In addition to these panel discussions, the FTC’s Office of Technology Research and Investigation will give a presentation examining crowdfunding practices and the types of information available to consumers about crowdfunding campaigns.

Full details are available on the workshop’s webpage. The workshop will be webcast live on the FTC’s website.

Fintech Trends: Collaboration (FinLeap), Rated: A

With Fintechs growing stronger every day by taking a bigger part of the financial market, banks have become more open to collaborations with these young companies. Those collaborations present a great opportunity for banks not only resulting in increase of revenue, but most importantly innovation.

Studies show that many banks have already established partnerships with Fintechs. According to the UBS bank management survey of 61 big banks, 38% have a partnership already – a number that’s only going to rise in the upcoming year.

Not only do Fintechs gain benefits from collaboration, but also banks. The first benefit is simple: revenue.

Collaborations between banks and Fintechs can be very beneficial, but they are also very challenging as the organizational cultures between the two differ greatly.[5] This means that culturally, banks and fintechs will have to adapt to each other while trying to avoid unnecessary dependence.

How To Value Boston’s Faneuil Hall And Other Questions Fintech Could Answer (Forbes), Rated: A

Ryan Williams surveys the room: how many people could put a price tag on this building?

His question, it turns out, is a bit of trick. This building is Boston’s historic Faneuil Hall, which will never come up for sale.

On Monday, the market building constructed in 1742 was host to the Forbes’ Under 30 Summit where Williams spoke on a panel about how financial technology is shaking up stodgy industries. Williams’ co-panelists hail from different segments of fintech, but each touched on variations of  his broader point: technology is expanding access to financial information and in turn broadening financial opportunity.

Vlad Tenev argues that Robinhood, the free mobile stock trading app he co-founded, exists to get people investing as young as high school. This way they won’t be so clueless when it comes time to invest for retirement. Daniel Aisen, head of quantitative strategy at stock exchange IEX Group, notes that his company is pushing institutional investors to look closer at what is happening behind the scenes of their trades with the ultimate goal of making buying and selling stocks fairer for everyone. And SoFi, where Michael Tannenbaum is senior vice president of mortgages, is part of a group of new lenders using expanded data sets to broaden who they can give money to.

While financial technology has gained clients, accolades and venture capital dollars in recent years, high stakes separate these young financial leaders from many other young technology stars. If they get it wrong real peoples’ livelihoods, retirements and homes could be at stake. This is why all four panelists agreed that gaining domain expertise is key before starting a fintech business. They also largely agree that the evolution of finance will not come from throwing out everything that came before.

Class is Back in Session at Fintech University (BBVA), Rated: B

Some of the best-known names working on finance’s new frontiers come together this Monday in one of technology’s most important cities for the second edition of Fintech University.

The one-day gathering at San Francisco’s Bently Reserve is hosted by BBVA’s Open Innovation team, and features fintech entrepreneurs from around the globe.

Some of the hottest topics in fintech will be discussed at the second edition of Fintech University, including payments, lending, Know Your Customer (KYC) and authentication, and regulation. Fintech luminaries such as Socure’s Johnny Ayers, Prosper’s Ron Suber and Coinbase’s Fred Ehrsam will be leading and participating in the discussions.

While Fintech University has sold out, interested parties can follow along by checking out #FintechUniversity on Twitter.

United Kingdom

Amazon Echo and the future of financial advice technology (Professional Adviser), Rated: A

Amazon Echo is a hands-free speaker you control with your voice. In case you missed the news, having been available in the US for two years, its long anticipated UK launch took place at the end of last month to much fanfare and excitement.

So what does a speaker have to do with financial advice?

Today, an adviser business may need to enter the same data 21 times into 21 different systems. This sounds mad but, worryingly, it is not that unusual.

In drawing together multiple systems and tools, Echo demonstrates the potential of a connected advisory world. A single system, for example, that links to multiple investment platforms, keeps you informed about tasks and diary events, provides client information, manages business finances – and all though a single interface.

Can we expect a financial adviser version of Echo any time soon? The concept of integrated technology is available in the adviser world already.

Robo-advice would have flourished without RDR (FT Adviser), Rated: A

Robo-advice and the drive to automation would still have happened even without the catalyst of the Retail Distribution Review, experts have claimed.

Steve Thomas, professor at Cass Business School, said the disrupting advance of technology would have still forced a change in the financial services sector, even if the RDR had not taken place.

He highlighted how the advisory marketplace had shrunk from approximately 200,000 advisers in the UK in 1990 to approximately 25,000 qualified regulated financial advisers today.

Landbay launches new range of lending products for professional landlords (Property Wire), Rated: B

Peer to pear lending platform Landbay which specialises in buy to let mortgages has launched a new range of limited edition lending products aimed primarily at professional landlords.

The new tracker products have a competitive rate, no Early Redemption Charges (ERCs) and will be available exclusively via Landbay’s approved broker partners, in addition to the existing suite of both Fixed and Tracker rate products.

Landbay champions a bespoke, flexible and fast lending process, which it believes benefits borrowers in its speed of service and its competitive pricing. To date, Landbay has lent over £42 million since 2014, over 241 loans with 0% facing repayment difficulties.

Established in 2013, Landbay was the fastest growing online peer to peer lending platform in 2015.

Rebuilding the financial services industry takes the best of both (Real Business), Rated: A

The financial services sector is broken. However, it is not broke. It still generates enormous revenue, but it does so within a system that is quickly becoming unsustainable.

From Santander referring businesses to peer-to-peer lending platforms, to Zurich’s creation of a digital workplace – established players are looking to create new efficiencies, and provide greater convenience, customisation and reduced costs.

For something to become truly, disruptively innovative, it must be embraced by the mass market. And although fintech is booming, I’d argue that it still remains the province of early adopters. Many promising fintech startups have already failed due to the big gap between those early adopters and the mainstream market, and the gulf in behaviours between the two.

How come? Well, in financial services, probably more than in any other sector, it’s especially difficult to overcome the forces of inertia and trust. After all, there are few things in life more serious than money – and if someone’s going to place their savings or investments in the hands of a company, they’ll want to have confidence that the company they choose has the scale and longevity to keep their hard-earned cash safe.

SME’s beginning to rely on alternative finance in post financial crisis Britain (Huddled), Rated: A

Recent studies have shown that the Alternative Finance industry is providing SME’s with more flexible funding opportunities and much better terms for businesses. Back in 2015 Nesta revealed that the market had grown by £3.2 billion, highlighting its rapid expansion, and things look set to continue in a similar fashion.

A lot of SME’s struggle with having their invoices tied up for up to 90 days. This can create a problematic cash flow gap which can hinder businesses on a day-to-day basis. Market Invoice is becoming one of the main providers enabling businesses to release up to 90% of their invoices before the typical 90-day period.

The UK government has invested in a variety of different recent schemes and programmes to support SMEs financially. There are now a variety of different options available, from loans to investment schemes and development programmes, which businesses can take advantage of to help them out.

Short term business loans offer a much more flexible alternative for businesses, giving SME’s the opportunity to draw the funds as and when needed as opposed to taking a lump sum in one go. This proves to be a handy resource and quick fix for SME’s experiencing unexpected cash flow problems.

Crowdfunding platforms are more popular than ever before. With so many different online platforms available for donation crowdfunding SME’s can reach out to people around them and other via the power of social media to ask for any donations towards their cause.

With interest rates set to stay low and so many different types of alternative finance now available, there is a huge potential for new businesses to establish themselves in 2016.

Oinky focuses on ways to automate and simplify saving (Pensions & Investments), Rated: B

Conrad Holmboe left his position at U.K. investment consultant Redington over the summer, where he was a director in the investment consulting business, to work on Oinky, a digital piggy bank. Oinky connects to an existing bank account, determines how much a user can safely afford to save every week, and automatically transfers those savings to the piggy bank.

Mr. Holmboe is chief operating officer, chief financial officer and co-founder of Oinky alongside Ivan Soto-Wright, who also is CEO. Mr. Soto-Wright left Redington last year, where he was an investment consultant.

Oinky also has a “discover” feature, which lets savers explore peer-to-peer lending opportunities, investment platforms and other savings products.


Banks, AMP baulk at cost of financial advice watchdog (The Australian), Rated: A

The big four banks and AMP will contribute nearly $16 million to fund the creation of the federal government’s professional standards body for financial advisers, part of reforms unveiled yesterday by Financial Services Minister Kelly O’Dwyer.

The $15.6m bill to cover the first four years of the program has ­already faced resistance from the banking industry, which constitutes only 25 per cent of the financial advice market.

AMP, which represents Australia’s largest network of financial advisers, is also pushing to expand the financial burden of the standards body to be shared by the rest of the industry.

An independent standards body will be established as a commonwealth company and a nine-member board will seat three consumer advocates, three industry members, an ethicist, an education specialist and a chair. The professional associations, such as the Financial Planners Association, will compete to run the body, which will oversee the country’s 22,500 advisers.

FPA head of policy Ben Marshan said the reforms provided ­financial planners with an appropriate amount of time to adjust to the new system. The education and professional standards regime will come into force at the start of 2019.

Australians are using peer-to-peer loans to consolidate their debt (Finder), Rated: A

Peer-to-peer (P2P) lending, while having first been introduced in 2012, is still a new concept to many Australians. However, the idea seems to be catching on. The P2P lending space is becoming more competitive, with new lenders being announced all the time, and more Australians are starting to take advantage of the competitive rates on offer. According to new data, these rates are being utilised by borrowers looking to reduce the interest they’re paying on current debts.

RateSetter customers that are using their loans to consolidate debt:

  • $20,666 – Average loan amount for debt consolidation
  • 8.23% – Average annual rate for debt consolidation loans
  • 725 – The number of people earning between $50,000 and $100,000 that held debt consolidation loans
  • 64.5% – Percentage of males applying for debt consolidation loans

Move to lift professional standards of financial advisors backed (Professional Planner), Rated: B

The SMSF Association strongly endorses the Federal Government’s decision to legislate to improve the professional standards of financial advisors.

Association Head of Policy Jordan George says improving the educational and ethical standards of financial advisors has been a long-term policy of the organisation, especially as it relates to the $622 billion self-managed super fund (SMSF) sector.


Stored Value Facilities : Changing the fintech landscape in Hong Kong (Bryan Cave), Rated: AAA

Last November the Clearing and Settlement Systems Ordinance was amended and renamed as the Payment Systems and Stored Value Facilities (SFV) Ordinance (“Ordinance”). The Ordinance sees the implementation of a mandatory licensing system for stored value facilities, and was subject to a one year transition period. This grace period will end on 13th November 2016, after which any stored value operator not holding a licence will have to exit the market or face heavy penalties.

In general, a SFV involves the pre-payment to or storage of the value of money (or money’s worth) on a payment facility, which may be used for paying for goods or services or to another party. This includes smartcards, such as gift cards or top-up cards, through to wearable technology such as watches to non-device based SVFs that store the value of money on mobile and internet based accounts, such as e-wallets.

The Ordinance requires all multi-purpose SVFs to be licensed. Single-purpose SVFs do not have to adhere to the Ordinance, so you may rest assured your pre-paid coffee card will still work after 13th November.

The implementation of the Ordinance sees a significant shift in Hong Kong’s payment’s landscape.

More than 20 companies have applied to the HKMA for SVF licenses with 50% Hong Kong-domiciled companies and 68% engaged in the prepaid card business. Howard Lee, senior executive director at the HKMA, advised that the decision to include only five operators at this point did not mean the remaining applicants had been rejected. We expect to see more licences granted before or after 13th November.

SuperCharger FinTech Accelerator Renews Partnership with Hong Kong Exchange & Clearing (Crowdfund Insider), Rated: A

Hong Kong-based SuperCharger FinTech Accelerator has renewed its partnership with Hong Kong Exchange and Clearing (HKEX).

SuperCharger FinTech Accelerator was launched in January 2016 with big success seeing a USD $71 million capital investment in accelerator participant MicroCred secured for its expansion in China and the development of their internet finance strategy.

Applications for SuperCharger FinTech Accelerator 2.0 are open until 20 October 2016 both early stage and later stage Fintech firms may apply.


Barclays launches fintech accelerator programme with 10 fintech startups (The Economic Times, India Times), Rated: AAA

Rise Accelerator, a FinTech- focussed accelerator programme started by Barclays announced its first cohort today, comprising 10 FinTech startups.

The fintech accelerator will provide the selected startups with access to the bank’s technology, insight and expertise via onsite mentors and advisors. It will also enable them to access the international markets.

The 10 shortlisted startups included 4 from Bangalore, 2 each from Mumbai and Delhi and 1 each from Chennai and Hyderabad. The startups focussed on a host of areas like Artificial Intelligence, Data Integration, Predictive Lending etc to solve real time problems associated with the banking and financial sectors.

The London headquartered lender is also planning to support these nascent financial technology companies as an early stage investment which can reap them big returns if they go on to make it big in the emerging fintech space both in India as well as globally.

Online P2P lending marketplace Rupaiya Exchange fast emerging as a game changer in India (The Hindu Business Line), Rated: A

Putting an end to redundant lending processes in India, Rupaiya Exchange, a leading online peer-to-peer lending platform, is changing the face of the money lending industry. With its pan-India presence, Rupaiya Exchange serves as a marketplace for a wide range of peer to peer (P2P) lending activity including Consumer-to-Consumer loans, Business-to-Consumer loans, and Business-to-Business loans. The service portfolio of the company includes short-term as well as long-term loan instruments which can be either be secured or collateral-free, as per the user requirement.

The platform also holds the distinction of being the first company to introduce a lender’s protection scheme in India.

Fintech companies like BankBazaar promise smarter profits from mutual funds (The Economic Times, India Times), Rated: A

Investing in a mutual fund is considered a smart option, especially for first-time investors, and several fintech startups are looking to make the process simpler and attractive for individuals.

BankBazaar, which has a Sebi-registered investment-adviser licence, is set to use robo-advisory technology, which entails minimal human intervention in financial advice, to help customers invest in the right mutual funds. The feature will be live internally on October 30 and can be used by the public from November 17, CEO Adhil Shetty told ET.

Digital payments startup Trupay will launch a feature this month for real-time investment in mutual funds using its UPI integration.

Zerodha offers a choice of the bestperforming mutual funds, which Nithin Kamath, CEO of Zerodha, said the company is allowed to do using its stockbroker licence, and also uses a simulated systematic investment plan (SIP) to let users customise their investments based on markets instead of fixed periodical investments.

Fintech firm Lendingkart acqui-hires loans marketplace KountMoney (Tech Circle), Rated: B

Fintech startup Lendingkart Group has acqui-hired KountMoney, an online lending marketplace for personal loans, to boost its technology and data analytics capabilities.

Acqui-hire refers to the buyout of a company primarily for the skills and expertise of its staff, rather than for its products or services.

KountMoney connects borrowers and lenders, besides vetting loan applications through an algorithm. It forwards the vetted loan applications to suitable lenders in its network, who take the final call. It also helps borrowers in choosing lenders and submission of documents.


NFC FinTech Banking Technology and Speed (Finextra), Rated: AAA

Abstract – African financial services industry is in the midst of extraordinary change more and more of the population is becoming part of the formal financial system with mobile technology driven inclusion but still large portion of the market still remains untapped. The race/efforts by nonbank organization’s are still on to find innovative ways to get excluded customers on board. Included consumers are looking for everyday convenience, while businesses are looking for a competitive edge thus resulting in a new breed of products and next-generation payment options. At the same time many consumers still needs to answer for their questions like what do I do on Internet banking, with NFC sticker on back of my $10 mobile phone, with easy solution, open and integrated design technologies?

Introduction- With NFC any device can be a payment device.

NFC or any similar technologies are neither new nor a revolutionary innovation its in existence on this planet since decades, but not all of us are aware to make use of this for payments (Ok I agree most of us are). Mobile payment using NFC has been around for a long time but banks and retailers are hesitant to participate due to fear of low adoption rate.

Main Story – Using combination of technologies like mobile device, bitcoin, blockchain, fintech companies are building Internet of value. The question then is what does this means for financial institutions, governments and citizens.

The challenge to NFC is the cost of devices (Handsets & Receiving devices). Some brands do not take time to invest fully as Apple does.

Security is an integral component of all payments, as sensitive data need to be protected from any fraudulent parties. The card associations have created a set of rules and security standards, which must be followed by anyone with access to card information including gateways. This set of rules and security standards is called the Payment Card Industry Data Security Standard. To add security for both subscriber and merchant (Yes at business cost), as in any financial transaction that’s the golden Key.

Banks will certainly have to judge whether the massive investment they could make, in order to challenge the spreading popularity of payment systems such as PayPal, will be worthwhile, given that PayPal has gained ‘first mover’ advantage and that as highly-regulated financial service companies with duties to both national and continental authorities, they have to abide by stricter rules and security protocols. They must also judge whether their customers will move with them into a new more agile, flexible and electronic future, or whether a majority of people actively prefer the new, low cost (or free) services that have sprung up as part of the digital revolution.

Conclusions- Although we have made great strides to expand access to financial services through new technologies and innovative business models, the gender divide stubbornly persists in most emerging markets.

Time has now come for banks and other entities with an interest in financial service provision, to step up as one single team, exploit technology and leverage on existing MNO infrastructure to acquire customers, enrich use cases, lower costs and increase revenue especially in markets where regulators (such as reserve banks) play a dominant role.


George Popescu
Allen Taylor