Wednesday June 21 2017, Daily News Digest

Mountain View

News Comments Today’s main news: DBRS takes rating actions on SoFi consumer loans. Relendex secondary trading platform tops 1M GBP. Xeenho closes new round of financing. Today’s main analysis: The current state of MPL in Japan. Today’s thought-provoking articles: Vanguard takes robo-advice to $65B. Female entrepreneurs more cagey about post-Brexit. 5 ways financial apps are changing banking. United States […]

Mountain View

News Comments

United States

United Kingdom

China

European Union

Australia/New Zealand

Asia

Africa

News Summary

United States

DBRS Takes Rating Actions on SoFi Consumer Loan Programs (DBRS), Rated: AAA

DBRS, Inc. (DBRS) has today reviewed seven ratings from four SoFi Consumer Loan Program U.S. structured finance asset-backed securities transactions. Of the seven outstanding publicly rated classes reviewed, six were confirmed and one was upgraded. For the ratings that were confirmed, performance trends are such that credit enhancement levels are sufficient to cover DBRS’s expected losses at their current respective rating levels. For the rating that was upgraded, performance trends are such that credit enhancement levels are sufficient to cover DBRS’s expected losses at their new rating level.

RATINGS

Issuer Debt Rated Rating Action Rating Trend Notes Published Issued
SoFi Consumer Loan Program 2016-1 LLC Class A Notes Upgraded AA (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-2 LLC Class A Notes Confirmed A (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-3 LLC Class A Notes Confirmed A (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-5 LLC Class A Notes Confirmed A (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-2 LLC Class B Notes Confirmed BBB (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-3 LLC Class B Notes Confirmed BBB (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-5 LLC Class B Notes Confirmed BBB (sf) Jun 20, 2017 US

Vanguard rides robo-advice wave to $ 65B in assets (InvestmentNews), Rated: AAA

While much of the financial services industry has been fretting for the past few years over how to compete in the age of digital-advice platforms, The Vanguard Group Inc. appears to have cracked the code in a steady climb to more than $65 billion under management on its two-year-old robo.

Vanguard’s Personal Advisor Services, which is four times the size of the next-largest robo-platform, is a hybrid that incorporates human advisers and is starting to look like the blueprint for the way to leverage digital advice.

CleanCapital Closes Investment Round Led by FinTech Leaders and Pioneers (CleanCapital Email), Rated: A

CleanCapital, an online marketplace for clean energy investing, announced today the closing of the first round in Series A funding, as part of an ongoing capital raise. The new capital will allow CleanCapital to implement their technology roadmap and continue scaling operations, growing its team, and expanding opportunities for clean energy investing. CleanCapital’s proprietary platform has benefits that are two-fold, by creating opportunity for investment and increasing ease for project owners to exit their current portfolios. By reducing barriers both for the flow of capital and access to investments, CleanCapital is accelerating clean energy deployment.

To date, the team has financed over $40M of solar projects and more than 20 MW in operating solar assets. They have also received funding from industry leader John Hancock Life Insurance to finance numerous assets. CleanCapital has created a unique algorithm to efficiently scrub and value projects so that only the best investment opportunities are included in investment portfolios.

Investors include FinTech leaders and pioneers such as Ron Suber, President of Prosper Marketplace, Jon Barlow, Founder of Eaglewood Capital Management, and Bradley Pattelli, Former Chief Investment Officer of LendingClub. In addition, the company was recently selected to be featured on leading startup fundraising platform SeedInvest which historically has accepted just 1% of startups applicants.

Transparency A Growing Concern for Alternative Investing (Plan Sponsor), Rated: A

The study shows transparency continues to lead all investment considerations and has significantly grown in importance following the financial crisis of 2008.

“Degree of transparency” was cited as very important by 63% for alternative and 62% for traditional investments. It was also cited as the most important post-investment consideration by 21% for traditional assets and 17% for alternatives, compared to 9% and 3%, respectively in pre-crisis.

Tech Gap Widens Between Haves, Have-Nots (Financial Advisor IQ), Rated: A

The gap between independent RIAs who are keeping up with evolving technologies and those who aren’t is widening. And that’s stunting growth for advisors who aren’t acting proactively to keep on top of a rapidly evolving marketplace.

At least that’s what Fidelity finds in a new study published Tuesday looking at industry trends in high-tech adoption. As part of its research into firms using the latest electronic tools – including everything from interactive website software to advanced CRM programs and integrated back-office systems – the custodian has developed a list of tech-savvy “eAdvisors.”

Fintech Brings Residential Real Estate To The Web (NASDAQ), Rated: A

However, there are a number of limitations that come with completing the mortgage application process entirely online. You likely won’t be able to complete the process online if you’re applying for a jumbo mortgage (for which the limit is $417,000 in most of the United States); if you’re self-employed with various sources of income; if you or a tax advisor manually prepared your taxes; or if you don’t have online accounts with all of your financial institutions.

Still, the option to purchase real estate quickly and easily online is very attractive for foreign buyers, investors, and modern, web-savvy homebuyers. Although completely online real estate transactions only represent a small fraction of the more than $2 trillion in annual real estate transactions worldwide today, the demand is growing, and it seems likely that a substantial percentage of homes will be purchased completely online within just a few years.

Selling a home online offers a number of notable advantages. Perhaps most importantly, you avoid using a real estate agent so you don’t have to pay the usual 3% to 6% commission.

The key disadvantage of a fully online transaction, of course, is the possibility of making some kind of mistake during the process that could cost you a chunk of money, or even the chance to purchase your dream home.

Suretly Brings Crowdvouching to the Lending Market, Announces ICO (Inside Bitcoins), Rated: A

New York-based financing startup Suretly has announced that its crowdfunding campaign is set for July 2017 launch. Suretly offers a safe new way to obtain a personal loan, through its unique ‘Crowdvouching’ platform.

Unlike traditional P2P lending platforms which require investors to co-sign for a percentage of the loan, Suretly’s crowdvouching system requires a much larger number of backers to secure the loan and in doing so, substantially reducing the individual risk of all parties. Suretly is currently focused on short-term loans, and the platform has already been called the “Tinder for Microloans.”

The company’s ICO will give all investors an opportunity to purchase the platform’s SUR tokens and contribute towards the growth of the crowdvouching project.

GDS Link Joins Marketplace Lending Association (PRWeb), Rated: B

GDS Link, a global provider of risk management solutions and consulting for multiple verticals within the financial services industry including marketplace lending, retail finance, alternative financial services, credit card, auto, and business leasing, today announced that it has joined the Marketplace Lending Association (MLA) as an associate member.

Lending Club’s Dolan Joins Metromile in California as Chief Financial Officer (Insurance Journal), Rated: B

San Francisco, Calif.-based Metromile has named Carrie Dolan chief financial officer.

Dolan most recently served as CFO of Lending Club, an online credit marketplace connecting borrowers and investors. Prior to Lending Club, Dolan was with Charles Schwab & Co, where she was senior vice president and treasurer and CFO of Schwab Bank. Early in her career, Dolan held various financial positions at Chevron.

Eight Fledgling Fintech Providers Win Capital with CFSI Awards (Paybefore.com), Rated: B

Eight fledgling fintech companies have won $250,000 each from the Center for Financial Services Innovation.

  • Blueprint Income, which offers a pension anchored on “a simple, pre-determined income stream backed by insurance companies.”
  • Dave, whose product “alerts consumers ahead of an upcoming overdraft and can instantly advance up to $75 at 0 percent interest to prevent overdraft fees.”
  • EverSafe, which monitors bank and investment accounts, credit cards and credit reports, and then alerts older consumers and their relatives to irregular activity.
  • Grove, which offers personalized financial advice and comprehensive financial plans that are “within reach for everyone.”
  • Nova, a firm that “has built the world’s first cross-border credit reporting agency by building data partnerships across the globe,” a product that can help immigrants gain credit.
  • Point, described as “an alternative to traditional home equity loans and home equity lines of credit.” The company buys into a fraction of a consumer’s property, paying today for a share of the home’s future appreciation.
  • Token Transit, a mobile app that “enables low-income riders to have convenient access to the transit passes they need. Riders are able to pay using a credit, debit or a prepaid debit card.”
  • Tomorrow, which provides “long-term financial security to busy millennials and working families.”
United Kingdom

Relendex’s Secondary Trading Platform Tops £1 Million (Crowdfund Insider), Rated: AAA

Relendex, a secured peer to peer lending platform, has announced that its secondary market trading has surpassed the £1 million mark.

Relendex says this indicates that lenders have embraced the secondary platform. On the Relendex Resale Marketplace investors are able to buy and sell Loan Parts at par with no fees charged.

Female entrepreneurs more cagey about post-Brexit prospects (P2P Finance News), Rated: AAA

A poll by the peer-to-peer lender shows that less than half as many female business owners are confident about the success of their businesses post-Brexit, compared to their male counterparts.

The research, conducted by RateSetter Business Finance, has revealed that only 10 per cent of women business leaders believe that leaving the EU will be positive for their business.

This contrasts with 21 per cent of male business owners who have an optimistic outlook about their ventures after Brexit.

Additionally, 32.7 per cent of female business owners want to find a lender that understands their business and business model, compared with just 19 per cent of men.

TrueLayer raises $ 3M Series A to provide fintech companies with easy access to bank APIs (TechCrunch), Rated: A

TrueLayer, a London startup that’s built a developer platform to make it easy for fintech companies to access bank APIs — and ride the PSD2 gravy train — has raised $3 million in Series A funding. The round was led by Anthemis Group, with participation from existing investor Connect Ventures, and will be used by TrueLayer to expand its team and increase coverage of supported banks before opening up beyond beta testers later this year.

Launched in private beta in February, the TrueLayer developer platform currently supports things like account verification, KYC processes, and accessing transactional data for account aggregation, credit scoring, and risk assessment. It is available in the U.K. and Simoneschi says TrueLayer will expand to other EU countries later in 2018.

Soldo, a London fintech startup that offers a multi-user spending account, raises M led by Accel (TechCrunch), Rated: A

Soldo, the London-based fintech startup that offers a multi-user spending account, first launched for consumers and since tailored to businesses too, has raised $11 million in Series A funding. Venture Capital firm Accel led the round, with participation from Connect Ventures, InReach Ventures, U-Start and R204 Partners.

Creathor Venture and private investors invest CHF 2.5 million in PropTech company Allthings (IT Business Net), Rated: A

Creathor Venture, a pan-European venture capital firm, together with a circle of experienced private investors from the real estate industry invest CHF 2.5 million in German-Swiss property tech company Allthings Technologies AG. Allthings connects tenants, owners, property managers and developers of living and commercial property through a modular communication and service platform.

Zorin hires ex-Funding Circle underwriter (Bridging & Commercial), Rated: B

Colin Chung (pictured above) has been recruited as an associate director in the credit risk team, while Katy Katani (pictured below) has joined as head of business development.

Colin was previously at Funding Circle, where he was a senior property underwriter, and has over 10 years of experience in real estate finance.

China

Xeenho Closed a New Round of Financing for its Business Transformation (Xing Ping She Email), Rated: AAA

On Jun 20th, Xeenho announced to have finished their third round of financing. This round of financing was led by Hongshang Capital, with Jade Value and Hunan Culture & Art Industry Group participated. The financing amount was again reached to tens of millions of yuan. All the funds have been in place, and they are in the process of handling business changes.

Started as one of the first P2P loan funds in China, Xeenho has an accumulated volume of nearly 3 billion RMB to date. The excellent risk control and the big data application in fintech constitute the core value of Xeenho. Based on its self-developed IFRM risk control and big data system, Xeenho keeps the record of Zero Bad Debt, which makes the company developed as a guidance for due diligence, P2P rating, research report, P2P asset portfolio allocation for clients and investors.

In 2016, Xeenho launched a new Robo-Adivisor product – Xeenho Zhi Tou, attracting capital for different P2P platforms, and Xeenho provides guarantee in this process. In the late of the same year, Xeenho set up self-media platform – Xing Ping She, aiming at building an industrial ecosphere and providing services which is specially designed for specific fintech companies.

This A round of financing would be a fresh start to Xeenho. Dr. Yang Li, the co-founder and CEO of Xeenho said, “After A round of funding, we will continue to focus on business in big data mining, equity investment and information consultation, and explore to develop new business at the same time. We hope to realize the development of collectivization in the next three years, so as to build a complete system of financial ecology and become one of the leading fintech companies.”

European Union

Bank to the future: five ways financial apps are changing banking (Banking Technology), Rated: AAA

  1. Banks will face stiff competition from new wave of fintech start-ups – In the UK it is firms like Bean, Ernst, Moneybox, Pariti and Plum, to name just a handful, and this picture is repeated across Europe.
  2. New open data initiatives will mean unparalleled access to consumer data – In the UK, PSD2 is being delivered by the Open Banking project. Alongside this the Treasury is running the Pensions Dashboard project, which will liberate customer data on long-term retirement savings in the same way.
  3. New services will revolutionise who people trust for financial advice
  4. Personal finance dashboards (PFDs) will open the way for long-term savings as well as short-term financial management – Pensions dashboards already exist in many other European states including Denmark, the Netherlands and Sweden.
  5. The workplace will be key to the new market – In practice, the workplace is likely to be a highly successful channel for such services complementing employers’ pensions and employee benefits delivery. In the UK, auto-enrolment means nearly all employees will soon be members of a workplace pension scheme.
Australia/New Zealand

Robots closer to getting go-ahead to give financial advice to humans (Stuff), Rated: AAA

Getting personalised financial advice from a “robot” may be a step closer to becoming reality.

The Financial Markets Authority has asked for feedback on whether it should use its powers to allow personalised financial advice generated by a computer programme or algorithm.

Under current law, personalised advice, which takes into account an individual client’s financial situation and goals, can only be delivered by a human being.

Asia

The Current State of Marketplace Lending in Japan (Lend Academy), Rated: AAA

Marketplace lending growth in Japan has been slow compared to the U.S., Europe and China but that has started to change in the past three years. The market has been almost doubling each year and we expect this trend to continue through 2017. Investment volume was $140 million in 2014, $310 million in 2015 and $530 million in 2016. We estimate it to reach $1 billion this year.

Marketplace lending, also commonly referred as “social lending” in Japan, started as p2p lending around 2008 but struggled due to high default rates, which sometimes reached 30%. Since Japanese lending law prohibits interest rates above 15% in most cases, a 30% default rate was not sustainable for those businesses.

The industry average APR increased to 8.4% from 5.7% in two years, mainly due to newer entrants that were charging higher APRs. Default rates in the past three years have been close to zero due to platforms being more selective on who they lend money to.

Based on our research, average spread (i.e. margin) for crowdfunding platforms in Japan is 4%-5% annually. Typically crowdfunding platforms are lending at 13% and funding at 8%. Based on this margin, a crowdfunding platform needs to service portfolio of between $50 – $100 million to be break-even. Only a few crowdfunding platforms have reached this scale, however given the current market growth, many players will achieve this volume after 1-3 years of being in business.

Africa

Consumer lending has dropped to ‘almost zero’ under new regulations – Rainfin CEO (Ventureburn), Rated: AAA

Consumer lending on marketplace lending platform RainFin has ground to a halt since the new National Credit Regulations threshold came into effect on 11 November, the company’s chief executive Sean Emery said yesterday.

Under the new threshold, lenders who lend even one cent to consumers have be registered with the National Credit Regulator to do so.

Authors:

George Popescu
Allen Taylor

Tuesday November 8 2016, Daily News Digest

fintech

News Comments Today’s main news: Lending Club Q3 results and $1.3 bil deal with Credigy. The Forbes FinTech 50. Today’s main analysis : The size of the UK FinTech market by transaction value. Today’s thought-provoking articles: States take action on FinTech rules. A warning for FinTech. Regulators in Australia, Canada sign co-op agreement. China tops global FinTech. […]

fintech

News Comments

United States

  • Good Q3 for Lending Club. GP : “Lending Club’s Q3 origination at practically $2bil is very close to Q3 2015 which was $2.24bil. As mentioned before, the crisis put LC back about 1 year and unless there are other surprises on the way, it is back on track. My main concerns are the lack of emphasis on the p2p aspect. P2P is what built Lending Club, nothing else. And of course the need to find the next borrower pipeline beyond credit card refinancing via direct mail.”
  • Lending Club gets a big investment. GP:”Lending Club lands an investment deal from Credigy, a subsidiary of the National Bank of Canada, for $1.3bil. Well done. ” AT: “Following on the heals of the OnDeck news from yesterday, Lending Club’s status proves there’s nothing wrong with online lending as a sector.”
  • The Forbes FinTech 50. AT: “This is a list to look forward to every year. This year, there are the usual mainstays, but you’ll see some new names too.”
  • States eye their own FinTech regulations. AT: “Most of these are go after digital currencies or blockchain technology. The significance is that states consider FinTech worth of regulating, which could lead to a power play between Washington and some states as more interest in taken in the FinTech sector regarding regulation.”
  • Commercial real estate crowdfunding. GP: ” The online real-estate flip loan market is getting crowded. I really believe in the online real estate market, I just wish they would be able to offer different products. If a yield of 10% is needed why not look at offering Real Estate investments with leverage ?”
  • A former Bear Stearns trader takes an interest in MPL. GP: “An interview with DV01 whom we covered as well previously. A very interesting firm. “
  • FinTech in the capital markets. GP : ” This was news in 2007. Right now I am not sure how interesting it is.”
  • Square Capital hits $1 billion mark. GP: ” This is interesting compared with Lending Club’s volumes to date , about $20bil, and OnDeck’s volumes
  • Developers return to RealtyShares. GP: ” I am glad to hear however this PR sounds rather bad. It is expected they would return. Why is this news? This makes people think: was there a doubt they will return ? I am not sure this is good PR. Just to be clear: I have absolutely no information either way about any return rate for Realty Shares borrowers/developers. “
  • InAuth wins FinTech award. GP:

United Kingdom

Australia

Canada

China

  • China at the top of global FinTech. GP: “China numbers, as far as we can trust them, are gigantic in comparison with the fintech industries in other geographies. Chinese Fintech is however still tiny in comparison to what it could become. London, Tokyo, Singapore, New York , Sydney, etc. have established financial industries which are lacking in China. This , combined with the internet, the Chinese government controls of institutions, has encouraged and will continue encouraging the growth of an internet based, decenrtalized, unregulated, fast and innovative financial sector, which we came to call Fintech. “
  • SuperCharger announces 8 new startups.

India

Asia

News Summary

United States

Investors shrug off more losses at Lending Club, (Financial Times), Rated: AAA

In the third quarter, net losses came to $36.5m. Scott Sanborn, chief executive, said that while the company had made “incredible progress”, noting a slight quarter-on-quarter rise in loan originations to $1.97bn, there was still work to be done. In the same quarter last year the company originated $2.24bn, short of the peak of $2.75bn in the first quarter this year.

Last month, Lending Club tightened its credit policies for the third time in six months.

Mark Palmer at BTIG said that $800m of cash at the end of the quarter, down $32m from June, should be “more than ample to provide the company with the time it will need to fully regain its footing”.

The Fintech 50: The Complete List 2016 (Forbes), Rated: AAA

Mobile app allows worker to get a portion of his paycheck, for hours already worked, deposited into his bank account before payday, with the fee for this advance set by the user.

Bona fides: Workers from more than 10,000 companies, including Apple, Wal-Mart and Starbucks have gotten advances.

Lending Club Gets Big Investment; No Incentives Needed In September (Investor’s Business Daily), Rated: AAA

Shares of Lending Club (LC) spiked Monday after the online lending platform reported Q3 results that beat estimates, said it didn’t need investor incentives in September, and landed an investment deal worth up to $1.3 billion.

That investment, from Credigy, a U.S. subsidiary of the National Bank of Canada, comes as Lending Club tries to diversify its funding after a difficult year. The money will be invested over the next twelve months, Lending Club said.

The company said that it entered September without the need for investor incentives, after offering them earlier this year in an attempt to prevent financial firms that buy Lending Club’s loans from fleeing. Lending Club had said earlier that it hoped to end the incentives by year-end.

States Take Action on Fintech Rules While Awaiting Guidance From Washington (Morning Consult), Rated: AAA

As federal regulators contemplate a new regulatory framework for financial technology firms, some states have taken their own approach to the burgeoning sector.

Many state fintech priorities center on digital currencies or the blockchain technology underlying them.

In North Carolina, a law enacted in July exempts virtual currency users and blockchain software providers from licensing requirements, a move that garnered praise from organizations such as the Chamber of Digital Commerce.

A Connecticut law “leaves substantial legal choices to the discretion of regulators,” said Peter Van Valkenburgh, Coin Center’s director of research, who compiled the state regulation tracker.

New York uses state-by-state licensing requirements, an approach the Chamber of Digital Commerce says is burdensome to companies using blockchain.

New Hampshire lawmakers introduced three bills on digital currency in 2015, but a Nov. 1 report from a legislative study commission recommended no legislative action on the matter in 2017.

Crowdfunding in commercial real estate (i2e), Rated: A

I had the opportunity to visit this week with Ashley Smith, who along with Tim and Marylee Strange, is adding convenience and efficiency to the fragmented commercial real estate crowdfunding platforms with their new company called CrowdSeekr.

Crowdseekr’s proprietary technology customizes searches of deals from multiple platforms revealing investment opportunities that match the investor’s desired results. We can be proud that a technology company right here in Oklahoma City is making its mark in this rapidly growing and maturing industry.

How An Ex-Bear Stearns Trader Is Helping Marketplace Lenders Avoid The Sins Of The Mortgage Bubble (Forbes), Rated: A

Rahbar’s startup currently tracks the loans of Lending Club and eight other originators and counts 55 institutions as clients. All told it has logged in some $34 billion in loans. DV01 is backed by $7.5 million in capital from Leucadia National (Jefferies’ parent), Pivot Investment Partners and a fund controlled by George Soros.

DV01 is paid two basis points on the principal amount for its services as a loan data agent, and buy-side investors pay a bit more for access to its analytics platform. Demand is brisk. Rahbar expects DV01 will serve as a data agent on three more deals by the end of the year. “When an investor tells a marketplace that they won’t invest without the data going to DV01, there’s no decision to be made,” says Ron Suber, president of Prosper.

Fintech in Capital Markets: A Land of Opportunity (BCG Perspectives), Rated: A

The financial technology (fintech) phenomenon first started to evolve in the capital markets (CM) industry more than 40 years ago. Today, accelerated both by the electronification of trading in the 1990s and the subsequent thrust of the entire financial services industry toward digitization, fintechs—which we define as firms that use innovative technology at scale to either enable or compete with other financial institutions—have experienced exponential growth in the CM domain.

Simply put, fintechs focus on creating new value propositions or improving existing ones. They help build capabilities that can enhance client relationships, reduce costs through automation and simplification, and facilitate regulatory compliance. They also enable disaggregation of the value chain as they become more embedded in the supply chain.

Square Capital Has Loaned Over $ 1 Billion To Small Businesses (Fortune), Rated: B

In addition to processing payments for merchants, Silicon Valley payments company Square has another growing business—lending. Square’s two-year-old lending arm, Square Capital, has lent $1 billion in cash advances and loans to more than 100,000 businesses, the company said Monday.

RealtyShares Reports: Several Developers Return to the Real Estate Crowdfunding Platform (Crowdfund Insider), Rated: B

On Monday, RealtyShares announced several developers have returned to its real estate crowdfunding platform for additional projects.

InAuth Dubbed Winner of Corporate LiveWire’s 2016 Fintech Excellence Awards (Crowdfund Insider), Rated: B

InAuth, a digital device intelligence company, announced on Monday its products received recognition for “Excellence in Providing Mobile-First Products for Authentication” at Corporate LiveWire’s Fintech Excellence Awards for the second year in a row. The company stated its products deliver intelligence capabilities to authenticate, reduce risk, remove customer friction, and help organizations around the global to maximize their digital transactions through mobile apps, mobile browser, and desktop browser.

United Kingdom

The Size of UK Fintech Market by Transaction Value (TechBullion), Rated: AAA

This year, the size of UK fintech market by transaction value is US$168,522m. According toStatista,transaction value will show an annual growth rate of 20.4 percent resulting in US$353,667m in 2020. “Digital Payments” is the largest market segment, with a transaction value of US$151,682m.

While determining the size of fintech market by transaction value, Statista takes into account digital financial services, digital payments, marketplace lending, Robo-advisors, online crowdfunding and venture financial.  The online research firm does not consider insurance related services, lead-generation business models/meta-search engines, B2B payments, API management, credit scoring, and blockchain technology.

A Warning for Fintech (Bloomberg), Rated: A

U.K. grocer Tesco shares took a hit after customer fraud forced its bank to suspend online transactions.

But the financial damage could spread far beyond Tesco. It’s easy to imagine how the rising financial cost of cybercrime could damage the big selling point for fintech firms and challenger banks: being able to acquire customers and operate at a lower cost than established rivals.

Wake me up when online lenders are done turning into banks (FT Alphaville), Rated: A

The new solution is basically this: Ratesetter will have the explicit right to divert interest payments and capital away from investors and into the provision fund:

We will update our Lender Terms in order to make it explicit that in times of severe stress the interest buffer would be available to the Provision Fund. This will allow for the interest received by every investor to be reduced equally and for this foregone interest to accrue to the Provision Fund.

So, for example, if the reduction was 20%, the total interest due to all our investors would reduce by 20% and this amount would instead flow into the Provision Fund. This period would be kept to a minimum duration and as soon as the Provision Fund Coverage Ratio was sufficiently strong, it would stop and return to normal.

If the outlook got worse and investors’ capital was at risk – not just their interest (in other words, the Capital Coverage Ratio was in danger of dropping below 100%) – then all investors’ capital would be reduced equally, as well as all of the interest. This capital and all interest would go into the Provision Fund to strengthen it.

Machine learning being scrutinised by Financial Stability Board (Out-Law), Rated: A

Svein Andresen, secretary general of the Financial Stability Board, announced that the FSB is “beginning work to understand the financial applications of machine learning” in a recent speech (4-page /157KB PDF) at the Chatham House Banking Revolution Conference.

“Much hype surrounds the development of fintech and for regulators it is essential to understand what developments are going to change the way financial markets operate and those that won’t,” Andresen said. “We have been explicit in our desire to look at both financial stability benefits and risks, so as not to bias our work against fintech. Regulators are acutely aware of the need to balance these issues and of the need to be proportionate. We need to monitor and act on risks as they emerge but we need to balance this against the need to allow the development of technologies that can provide real benefits for society.”

Battle between fintechs and banks a nonsense (Finextra), Rated: A

Daniel Marovitz, COO and President for Europe, Earthport, talks about how the trumped up story of conflict between banks and fintechs is resolving into a partnership approach, and discusses the regulatory, cultural and practical challenges for banks in implementing blockchain.

Watch the video.

London fintech startup Soldo launches multi-user spending account for families (TechCrunch), Rated: A

London fintech startup Soldo — founded by tech veteran Carlo Gualandri who previously helped create Italy’s first online bank — is launching a multi-user spending account. The cloud-based service, which has been 18 months in the making and is currently available in the U.K. and Italy, is designed to enable and control the flow of money inside organisations with multiple users.

Initially targeting families for things like dishing out pocket money to your kids, splitting household bills, or giving a domestic worker an expense allowance, Soldo also plans to launch for businesses too.

Addleshaws jumps on fintech bandwagon with £500k fund (The Lawyer), Rated: B

Addleshaw Goddard will provide £500,000 in free legal advice to support UK fintech companies.

It is the latest in a series of similar moves by law firms to attract young fintech businesses as clients.

Addleshaws’ programme is called AG Elevate and will provide 16 fintech companies access to free legal advice. The successful companies will also be assigned a mentor from Addleshaws’ fintech practice.

Elevate will launch on 17 November and is split into two programmes designed to target different levels of the market.

Australia

REGULATORS IN AUSTRALIA AND ONTARIO SIGN CO-OPERATION AGREEMENT (FinTech Law Watch), Rated: AAA

The Australian Securities and Investments Commission (ASIC) and the Ontario Securities Commission (OSC) have signed a co-operation agreement to promote FinTech innovation. The agreement will make expansion into the Australian and Ontarian markets easier for growing FinTech businesses.

A referral mechanism has been created under the new agreement which allows ASIC to refer Australian FinTech businesses wanting to enter the Ontarian market to OSC and vice versa.

Both ASIC and OSC have established internal teams to assist FinTech businesses with their regulatory obligations and encourage development of the FinTech industry. ASIC’s Innovation Hub was established in April 2015 and OSC recently established LaunchPad in October 2016.

Canada

Katipult is Named Canada’s Most Innovative Fintech Company (Crowdfund Insider), Rated: A

Katipult, cloud-based software infrastructure that allows firms to design, setup, and manage an Investment Crowdfunding, Peer 2 Peer Lending, or Investor Management platform has been recognized as Canada’s most innovative fintech company.

From debt to equity, from real estate to early stage investing and peer to peer lending, Katipult wants to ensure that “secure, flexible and legally compliant software infrastructure” is also in place, especially for businesses that need to safeguard their information.

China

China tops global fintech rankings: report (Xinhuanet News), Rated: AAA

China’s financial technology (fintech) firms continue to lead globally, securing four positions in the top five in a recent industrial ranking.

Alibaba’s third-party payment platform Ant Financial tops the global ranking for the 100 best performing fintech companies, with micro-loan firm Qudian, wealth management company Lufax and insurance enterprise Zhong An entering the top five, according to a report by international accounting firm KPMG and investment firm H2 Ventures.

A total of eight Chinese fintech companies are on the list, a remarkable rise from just one company in the top 100 in the 2014 ranking.

SuperCharger Fintech Accelerator Announces 8 New Startups as Hong Kong Fintech Week Starts (Crowdfund Insider), Rated: A

SuperCharger Fintech Accelerator 2.0 has kicked off Hong Kong Fintech Week with the announcement of 8 finalists for their program. For a second year in a row, SuperCharger, which aims to help the most promising Fintech start-ups and scale-ups grow in Asia, states it has surpassed other Hong Kong Fintech accelerators with almost 200 applicants from 33 countries.

SuperCharger has focused on the rising tide of Fintech innovation in Asia.  Wealth management, regulatory technology (RegTech), artificial intelligence, cybersecurity and blockchain are the areas with the most compelling submissions for the 2017 SuperCharger FinTech Accelerator 2.0 program.

India

P2P lending startups like Faircent eye product partnerships with auto loans (Economic Times, India Times), Rated: A

P2P players are increasingly looking at more secure product partnerships, aiming to introduce asset-based investment products with Faircent being the first to do so.

The platform has tied up with Mumbai-based on demand bike taxi service Baxi to provide two wheeler loans to drivers.

Asia

P2P lending platform Funding Societies receives CMS license, launches in Malaysia (The Tech Portal), Rated: A

Last week equity crowdfunding platform Fundnel received a provisional Capital Markets Services (CMS) license and now it’s peer-to-business online lender Funding Societies which has received an “in-principle approval” of CMS in Singapore. The license will enable the platform to conduct regulated activities of dealing in securities for lending-based crowdfunding to all classes of investors in the nation. The company said it will commence crowdfunding for both accredited and non-accredited investors once it clears some requirements set by MAS.

Not only this, Funding Societies has upped its game by expanding itself to Malaysia, shortly after its launch in Indonesia as Modalku earlier this year.

Incorporated as Modalku Ventures, the platform was one of the 50 firms which had applied and, will be one of the six registered operators in the country to offer crowd-lending services to SMEs. It plans to fully begin its operations in Malaysia in first-half of 2017.

Authors:

George Popescu
Allen Taylor