Wednesday August 1, 2018 Daily News Digest

Global Banking Executives Biggest Challenges

News Comments Today’s main news: OCC approves fintech charter. Microsoft, Nationwide invest in BlueVine. UK overtakes US in fintech investment. P2PFA members take in over 300M GBP from IFISAs. Today’s main analysis: Trump Administration hugs fintech. Today’s thought-provoking articles: Online lenders, payment companies can act more like banks. How Revolut reduced fraud by 30%. Chinese P2P lending under severe challenges. Fintechs […]

Global Banking Executives Biggest Challenges

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United States

After years of debate, OCC to offer fintech charter (American Banker) Rated: AAA

The Office of the Comptroller of the Currency announced Tuesday that it would move ahead to consider special-purpose charter applications from fintech firms, ending the guessing game over whether the agency was serious about giving fintechs a federal option.

The decision, unveiled just hours after the Treasury Department released a report endorsing a national fintech charter, means fintech firms that opt for the charter could soon be regulated more like banks on a national scale.

Fintech Gets a Hug From the Trump Administration (Barron’s) Rated: AAA

The Treasury Department released a report today with more than 80 recommendations that are aimed at tailoring regulations for nonbank financial institutions and encouraging the development of financial technology.

Source: U.S. Treasury Department
Source: U.S. Treasury Department

Read the full report here.

Securitizations swell as marketplace lending matures (GlobalCapital) Rated: A

A report out of the Department of the Treasury on Tuesday notes that the growth of marketplace lending has fueled ABS deals in the sector.

Marketplace lenders have originated some $100bn in loans since 2014, with unsecured consumer debt accounting for 50% of total volume.

The strong pace of originations has fueled consumer securitization issuance, with the number of marketplace loan ABS deals ballooning every year since 2013.

Online Lenders and Payment Companies Get a Way to Act More Like Banks (The New York Times) Rated: AAA

Online lenders and other so-called fintech firms — including the payment processor Square, the online lender Lending Club and the cryptocurrency exchange Coinbase — have pressed for regulatory routes that would let them cut through the thicket of state and federal laws that govern financial businesses.

Heeding those requests, the Treasury Department released a 222-page report laying out the Trump administration’s view on how nonbank financial companies should be regulated. Hours later, the Office of the Comptroller of the Currency, a national bank regulator, announced a new kind of charter that would potentially free such companies from the state-by-state approvals they currently need to offer loans and other financial products.

Source: Treasury.gov

Read the complete report here.

CSBS Responds to Treasury, OCC Fintech Announcements (CSBS) Rated: A

We appreciate the Treasury’s recognition of the vital role performed by state regulators in overseeing nonbank financial service providers. And we are pleased that Treasury noted the substantial progress states have made towards harmonizing the multistate experience for industry.

At the same time, we disagree with certain Treasury recommendations. We do not support creation of new federal rules or unauthorized federal charters that would seek to compromise the ability of state officials to apply and enforce state laws. And so, we disagree with Treasury’s recommended changes to the valid-when-made doctrine and the true-lender doctrine, and the creation of an OCC special purpose bank charter for fintech companies.

An OCC fintech charter is a regulatory train wreck in the making.

Microsoft’s M12 joins $ 12 million funding extension for fintech startup BlueVine (Venture Beat) Rated: AAA

Fintech startup BlueVine has added $12 million to its recently announced series E round of funding, bringing Microsoft’s venture capital (VC) unit M12 onboard alongside the VC arm of finance giant Nationwide.

The additional funding brings BlueVine’s total series E round to $72 million, after the company announced an initial $60 million cash injection just two months ago.

BlueVine has now raised around $590 million in funding since its inception, though it’s worth noting that around three-quarters of that came in the past year via debt financing.

Small-Biz Talks: StreetShares on Small Business Lending (Value Penguin) Rated: A

On average, veterans are getting, through us, about 2% to 3%lower interest rates than nonveterans. That’s an internal discount that we give. Comparing us to an OnDeck or a Kabbage, we are probably half the average APR of OnDeck and probably a quarter of Kabbage. They may disagree with that, but that’s our numbers.

Online Lending Needs More Regulation: New York Regulator (BNA) Rated: A

Notably, a group of lenders that is currently not subject to licensing – those making loans between 7 and 16 percent – would have to become Licensed Lenders. As a result, those lenders would have to complete the licensing process, pay the associated fees, and would then be subject to supervision and examinations by the NYDFS.

Additionally, any nonbank that lends to a New York borrower, either directly or through a partnership, would have to comply with New York’s usury limit. This rule is already in effect for servicers that acquire loans originated by banks, due to the Second Circuit’s decision in Madden v. Midland Funding. However, the NYDFS recommendation would potentially expand that rule to loans originated by lending companies organized by Native American tribes, among other situations.

Gusto raises $ 140 million to go after small business payroll and benefits with more gusto (TechCrunch) Rated: A

Gusto, which sells payroll, benefits and human resources management and monitoring services to small businesses, has raised $140 million in its latest round of funding.

The company said it will use the money to add new services to increase payment flexibility for employees. The company launched a new service called Flexible Pay, which gives employees a way to get paid no matter when a company’s pay schedule dictates. It seems sort of like a payday loan, where a percentage of the salary is taken by Gusto  for providing money upfront.

Elevate Credit, Inc. (ELVT) CEO Kenneth Rees on Q2 2018 Results – Earnings Call Transcript (Seeking Alpha) Rated: A

Before I catch on the specific highlights for Q2, I’d like to restate, as I usually do, our commitment to use technology and advanced analytics to be the most responsible lender in our space and to make a positive impact in the lives of our customers. As Slide 3 shows, we’ve now extended more than $5.9 billion in credit to more than 2 million nonprime consumers. We’ve come to call the 170 million consumers in the U.S. and U.K. who are credit constrained, the new middle class. And we’re proud to announce on this call that Elevate products have now saved our customers more than $4 billion over what they would’ve paid for legacy products like payday loans.

Elevate Credit (ELVT) Issues FY18 Earnings Guidance (Press Oracle) Rated: A

Elevate Credit (NYSE:ELVT) updated its FY18 earnings guidance on Monday. The company provided EPS guidance of $0.55-0.90 for the period, compared to the Thomson Reuters consensus EPS estimate of $0.72. The company issued revenue guidance of $790-810 million, compared to the consensus revenue estimate of $803.81 million.

Several brokerages have recently weighed in on ELVT. Zacks Investment Research upgraded shares of Elevate Credit from a hold rating to a buy rating and set a $11.00 price objective on the stock in a report on Tuesday, July 24th.

Nobody Says ‘Zelle Me’: Banks Struggle to Catch Up to Venmo (Wall Street Journal) Rated: A

A year in, Zelle’s reviews are mixed. Usage is up, but most banks haven’t signed on, meaning many consumers can’t use it without downloading a separate app. It also fell short of its goal to have 33 banks on the network by its first anniversary, and behind the scenes, it runs on plumbing that’s more than 40 years old.

Zelle’s rocky debut shows the challenges of trying to make alterations to an industry often slow to change and still weighed down by old infrastructure.

Go Midwest, young fintechs (American Banker) Rated: A

For startups, they are not the obvious places to settle down. While fintech is flush with venture capital, three states — California, Massachusetts and New York — gobble up 75% of all VC funds. Yet if there is a good time to go against the odds, it might be now. These days, it has become fashionable for venture capitalists to say they are scouting for opportunities beyond the coasts.

Most visibly, Revolution’s Rise of the Rest seed fund, co-founded by AOL co-founder Steve Case, continues to make a splash by investing in all kinds of startups across America to promote growth and increase investment capital. As Case blogged, “People know that the future of America is tied to more than just three cities, and there is an eagerness, now more than ever, to address the investment gap.”

Bill to enhance poor credit scores will backfire, critics say (American Banker) Rated: A

Legislation to enhance credit scores by allowing consumers to include data about their monthly bills has broad bipartisan support, but some consumer advocates and others question whether the legislation may backfire on those it is meant to help.

The measure, which passed the House earlier this month and is authored by Rep. Keith Ellison, D-Minn., is intended to allow consumers to benefit from positive information about lease, telecommunications and utility payments in their credit reports. An identical version has been introduced by Sens. Tim Scott, R-S.C., and Joe Manchin, D-W.Va., in the upper chamber.

A CEO used to think student loans were predatory, but he’s changed his mind (Business Insider) Rated: A

Last week, LendingTree acquired Student Loan Hero for $60 million. In an interview with Business Insider, Josuweit reflected on how his view of the student-loan industry had changed since launching his business.

Today, Student Loan Hero offers users financial-comparison tools and personalized advice for paying off student loans, rather than taking a one-size-fits-all approach.

Josuweit said he had also softened his stance on student loans in general. Where he once saw them as predatory, he now considers them a valuable tool when used wisely.

Kroger stops accepting Visa credit cards at some stores (Cincinnati Business Courier) Rated: A

Kroger Co. has quit accepting Visa credit cards at some of its stores in a battle against rising fees charged by the credit card giant.

Blockchain’s Spring Labs Appoints Peter Tapling Chief Commercial Officer (Block Tribune) Rated: B

Blockchain’s Spring Labs names Peter Tapling, an identity and payments expert, as chief commercial officer and head of industry relations. He will be responsible for overseeing Spring Lab’s network development, industry awareness, partnerships and commercialization. He will report directly to CEO and Founder of Spring Labs, Adam Jiwan, and will be based in Spring Labs’ Chicago office.
United Kingdom

UK overtakes US on Fintech investment for first half of 2018 (Business Matters) Rated: AAA

The UK has overtaken the US in terms of fintech investment for the first half of the year, and taken the top spot in Europe to attract $16.1bn (£12.3bn) out of the EUs $26bn total.

Four of Europe’s top 10 fintech deals happened in the UK, which included a $250m raise by Revolut, $100m by eToro, $60m by Flender and $54m by Moneyfarm. Data provided by KPMG’s pulse of fintech report has allayed fears that Brexit would hurt the UK’s startup scene, as venture capital firms have cemented the UK’s position as a funding hot spot.

Fintech investment across the world reached record levels over the last six months, taking in $57.9bn across 875 deals. This was an increase of 34.2 per cent compared to the whole of 2017, which recorded just $38.1bn overall.

P2PFA member platforms secure over £300m from IFIsa investments (Bridging & Commercial) Rated: AAA

Members of the Peer-to-Peer Finance Association (P2PFA) have seen 28,000 Innovate Finance Isas (IFIsas) opened, with more than £300m of funds already under management, according to the latest figures.

The six P2PFA member platforms which offer an IFIsa are: 

• Crowdstacker
• Folk2Folk
• Funding Circle
• Landbay
• Lending Works
• Zopa

UK neobank Revolut has reduced fraud by 30% – here’s how (Business Insider) Rated: AAA

UK-based neobank Revolut launched disposable virtual cards in March , and has now reported that they resulted in a 30% reduction in card fraud cases.

Disposable virtual cards provide users with card details that get destroyed right after making an online purchase, and new details are made seconds after the previous ones are scrapped. This way, a merchant can’t charge the customer again, as they don’t have the person’s actual card information.

This fraud reduction announcement comes at the right time for Revolut. Earlier in July, we reported that the neobank had discovered potential money laundering activity on its digital payments system a few months back. It informed the National Crime Agency (NCA) and the Financial Conduct Authority (FCA), suggesting that the severity of the issue was high, as conventionally companies just inform the NCA.

Source: Business Insider

FCA regulation sees an increase in consumer confidence for loans (Financial News) Rated: A

It’s an industry that has often come under intense scrutiny, but the high cost short term loans sector has seen a significant increase in consumer confidence. This comes as a result of the FCA facilitating dramatic changes and the enforcement of new regulations. In fact, a recent review by the FCA has stated that the noticeable improvements in the payday loan industry means that it will now not be reviewing this sector again until 2020. We take a look at the reasons why the FCA has successfully increased consumer confidence in the high-cost short term loan industry.

UK Regulators Taking Very Close Look At P2P Lending (PYMNTS) Rated: A

According to the U.K. Peer-to-Peer Finance Association (P2PFA), a self-regulating P2P industry group that includes most of the biggest names in U.K. marketplace lending, the country’s P2P lending industry had hit £9 billion in loan originations from the group’s members as of Q1 2018.

The figures also reflected having provided finance for approximately 50,000 businesses and 221,000 individuals overall, with a total investor count of about 150,000. According to the The Times of London, those figures are even higher – though they agree on the 150,000 investor count, they think about £10 billion in total loans have been underwritten.

Will New P2P Rules Hit SME Funding? (Forbes) Rated: A

The Financial Conduct Authority, the UK’s chief financial watchdog, has just spent months investigating the sector, where it has already intervened with new rules once to safeguard investors. Now the FCA says the sector has further problems that must be addressed, including poor standards of disclosure, opaque pricing structures, over-optimistic marketing claims and poor record-keeping. It is consulting on a series of potential reforms and has also warned individual businesses in the industry could be investigated for compliance failures.

Much of the regulator’s ire is reserved for the peer-to-peer lending sector, where online platforms facilitate loans from investors to consumers or small businesses. While defaults have been relatively rare – though the regulator points out most platforms have not been tested through a complete economic cycle – the FCA is worried that investors are sometimes being given false expectations about the returns they should expect.

QuickISA Launches Free Search Engine to Discover Profitable Savings and P2P Finance Schemes (Perfect Investor) Rated: A

Past economic turbulence, the recession, and the uncertainty over Brexit and its impact on future investments, has made it imperative for every investor to keep an eye on their investments.  Individual Saving Accounts (ISAs) are a great way to earn tax-free interest on your investment. But which ISA is the most profitable? This question can now be easily answered with the new online service offered by QuickISA.

Legal & General invests £3m in lendtech Smartr365 (FinTech Futures) Rated: A

Legal & General’s (LG) fintech business has made a £3 million investment in Smartr365, a Software-as-a-Service firm which supplies systems to the UK mortgage intermediary market.

Conor Murphy, director, Smartr365, says the new funding will be used for product development – such as its LendrConnect, a mortgage API service that allows brokers to submit mortgages.

China

The Chinese P2P Lending Sector Facing Severe Challenges Right Now (Lend Academy) Rated: AAA

Back then new platforms were launching pretty much every day as p2p lending became the hot new investment. The number of platforms grew to well over 3,000, a number that everyone agreed was not sustainable. But new platforms kept on launching, attracting both investors and borrowers with relative ease.

We all knew the party was going to end at some point and it looks like 2018 will be the year of reckoning. According to industry data provider, Wangdaizhijia (loosely translated as Online Lending House), platforms are failing at a rate of around five a day with 114 platforms shutting down between July 1 and July 24.

Xiaomi’s risky play with P2P lenders: another reason to be bearish (Kr-ASIA) Rated: A

But in the lead up to the company’s IPO earlier this month – which continues to be a rocky one – its founder LEI Jun went all in to deliver his bigger vision: Xiaomi isn’t a gadget maker, it’s an internet company. One that gathers data from a network of smartphones and other internet-enabled devices, and sells additional “online services” – things like utility apps and content, created by partners. In other words, a platform business built around the Xiaomi brand and gadgets ecosystem.

Well, large parts of China’s P2P sector were crumbling after a government crackdown. For some, it came too late – they had trusted sites with their savings in hopes of getting the promised returns.

Xiaomi had an explanation: It doesn’t have anything to do with those lenders. It only let them use its platform for advertising purposes.

European Union

Big Red Cloud becomes the latest SME to raise funds through Flender (Silicon Republic) Rated: AAA

Irish accountancy firm Big Red Cloud raises thousands in partnership with alternative-lending firm Flender.

Alternative-lending platform Flender has added another successful SME funding partnership to the pile, with Irish accountancy software company Big Red Cloud raising €31,500 in just 24 hours.

SMEs benefit from different lending models

O’Dwyer said it was encouraging to see the normalisation of alternative-lending models such as Flender as a credit option for SMEs and a novel opportunity for investors.

DGAP-News: Varengold Bank AG: Preliminary figures for first half of 2018 (Markets Insider) Rated: A

In the first half of 2018, the total assets increased significantly from EUR 445.2 million to nearly EUR 665.5 million. Customer deposits continue to be the dominant amount on the liabilities side with EUR 599.3 million and therefore 90%.

The company’s interest result increased due to the expanded lending volume from TEUR 2,047 in the first half of 2017 to TEUR 3,429 in the first half of 2018. The commission result remained almost constant at TEUR 8,108 in the first half of 2018 (30th June 2017: TEUR 5,818).

International

Fintech vendors keep reinventing themselves, and banks struggle to keep up (American Banker) Rated: AAA

There were 70 mergers and acquisitions among fintechs in the U.S., Canada and South America in the first quarter, and those deals were worth a combined $3.4 billion, according to a fintech investment report issued by KPMG on Tuesday.

The number of deals fell to 60 in the second quarter, but the total value rose to $5.8 billion. M&A activity in this field is expected to remain “very healthy [in] 2018 on the whole,” the report said.

The investment flow is also breeding new companies looking for bank clients. American fintechs, the report noted, attracted $14.2 billion in overall funding in the first half of 2018.

What that means for all banks is when it comes to tech, there’s plenty to ponder: more options for their front- and back-office operations; more retail and commercial service improvements to consider; more new vendors that will be seeking their business; and more fintech investment opportunities to pursue.

Source: American Banker

UK fintech scores the global top spot for investment in the first half of 2018 (City A.M.) Rated: A

China came in second place with $15.1bn, followed by the US with $14.2bn.

Four of Europe’s top 10 fintech deals happened in the UK, which included a $250m raise by Revolut, $100m by eToro, $60m by Flender and $54m by Moneyfarm. Data provided by KPMG’s pulse of fintech report has allayed fears that Brexit would hurt the UK’s startup scene, as venture capital firms have cemented the UK’s position as a funding hot spot.

Fintech investment across the world reached record levels over the last six months, taking in $57.9bn across 875 deals. This was an increase of 34.2 per cent compared to the whole of 2017, which recorded just $38.1bn overall.

Interval Funds: A New Approach To Alternative Investing (Seeking Alpha) Rated: A

The way I view it is that interval funds are a great blend of the traditional closed-end fund that Tortoise is used to managing, along with the traditional mutual fund that we also have managed in the past and still do. Compared to other registered fund structures, they’re obviously less liquid than a mutual fund and a traditional closed-end fund, but they’re great for more long-term investors that aren’t looking to need liquidity quite as often. From our fund’s perspective, you can subscribe daily. You only have the option to redeem at certain periods, and that’s typically between 5 and 25 percent on a quarterly basis. From a liquidity standpoint, obviously, this is nice for folks that aren’t qualified purchasers that aren’t getting exposure to traditional private funds in the limited partnership structure.

Crypto Lending Platform Launched By CoinLoan (Block Tribune) Rated: A

Estonia-based startup CoinLoan has officially launched its crypto-to-fiat lending platform that allow users to HODL crypto and borrow fiat money.

For borrowers, the platform allows them to create an application for receiving a loan in the amount that does not exceed 70 percent of the current market value of the crypto collateral. This limitation has been created for preserving the crypto assets of the borrower and reducing risk related to the high volatility of the crypto asset market.

The platform currently supports bitcoin, ethereum, Litecoin, Dash, ZCash, and Ripple. Users can borrow a loan in the following fiat currencies: USD, EUR, GBP, CNY, JPY, RUB, CHF, PLN and CZK.

A blockchain solution for global peer-to-peer lending (Global Banking and Finance Review) Rated: A

A blockchain solution for global peer-to-peer lending is on the horizon, adding an exciting layer to an already booming sector which is expected to reach the $1 trillion mark by 2025.

The problem is, some aren’t excited by blockchain’s arrival. Experiencing Déjà vu? It’s easy to be transported back to the 1990s when the Internet was dismissed as just a “wasteland of unfiltered data”.

FintruX Network welcomes Bob Rinaldi to its Board of Directors (Leap Rate) Rated: B

FintruX Network, the global P2P lending ecosystem, has just announced a new addition to its Board of Directors, Bob Rinaldi, a serial entrepreneur and business director. FintruX Network is an online ecosystem that facilitates the lending and borrowing of finances to small businesses in a peer-to-peer marketplace powered by blockchain and no-code development.

Australia/New Zealand

Fintech startup Tic:Toc raises $ 11.5 million to take hassle out of home loan approvals (Smart Company) Rated: AAA

Aussie fintech startup Tic:Toc has raised $11.5 million in Series B funding in its bid to improve the customer service around home-loan approvals.

The funding round was led by Genworth Mortgage Insurance Australia and La Trobe Financial, and also included some existing shareholders.

Heartland Bank unveils restructure plans (Interest) Rated: A

Heartland Bank says it’s planning a corporate restructure that will remove business growth constraints stemming from Reserve Bank regulation, and see it list on the Australian sharemarket.

The proposal is for a restructure of the Heartland Bank Ltd group of companies via a court approved scheme of arrangement under Part 15 of the Companies Act. The purpose of the restructure is to more clearly define the separation between Heartland Bank Ltd’s New Zealand and Australian businesses, and to enable it to access the most efficient forms of equity and debt funding, according to an NZX filing.

India

How RBI Is Solving P2P Lending Issues And India’s Credit Woes (Inc42) Rated: AAA

Over the past couple of years, non-banking financial companies (NBFCs) in India have undergone major transformations to keep up with the growing demand in the country’s credit market.

Subsequent to the ease in regulations, a number of new NBFCs were established to supply credit to consumers. However, access to financial services was only restricted to a small segment of consumers/ borrowers with existing credit histories and profiles.

On the other hand, the unbanked sections of the population, or those with limited exposure to institutional credit were not affected much with these developments, finding themselves in more or less the same situation as before.

Latin America

Uruguay: Peer To Peer Lending In Uruguay (Mondaq) Rated: AAA

As the peer to peer lending market is quite embryonic, processional expertise is recommended to make sure the transactions are compliant and in keeping with existing and developing regulations.

Any new lending schemes in this field must be registered with the Central Bank of Uruguay, and payments must be legitimate and in line with existing regulations for the Prevention of Money Laundering.

Asia

Indonesian P2P lender Investree raises Series B round led by SBI Holdings (Deal Street Asia) Rated: AAA

Indonesian P2P firm Investree has announced the closing of a Series B investment in a round led by SBI Holdings and joined by Mandiri Capital Indonesia, Persada Capital, Endeavor Catalyst, 9F Fintech Holdings Group and previous backer Kejora Ventures.

The financial details of the round were not disclosed.

Authors:

George Popescu
Allen Taylor

Tuesday April 10 2018, Daily News Digest

Tuesday April 10 2018, Daily News Digest

News Comments Today’s main news: Prime Meridian announces new opportunities fund. TransUnion launches startup credit kit. SoFi hires Goldman head of mortgage securitization as CFO. Upgrade intros new personal credit line. The Axiom Group ready to invest $50M into charge-off portfolios. S. Korean P2P loans increase 10.3% in March. Today’s main analysis: The highs and lows of Bank Negara’s 2017 […]

Tuesday April 10 2018, Daily News Digest

News Comments

United States

United Kingdom

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United States

Prime Meridian Capital Management Announces New Fund Launch: The Prime Meridian Special Opportunities Fund (Benzinga), Rated: AAA

Prime Meridian Capital Management (PMCM) a Registered Investment Advisor (RIA) specializing in marketplace lending strategies across three alternative credit verticals in four funds, today introduced the Special Opportunities Fund.

The new fund, due to launch in the second quarter 2018, will invest in multiple high yielding alternative credit verticals including litigation finance, life settlements, targeted high yielding, niche real estate, small business, and consumer loans.

TransUnion Boosts Entrepreneurial Innovation with New Startup Credit Kit (Investors Hub), Rated: AAA

To meet the needs of startups and their investors, TransUnion (NYSE:TRU) today launched the Startup Credit Kit at LendIt Fintech USA 2018, giving new companies faster access to cutting-edge alternative and trended credit and fraud prevention data.

With TransUnion’s Startup Credit Kit, new businesses can more quickly gain access to depersonalized consumer credit data to better explore the market for untapped opportunities. It also helps new businesses determine the viability of their products by analyzing real-world depersonalized consumer credit data. This allows startups to focus their resources on high-potential market segments and product opportunities while allowing them to prove their concept to raise funding in the early stages of the startup lifecycle.

SoFi hires former Goldman Sachs head of mortgage securitization as new CFO (Housing Wire), Rated: AAA

Now, it looks like SoFi may be making a bigger move into securitizations by hiring the former head of mortgage securitization at Goldman Sachs as its new chief financial officer.

SoFi announced Monday that it named Michelle Gill as the company’s new CFO.

Gill comes to SoFi from TPG Sixth Street Partners, a credit firm. Gill joined TPG last yearafter a lengthy term at Goldman Sachs.

Gill spent 14 years at Goldman Sachs, eventually serving as a partner and co-heading the firm’s structured finance business.

Lending Club Ex-CEO Is Staging A Comeback With New Fintech Startup (Forbes), Rated: AAA

Online lending startup Upgrade, led by cofounder and CEO Renaud Laplanche, announced that it’s now initiating $100 million in personal loans a month, with an average loan size of about $10,000. The one-year-old company has reached $60 million in annualized revenue, Laplanche says, and by the end of 2018, he expects to hit a $100 million revenue run-rate and become profitable.

Upgrade also announced a new product called Personal Credit Line, a hybrid of a personal loan and credit card. Consumers can get approved for up to $50,000 in credit, and they can draw down on the line as needed, paying interest only on what they’ve borrowed. The credit line has a fixed length of 12 to 60 months and a fixed interest rate, and it forces consumers to pay part of the loan principal every month.

Online lender touts new personal credit line as HELOC alternative (American Banker), Rated: A

The first online lending firm Renaud Laplanche founded, LendingClub, targeted consumers with hefty credit card balances, offering them the opportunity to refinance at a lower interest rate.

In his latest venture, Laplanche hopes to lure customers before they rack up big credit card bills. Upgrade, the San Francisco-based online lender that he founded in August 2016, is rolling out a new product that is designed for folks who are anticipating big expenses but are not sure exactly how much they will need to spend or when.

THE AXIOM GROUP ANNOUNCES $ 50M IN FUNDING AVAILABLE TO PURCHASE CHARGE OFF PORTFOLIOS (Lendit), Rated: AAA

The Axiom Group announced today at LendIt Fintech USA that it has obtained $50M in capital to finance the purchase of charge off portfolios with a focus on consumer loans and credit cards, specifically in the FinTech lending space.

This increase in capital will allow The Axiom Group to pursue large portfolios and monetize those portfolios immediately for the lender/seller partners. By selling bad debt portfolios, FinTech companies can utilize the income for further lending, as well as reduce their risk associated with the challenges of collecting on charged off accounts.

Fintech lenders will struggle to regain mojo alone (Nasdaq), Rated: A

Some 13 months later LendingClub, which Sanborn has run since a mis-selling scandal cost predecessor Renaud Laplanche his job in 2016, remains just a lender. Its stock has lost around a third of its value in the past year.

On Deck’s shares are effectively flat over the same period. But boss Noah Breslow had to slash costs last year after credit losses. He now plans to boost revenue by expanding into portfolio management and loss mitigation, and finding more bank partnerships.

Privately held Social Finance has done the most to diversify, adding consumer and mortgage loans as well wealth management to student-loan refinancing.

SoFi is now the biggest player. It extended $12 billion of new loans last year, 50 percent more than erstwhile leader LendingClub, and its adjusted EBITDA is two-thirds higher at $126 million, according to the Wall Street Journal. Yet each pales in comparison to JPMorgan’s retail unit, which lends around 10 times as much and enjoys lower funding costs thanks to customer deposits.

Consumer Lending Platform Best Egg Exceeds $ 5 billion & Celebrates Fourth Birthday (Crowdfund Insider), Rated: A

Marlette Funding, LLC, the owner of consumer lending platform Best Egg, announced on Monday the year-end results and key accomplishments for first quarter 2017. According to Marlette Funding, during the past year, Best Egg experienced origination growth of 66%, significantly reduced its customer acquisition costs, and ended 2017 with three straight quarters of net income positive on a GAAP basis. Best Egg has reportedly exceeded $5 billion of prime loans and celebrated its fourth birthday. 

Launched in 2014, Marlette Funding, through its consumer brand Best Egg, describes itself as a financial technology provider on a mission to find better ways to make money accessible to allow people to “enjoy life.”

Elevate to Release First Quarter 2018 Earnings on Monday, April 30, 2018 (Business Wire), Rated: B

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that it will release its first quarter 2018 financial results after the market closes on Monday, April 30, 2018. Ken Rees, Chief Executive Officer, and Chris Lutes, Chief Financial Officer, will also host a conference call on the day of the release (April 30, 2018) at 5:00 pm ET to discuss Elevate’s financial results.

 

How Blockchain is Changing the Mortgage Game (Investopedia), Rated: A

While blockchain doesn’t offer a perfect remedy to the problems afflicting the industry, it does provide a model that minimizes some of them. The first major improvement the technology brings is transparency. Blockchain’s distributed ledger technology (DLT) provides two major upgrades to the current model—it decentralizes the storage of information, and it makes all transactions immediately available across all nodes of the chain. The first upgrade means that companies and lenders can no longer manipulate information or engage in shadowy practices with data, as it is shared across an entire network and not under their exclusive supervision.

Nav Launches First-of-Its-Kind Cash Flow Analysis Tool for Small Business Owners (Lendit), Rated: A

Nav, a free platform that helps small business owners build, protect and leverage their financial data, announced the launch of Business Banking Health Check, a feature to help small business owners make more informed decisions on their cash flow. Nav is the only place entrepreneurs can access their personal and business credit scores, along with cash flow insights to provide greater transparency into how lenders view their
creditworthiness and enable greater access to capital.

According to Pepperdine’s Capital Markets Report, insufficient credit profiles and cash flow are two of the primary reasons banks reject business loan applications. Nav’s platform uses these data sets to help business owners manage their fundability, while also doing legwork for lenders by matching its small business customers to their most-qualified funding options.

LENDIO ANNOUNCES LENDER TURNDOWN PROGRAM (Lendit), Rated: A

Lendio announced today at LendIt Fintech USA that it has facilitated nearly $60 million in loans through its lender turndown program.

Lendio’s lender turndown program allows lending partners to offer a marketplace of loan options to customers that do not fit the lender’s credit box; this allows lenders to turn a decline response into a potential loan offer for the small business owner.

LENDR ANNOUNCES THE LAUNCH OF ITS BUSINESS DEBIT CARD (Lendit), Rated: A

Lendr Online, LLC. announced today at LendIt Fintech USA that it is has launched a new business debit card product to service its growing client base. The ability to fund business owners in real-time via an instant access virtual Mastercard followed up with a traditional plastic card utilizing the latest in EMV chip security, will further enhance its brand and solidify Lendr’s position as a premier financial services firm.

Ocrolus Secures $ 4M in Series A Funding (Finsmes), Rated: A

Ocrolus, a New York City-based provider of solutions to analyze financial documents, raised $4m in Series A funding.

The round was led by Bullpen Capital with participation from QED Investors, Laconia Capital Group, ValueStream Ventures, RiverPark Ventures, Sam Hodges (co-founder, Funding Circle), Vince Passione (CEO, LendKey), Ram Ahluwalia (CEO, PeerIQ), Bill King (former head of securitization, JP Morgan), Hugh Nguyen (CEO, ClearServe) and Tanya Barnes (managing director, Golden Seeds), among others. In conjunction with the funding, David Arcara of Laconia Capital Group and Nick Adams of Differential Ventures will be joining Ocrolus as board members. Paul Martino of Bullpen Capital, Amias Gerety of QED Investors and Karl Antle of ValueStream Ventures will be board observers.

 

THINK WALLET REVEALS SCALABLE SOLUTION TO REDUCE FUNDING COST OF PERSONAL LOANS (Lendit), Rated: A

ThinkWallet.com announced today at LendIt Fintech USA that it has solved the problem many lenders currently face: Overspending to attract leads that can’t qualify for their personal loan products.

Nelnet Expands Loan Servicing Offerings To Meet Demands Of Fintech Lenders (PR Newswire), Rated: A

Nelnet (NYSE: NNI) is bringing a new servicing option to Fintech lending platforms. Nelnet Loan Servicing will leverage the experience, scale, and personnel of its existing servicing business with technology enhancements to meet the unique needs of Fintech companies with primary and backup servicing.

 

General Atlantic in talks on a deal with Brazil’s online lender Geru (Reuters), Rated: B

U.S. investment firm General Atlantic is in talks to buy a minority stake in closely held Brazilian online lending startup Geru Tecnologia e Serviços SA, according to two sources with knowledge of the matter.

Other investors may join General Atlantic, the sources said, adding that Geru’s partners have spent the last few weeks visiting funds in San Francisco and New York to raise about $50 million.

 

 

 

 

IDVALIDATION SHOWCASES GOVERNMENTAL VERIFICATION SOLUTIONS FOR LENDERS AT LENDIT FINTECH USA – 2018 (Lendit), Rated: B

IDValidation will be showcasing their governmental verification solutions to the lending community and Stops 100% of Synthetic Identity Theft.

IDValidation’s Consent Based SSN Verification Allows Financial Institutions Direct Access to the Main Frame Database of the Social Security Administration to Accurately Verify the Validity of a Social Security Number and Stop Synthetic Identity Theft. Toyota Financial Services has conducted a successful pilot. IDValidation has become the forerunner in providing this vital tool to the Financial World helping mitigate
Fraud & ID Theft.

 

 

 

LendingPoint To Accept Loan Payments and Disburse Loans via Debit Cards (Business Wire), Rated: A

Bringing a new layer of convenience to financial transactions with its customers, LendingPoint, the company working to revolutionize access to consumer credit, announced today it has entered into an agreement with TabaPay that will integrate debit cards into LendingPoint’s financing platform.

Beginning immediately, LendingPoint will allow borrowers to use debit cards for loan payments they make online or over the phone. LendingPoint will be able to verify account ownership and balance of its applicants through the TabaPay platform. Then later this year, LendingPoint will also be able to instantly disburse loans to approved borrower accounts through their debit cards, 24/7/365, or credit card payoffs. Those inbound and outbound debit-card disbursements and collections will happen instantaneously and are free for the borrower.

HARVESTING INC LAUNCHES AI BACKED CREDIT RISK SYSTEM FOR AGRICULTURE LENDERS (Lendit), Rated: A

Silicon Valley-based FinTech Social Enterprise Harvesting Inc, launches its innovative credit scoring system for financial institutions to assess farmers creditworthiness and facilitate agriculture financing .

Harvesting’s Credit Risk System is an Artificial Intelligence (AI) powered platform which leverages on traditional & alternative data sets and allows financial institutions to build, deploy and monitor credit business in the cloud, within a fraction of time & resources it takes today. It’s easy to use interface with advanced feature engineering flexibility allows credit risk manager to create best of the breed custom credit risk model for the organization on a cloud infrastructure. It allows credit risk manager of any size of financial institutions to leverage the power of AI and increase acceptance rate and reduce defaults.

FUTUREBANK DIGITAL AND API BANKING PLATFORM INTEGRATES ENTERSEKT’S SECURE CONNEKT PAYMENT FUNCTIONALITY (Lendit), Rated: B

Global Kinetic announced today at LendIt Fintech USA, that it will be integrating Entersekt’s Connekt functionality into the FutureBank platform. FutureBank’s unique ability to abstract the complexities in legacy core banking systems and customize digital channels through its technology platform helps banks and disruptive FinTech companies work together more efficiently. The growing digital banking market in the US has become vulnerable as consumers are frustrated by poorly designed mobile apps that often have weak security implementations and limited payment functionality. The FutureBank platform can now offer converged payment acceptance through Connekt.

PENSCO Launches Custodian Connect (Lendit), Rated: B

PENSCO Trust Company (“PENSCO”) announced today at LendIt Fintech USA, the launch of Custodian Connect, an API-driven capability that seamlessly connects investment platforms to PENSCO enabling uninterrupted opening and funding of an IRA from within the platform.

 

Spring Labs Announces World Class Industry Advisory Board to Help Build Decentralized Credit and Identity Validation Network (Lendit), Rated: B

Spring Labs, which is building the Spring Network, a blockchain-based network being designed to allow lenders, banks, and data providers to securely and efficiently exchange data with one another, today announced its founding industry advisory board. The industry advisory board comprises a group of industry leaders in finance, credit, and compliance, with members including Sheila Bair, the former Chair of the U.S. Federal Deposit Insurance Corporation (FDIC); and Nigel Morris, Co-Founder and former long-time President of Capital One, and co-founder of QED Investors, a leading investor in global financial technology companies.

This news of the industry advisory board comes on the heels of Spring Labs announcing a $14.75 million seed fundraising round, one of the largest initial venture rounds to-date for a blockchain startup.

CoinVantage Announces Release of Flagship Portfolio Accounting & Reporting System for Digital Assets (Lendit), Rated: B

Alternative Investment fund administrator MG Stover & Co. (MG Stover) announced today a partnership with software technology firm CoinVantage as part of its strategy to grow its digital asset fund administration business and deliver world class solutions to its clients.

Cross River Bank Demonstrates Key Growth, Makes Significant Personnel Hires (Lendit), Rated: B

As Cross River Bank approaches its 10th anniversary, the leader in the emerging FinTech market is demonstrating a surge in growth and surpassing significant milestones as it grows its customer base, offerings and strategic partnerships designed to revolutionize the banking infrastructure.

 

United Kingdom

VPC’s revenue dips in February after record January performance (Peer2Peer Finance News), Rated: AAA

VICTORY Park Capital (VPC) Specialty Lending Investments saw its total net revenue return dip to 0.81 per cent in the month of February, after reporting a record return of 1.08 per cent in January.

In its monthly market commentary, VPC said that the fall in revenue was due to a combination of factors including a “one-time fee earned in January and a shorter day count”. Capital losses were attributed to VPC’s exposure to Elevate Credit – a US-based provider of short-term loans, and securitisation residuals.

 

International

The P2P Lending Alternative – Crowdvouching – Will Now Run in Test Mode (Coin Telegraph), Rated: AAA

In 2017, Suretly token-holders were inspired by the idea of a crowdvouching platform – an international exchange for micro-guarantees, where people can make money by helping others borrow. In the beginning of 2018, the project made something that many other ICOs were not able to deliver: the demo version of its product. To become a guarantor (or a ‘voucher’, in the crowdvouching terminology), an individual needs to download the Suretly mobile application, where he can find borrowers’ loan orders, vouch, and get receive a sum of money in return (a fee).

On April 9, Suretly releases the first version of the new app, available to all users registered for its testing period. The borrowers’ behavior is based on the real data of past periods, and, therefore, users can learn different vouching strategies and practice them in future.

Unlike p2p lending, Suretly does not lend money directly, but rather serves as an intermediary between financial institutions, borrowers, and co-signers. Suretly users vouch for a small part of a loan sum and guarantee that the loan will be repaid in the case of a borrower’s default. Liability for each loan is divided among all vouchers and each voucher’s approval serves as an insurance of the loan. In order for the loan to be approved, the entire amount must be guaranteed by the vouchers.

RCN AT LENDIT FINTECH USA 2018 (Lendit), Rated: B

RCN announced today at LendIt Fintech USA that it will showcase how global lending through peer-to-peer technology is possible using blockchain technology and cosigned smart contracts.

With billions of people all over the world excluded from traditional banking & financial services, Sebastian Serrano (CEO), will explain the company’s successful history in Latin America since it was funded and how RCN can contribute to the world’s economy by providing credit and financial inclusion through blockchain technology and cosigned smart contracts.

Scienaptic releases significant product enhancements to its credit underwriting product ‘Ether Underwrite’ (Lendit), Rated: B

Scienaptic Systems Inc. announced today at LendIt Fintech USA that it has released an advanced version of its Credit Underwriting product, Ether Underwrite.

European Union

Can Europe cash in on the fintech revolution? (Silicon Republic), Rated: AAA

Technologies such as blockchain underpin the fintech revolution, paving the way for a whole groundswell of new start-ups that have targeted markets underserved by banks through better user interfaces and user experience (UX) as well as through digital marketing and branding.

A case in point is Revolut, a London-headquartered start-up with offices in Dublin. It turns out that cash-savvy young workers have no time for bank fees and are less forgiving of banks than older generations, and are flocking to these challenger banks.

Examples include: Zurich’s Advanon, an online platform for invoice financing for SMEs; Dublin’s CurrencyFair, which allows individuals and businesses to send funds to bank accounts worldwide; Stockholm’s Klarna, which provides online payments for e-commerce sites; and London’s Monzo, a start-up bank that has amassed more than 20,000 current-account holders and more than 500,000 people using its distinctive ‘hot coral’ cards.

Latin America

Creditas publishes report on the Brazilian lending market (Lendit), Rated: B

Creditas, the leading digital lending platform for secured loans in Latin America, has published the updated report “The disruptors paradise: Understanding the Brazilian lending space” at the Lendit USA 2018 conference.

With roughly US$ 150 billion in net interest margin, Brazilian consumer debt represents a unique opportunity to significantly increase debt availability and reduce the 30%+ banking spread. The report summarizes the reasons behind the high spread of the Brazilian ecosystem and the evolution during the last decade.

Canada

Nova Credit Partners with Transunion Canada to Expand Immigrant Financial Access across North America (Lendit), Rated: AAA

Nova Credit announced today at LendIt Fintech USA that it partnered with Transunion to serve creditworthy newcomers to Canada who may otherwise miss out on credit opportunities due to a lack of Canadian credit history.

The new product—TransUnion Global Credit Connect powered by Nova Credit—provides newcomers to Canada with a platform to import their historical credit information and have their international credit reports delivered to end-users such as banks, in a streamlined, standardized format. The foreign credit score is mapped to a Canadian equivalent score so that it can be consistently applied.

MENA

Dubai SME Expands Agreement With Finance Solutions Provider ‘Beehive’ (Albawaba Business), Rated: A

The Mohammed bin Rashid Fund (MBRF) for SME – the financial arm of Dubai SME, itself an affiliate of Dubai’s Department of Economic Development (DED) – has expanded the partnership agreement with Beehive, the MENA region’s first regulated peer-to-peer lending platform, which will cross the $50 million mark of total funding for SMEs across the platform this month.

Following a successful initial launch, MBRF and Beehive have broadened the scope of the agreement to increase the credit guarantee to AED750k and also offer Sharia Compliant Invoice Finance, a short-term finance option for businesses wishing to improve cash flow.

Asia

South Korea’s P2P loans jump 10.3% on month in March (Pulse News), Rated: AAA

The combined loans of peer-to-peer (P2P) lenders in South Korea reached almost 2.3 trillion won ($2.1 billion) last month amid burgeoning demand for the debt financing service that allows individuals to borrow or lend money online without going through an official financial institution.

According to Korea P2P Finance Association on Monday, the accumulated loans of its 65 members reached 2.296 trillion won as of end of March, up 213.6 billion won or 10.26 percent from a month ago. By sector, total loans on real estate project financing reached 768.5 billion won, real estate mortgage 611.5 billion won, and other mortgages 472.4 billion won, and credit loans 443.2 billion won. The members’ average loan interest rate was 14.32 percent.

The State Of The Nation: The highs and lows in Bank Negara’s 2017 annual report (The Edge Markets), Rated: AAA

Source: The Edge Markets

THERE is a chance the economy will grow as much as 6% this year, according to Bank Negara Malaysia’s 2017 annual report, which was released on March 28. Not only is that ahead of 2017’s stronger-than-expected 5.9% gross domestic product growth, the central bank’s baseline projection of 5.5% growth for this year is at the higher end of the official 5% to 5.5% projected in the Economic Report 2017/2018, which was released just five months ago.

In fact, working numbers in the annual report indicate 5.67% growth for 2018 — exceeding the government’s projection last October, although just short of 2017’s spectacular 5.9% reading.
Source: the Edge Markets

While last year’s growth beat everyone’s expectations (including the central bank’s working number of 4.57%), it is worth noting that 2016’s actual GDP growth of 4.2% was very close to the central bank’s working number of 4.1% when official projections were between 4% and 5%.

 

Authors:

George Popescu
Allen Taylor

Wednesday March 2 2018 Daily News Digest

Alibaba and Tencent investments

News Comments Today’s main news: Vanguard partners with Raisin. Rumor alert: Upstart seeking $100M from investors. LendInvest changes commercial property products. Apple may be blocking Chinese P2P lenders from app updates. Today’s main analysis: PeerIQ’s MPL earnings insights report. (A MUST-READ) Today’s thought-provoking articles: Fintech holds promise to expand credit. How the PE lifecycle can be audited by the blockchain. How […]

Alibaba and Tencent investments

News Comments

United States

United Kingdom

China

European Union

International

Australia

Asia

Africa

News Summary

United States

Online lender Upstart is said to seek $ 100 million from investors (American Banker), Rated: AAA

Upstart, which was founded by Google veterans, is testing venture capitalists’ appetite for an investment round of about $100 million, said two people briefed on the matter.

The San Carlos, Calif.-based startup is looking to sell shares that would value the business at $500 million to $1 billion, said one of the people, who asked not to be identified because the discussions were private. This venture capitalist didn’t pursue a deal because of an existing competitive investment.

PeerIQ’s Marketplace Lending Earnings Insights (PeerIQ Email), Rated: AAA

    • Where are we in the credit cycle? Earnings calls indicate CEOs/CFOs are constructive on the health of the US consumer and see a tax reform as improving consumers’ disposable income. However, an increasing supply for credit and demand for credit, as well as re-normalization trends and increased competition are leading to higher charge-offs.
Source: PeerIQ
  • Credit re-normalization continues across all major lending groups. Credit performance this quarter is mixed. We observe improvements, and record low delinquencies from ONDK, OMF, and FinTechs in particular. LendingClub expects 31 bps lower charge-offs going forward due to tighter credit standards. At Discover – a bellwether for personal loan performance – the net charge off rate jumped 92 bps YOY to 3.62% – the largest increase in several years.
  • Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. American Express increased loan loss provisions 33% although loan growth was only 14%.
  • GS & Morgan Stanley remain comparable in market cap, revenues, and margins – are focused on lending to improve ROE. MS is doubling the size of its warehouse lending footprint. GS continues to invest in Marcus and aggressively pursue M&A. If GS executes on its strategic plan of generating, in 5 years we should observe a growth in ROE from their consumer lending activities.
  • Bank FinTech partnerships, and M&A continues. Banks are either partnering with FinTechs or investing in beefing up their technology capabilities in payments, lending, digital banking and wealth management. Banks like JP are partnering with Amazon by rolling out co-branded checking accounts and credit cards. A specter is haunting financial services – the specter of Amazon.
  • Lenders are taking actions to pass rising rates on to borrowers to protect margins and investor returns. Lenders are also trying to reduce all-in funding costs by reducing the credit spreads on their securitizations.
Source: PeerIQ

Read the full report here.

 

Fintech Holds Great Promise To Expand Credit, Says Fed’s Bank Supervision Ace (Forbes), Rated: AAA

Fintech holds great promise to expand credit, Federal Reserve Vice Chair for Bank Supervision Randy Quarles told a forum on financial services for the underserved Monday.

While promoting the advantages of algorithm credit rating and other forms of fintech, he voiced it is important for banks to understand the risks when they offer new products of their own or partner with emerging fintech companies.

Touching on another issue, Quarles said the decline in lending by small banks to small businesses can be attributed in part by entrepreneurs using big bank credit cards.

THE PE LIFECYCLE CAN BE AUDITED BY BLOCKCHAIN (AllAboutAlpha), Rated: AAA

The hyperledger fabric is an open-source cross-industry collaborative effort to create a standardized enterprise code base. No cryptocurrency is required, the network is permissioned, and the system of consensus is PBFT rather than proof of work.

That latter point is important in the finance/auditing context, and so is worthy of some explanation here. The usual system in blockchains is “proof of work.” The creator of a new “block” within the chain is required to do something mathematically laborious, a calculation, also called “mining.” This is what allows the trustless and distributed consensus that made possible the creation of “bitcoins” and the launch of blockchain as a technology.

But “proof of work” takes up a lot of computational energy, and for some non-currency uses of blockchain it is just too much trouble. So alternatives protocols have developed within the blockchain world, and one of them has the ungainly name “practical byzantine fault tolerance.” That term comes from a game-theoretical issue called the “Byzantine Generals’ Problem,” which is something like the “prisoner’s dilemma” on steroids. But it is generally best to ignore all of that and just to think of the alternative protocol as PBFT.

Avant Founders Raise $ 15 Million for Blockchain Firm, Token Sale (Bloomberg), Rated: A

The team that founded marketplace lender Avant Inc. raised about $15 million to start a firm that will use blockchain technology and digital tokens to motivate companies to share data about customer identities and credit worthiness.

The venture, which is called Springcoin but does business as Spring Labs, is building a decentralized network that seeks to allow lenders, banks and data providers to pay one another for direct access to consumer information, Spring Labs Chief Executive Officer Adam Jiwan said in an interview. Many companies are hesitant to give out customer data due to concerns about regulation and security, while others don’t have a financial incentive to do so, he said.

TD Bank in commercial lendtech revamp with nCino (Fintech Futues), Rated: A

Chalk up another big win for cloud-based lendtech vendor nCino. The North Carolina-based fintech has signed a deal with TD Bank in the US that will put nCino’s Bank Operating System to work for the bank’s corporate and commercial lending divisions, reports David Penn at Finovate.

The technology is already live with employees in the TD Equipment Finance department. nCino’s platform will give prospective business borrowers faster decisions on their loan requests, as well as add transparency to the loan process. The Bank Operating System will also enable the bank’s credit risk management, sales, and underwriting professionals to benefit from insights into TD Bank’s commercial lending portfolio and better collaborate on deals. Built on top of Salesforce.com, nCino’s Bank Operating system features CRM, loan origination, account opening, workflow, content management, business process management, customer engagement, and instant reporting all on a single platform.

How blockchain is affecting banking (Stitcher), Rated: A

In this episode the host John Siracusa and co-host Sarah Bacehowski. Interview Jason Jones co founder of the Lendit Fintech Conference they discuss how blockchain is affecting national and global banking today and how it may impact credit and lending.

Fintech’s Focus Shifts Toward Finance (CFO), Rated: A

The financial technology industry is maturing at a dizzying pace, having exceeded a combined $31 billion in total funding last year alone, according to KPMG’s recent Pulse of Fintech report.

With this sustained influx of funding, innovations within the space are moving traditional banks to partner up with fintech firms. That benefits both sides as well as customers like corporate finance departments.

On Deck Capital and Lending Club have both recently found themselves in publicly precarious situations related to risk management. On Deck has had to change its strategy several times over the years to address investor concerns. Lending Club experienced a systematic fraud issue that resulted in a CEO departure, stock-price drop, and public cynicism. Other, smaller companies have faced similar problems stemming from a deficient focus on this important role.

Top 5 Debt Consolidation Loan Companies for 2018 (Student Loan Hero), Rated: A

Using a personal loan to consolidate debt can simplify your financial life. But this move is most worthwhile if you can get debt consolidation loan rates that are lower than what you’re currently paying.

This overview can help you quickly find debt consolidation loan companies with the best rates. From there, you can find the lender that offers the best rates and terms to help you get ahead of your debt.

Source: Student Loan Hero

Omnichannel and Short-Term Lending (Lendit), Rated: A

Research conducted in late 2016 noted that three things were apt to cause the average customer to end his or her interaction with a company. These included being transferred between multiple employees when seeking a resolution to a problem, long wait times, and having to repeat themselves during a transaction process. To solve these kinds of discrepancies between customer expectations and the quality of service provided across multiple platforms, more companies are taking an omnichannel approach to the customer experience—especially in the financial services industry.

Below are three questions and answers about how this novel approach to customer experience can benefit both short-term lenders and borrowers.

  1. What does the omnichannel approach offer businesses and customers in the short-term lending industry?
  2. What obstacles stand in the way of the mass adoption of omnichannel lending?
  3. What is the best way for short-term lenders to implement an omnichannel model?

LAUREL ROAD DEBUTS TRULY DIGITAL MORTGAGE PLATFORM (PR Newsire), Rated: A

Laurel Road, an online lender and FDIC-insured bank, today debuts a truly digital mortgage product that uses the company’s secure lending technology to offer home buyers and owners personalized mortgage options at real, competitive rates. Laurel Road’s platform builds mortgages entirely online, simplifying the process with transparent fees and a customized end-to-end digital experience with human support only when customers need it.

Additional product features include:

  • Truly digital experience – Laurel Road’s mortgage product puts customers in the driver’s seat by enabling a digital-first user experience, with human support via phone or online chat as needed but never required outside of closing
  • Stated pricing – Customers who have a price range or specific house in mind can input these details upfront to generate customized options and rates
  • Maximum affordability – By inputting basic financial information, customers can determine the maximum affordable loan they’re eligible for early in the process with no commitment required
  • Added savings – Customers have the ability to earn savings off their closing costs by using the online capabilities throughout the process, such as data verification
  • Optimized for efficiency – Digitally-enabled experience and built-in incentives for options that streamline the process allows Laurel Road to invest more in customer experience and deliver mortgages in just a few weeks
  • Educational resources – Prompts integrated into the user journey will help customers establish their financial readiness and evaluate how Laurel Road can be a partner in the process
  • Expert options and clear terms and fees – Based on a customer’s preferences, 3 unique mortgage options are presented in a transparent way so one doesn’t get caught with misleading teaser rates or hidden fees
  • Soft credit pull – Laurel Road will conduct a soft credit pull during preliminary stages to avoid credit penalties when customers are still exploring options

DiversyFund Hires New Chief Technology Officer (Digital Journal), Rated: B

DiversyFund has named Mark Brogowicz as its new Chief Technology Officer as the firm ramps up its efforts to reinvent alternative investing through its revolutionary crowdfunding platform.

Brogowicz will lead the firm’s product and engineering teams. Brogowicz previously helped Los Angeles startup PeerStreet launch their product and is now looking to replicate that process in San Diego.

MassChallenge wants to pair fintech startups with finance giants (Boston Business Journal), Rated: B

MassChallenge is preparing to launch a program for startups specializing in financial services technology, or fintech — a fast-growing field that’s increasingly a top priority for Boston’s investment firms, banks and insurance companies.

While details are still being worked out, the program is expected be similar to the Boston-based organization’s accelerator for health technology startups, according to MassChallenge. That program, known as Pulse@MassChallenge, pairs later-stage startups with some of the industry’s biggest local and national players, like Aetna and Vertex Pharmaceuticals. The program provides them with mentoring, office space, and an opportunity to compete for cash prizes.

Shinnecock Partners Publishes an Investor’s Guide to Fine Art Secured Lending (PR News), Rated: B

Shinnecock Partners, a 28-year old family office boutique with significant expertise in alternative finance and fintech, has published “Creative Collateral: Lending Against Fine Art,” by the firm’s founding partner, Alan C. Snyder and co-authors/firm analysts Michael Cervino and Christian Williams. The 16-page report outlines a little-known niche investment opportunity, art-secured lending, which, as reported by Deloitte, is a $15 – $20 billion market that is growing at an annual rate of 13 percent.

The research paper covers:

  •     An overview of the market and the “buzzword” lexicon
  •     Key factors to consider
  •     Risk mitigants
  •     An investor participation road map

You can access the report at: 

Private Lending Association to Offer Class for Certified Fund Manager Designation (PR Newswire), Rated: B

The American Association of Private Lenders (AAPL) is offering the Certified Fund Manager (CFM) designation class May 9, 2018, at the Geraci Activate Conference, located at the Sofitel Hotel in Beverly Hills, California. AAPL members are eligible for the CFM designation and may register for the class at  or  The CFM designation class requires a separate registration from the Geraci Activate Conference.

Seek Capital Wins Again, #1 Customer-Rated Lender for the Business Loans Category from LendingTree in Q4 2017 (PR Newswire), Rated: B

On LendingTree’s platform, Seek Capital has a 4.9 out of 5 star rating. 57 different businesses have reviewed Seek Capital on LendingTree.

Seek Capital specializes in getting startup business loans for new businesses. While there is a large array of funding options for established businesses, new businesses are left with little to no options. Seek Capital provides solutions to this under-serviced segment of the business funding market. In 2017, Seek Capital originated close to $100 million for startup businesses in the form of an unsecured line of credit.

United Kingdom

LendInvest changes commercial property products (Mortage Introducer), Rated: AAA

Borrowers wishing to fund the purchase of, extend the lease on, or refurbish a commercial property where the use will remain commercial, are directed to the updated commercial bridging product.

LendInvest has increased the maximum term for its commercial bridging loans from 12 to 24 months, and reduced rates.

Its commercial bridging rates vary between LTV but the base 60% has been reduced from 0.90% to 0.79%.

Best refer-a-friend schemes: how you can earn up to £500 (Which?), Rated: A

NatWest has launched its first ever refer-a-friend scheme, which could earn eligible customers up to £500 – and it’s not the only company offering incentives for signing-up your loved ones.

Until 20 April 2018, eligible customers will receive up to £500 when their friends and family join NatWest. But it’s not open to everyone, with NatWest randomly selecting 300,000 customers for the test phase.

Refer-a-friend: current accounts

Earn £500 with NatWest-NatWest recently launched its first ever refer-a-friend scheme, offering existing members the chance to earn up to £500 by recommending its current accounts to friends and family.

Earn up to £500 with Nationwide-Nationwide is offering existing members the chance to earn up to £500 by encouraging friends and family to switch their current account.

Earn £25 with Vanquis -Vanquis Bank customers could earn £25 for convincing friends and family to sign up to the Vanquis Credit Card.

Earn £25 vouchers with Scottish Friendly-Customers of Scottish Friendly could earn £25 by introducing a new friend or family member to the company.

P2P securitisation boom still on the cards (Peer2Peer Finance), Rated: A

PREDICTIONS of a securitisation boom in the peer-to-peer lending sector last year failed to materialise, but analysts are still optimistic about the market.

Ratings agencies such as Moody’s predicted a boom in P2P securitisations, but the only activity in 2017 was a £208.9m Zopa deal led by investment trust P2P Global Investments.

Ratings agency S&P Global is also expecting more activity and has predicted a 30 per cent increase in securitisations from marketplace lenders around the world during 2018.

7 TECH STARTUPS THAT ARE TAKING IRELAND BY STORM (Irish Tech News), Rated: A

Pro-business policies have made the country an extremely favourable environment for startups, and the capital can lay a convincing claim to be Europe’s Silicon Valley. Here are just seven of the most interesting and highly awarded startups finding success in Ireland.

Mingo- Mingo are aiming to replicate the success of digital currencies like Bitcoin and Ethereum by floating their own currency called (quite logically) Mingocoin.

Trezeo- Firms are using digital tools to revolutionise the process of transferring and storing traditional currencies as well as digital-only ones. Trezeo are a perfect example of this mindset, and offer a product that’s of use to the everyman rather than the big financial institutions.

FlenderFlender is one of the success stories from crowdfunded investment platform Seedrs. The premise: peer-to-peer lending, where lenders can set their own rates and terms for borrowers to agree to.

Don’t Innovate for Innovation’s Sake. Understand the Need for Change. (Retail Tech News), Rated: A

Here, Luke Griffiths (pictured below), general manager, Klarna UKexplains why that means it’s crucial that retailers consider the shopping journey from browsing through to purchase, delivery, and returns.  

It’s no longer good enough for retailers to wait on the sidelines while others make the first move into innovation – something which was highlighted in a recent white paper Klarna produced in association with Internet Retailing. In it, we explored the main qualities needed to be successful in today’s ever-changing retail sector.

Retailers can’t afford to ignore more innovative payment options. This was highlighted by recent Klarna research, which found that 53% of shoppers are looking for new, easier ways to pay online; while 56% would buy more online if there was more variety in payment options available.

 

British Business Bank provides 1pm with £35m funding line (Leasing Life), Rated: A

The British Business Bank provided 1pm Group with a £35m asset finance facility which will be used mainly on hard assets through its subsidiary Bradgate Business Finance.

At the end of February 1pm has entered into a cooperation agreement with Mintos to be a loan originator on its online marketplace for loans.

1pm is the first loan originator from the UK to access the Mintos marketplace and joins approximately 30 other loan originators globally.

 

 

It’s time to crack down on high-cost credit cards, says Labour MP (The Investment Observer), Rated: B

Stella Creasy is hoping to crack down on high-cost credit cards, introducing a cap on fees and interest charges.

The Labour MP, who was credited with the caps on interest rates and fees charged by payday loan companies, will attempt to enforce similar laws for credit cards on in Parliament on Tuesday.

The FCA has ruled out capping credit card costs after reviewing the market last year.

 

China

Apple App Store Said to be Blocking Chinese Peer to Peer Lenders from Updating Apps (Crowdfund Insider), Rated: AAA

We have received some information from an insider regarding Chinese peer to peer lending platforms being unable to update their Apps in the Apple App store due to a regulatory disconnect.

The problem is that not a single Chinese peer to peer lender has passed the necessary evaluations as regulators have not yet processed any. The first batch of approvals from the Chinese authorities is due at the end of April with the deadline by the end of June. According to the source, it is even more perplexing due to the fact that having an updated iOS App is necessary to comply with the Chinese regulations and pass the tests.

The Apple enforced process is described as follows:

  • We need to update our iOS App so that we can provide updated features to customers that are in compliance with regulations
  • Local financial regulators will not allow us to complete the record-filing process if they see that we have not come into compliance across all of our platforms (Android, iOS, PC)
  • If we can’t complete the record-filing process, then we will not be allowed to update our business license to include “internet loan information agency” in permitted activities
  • If we can’t update our business license, we can’t provide the necessary documentation to App Review to have our App Update approved
  • If we can’t get our iOS app updated, then we won’t be in compliance with regulations
  • Dead-end feedback loop back to point #1….
European Union

Vanguard Teams With German Fintech Raisin (Investopedia), Rated: AAA

Vanguard, the king of passive investing and one of the world’s largest fund managers, is partnering with Raisin, the German fintech, enabling some of its investments to be sold on the fintech’s platform.

Raisin, among Europe’s largest fintechs, counting more than 100,000 customers, will offer four portfolios comprising index or exchange-traded funds from Vanguard and BNP Paribas. The Financial Times reported that the investment portfolios have annual costs on average that are less than 0.5%. According to The Financial Times, this is the first time Raisin is getting into the investment area, previously focusing its efforts on brokered savings deposits.

Banks deploy ID software for client verification (Financial Times), Rated: A

Banks have begun to implement new technologies to help verify who the customer is, though the new GDPR rules in Europe could complicate usage; the General Data Protection Regulation, which will restrict how companies collect and store data, allows for customers to ask for their data to be removed and non compliance results in huge fines; banks have started to slowly add new technology but they are still figuring out where to limit storage; new companies are trying to sell services into bank that allow them to collect information but store it in a certain way to be compliant; with new technology being developed so rapidly, governments need to ensure they keep up with innovation and clearly tell the market how to comply.

German fintech Penta launches new business banking platform (AltFiNews), Rated: A

Berlin-based Penta has announced its newest fintech “Compass”, a platform that allows incorporating businesses in Germany to deposit their share capital and open a bank account in under 24 hours.

According to Penta, incorporating a business can take up to 6-8 weeks because of the bureaucratic process of opening a bank account and registering with the correct government bodies, which is legally required in Germany. Penta’s latest proposition will allow founders to open a bank account in a process that takes less than 15 minutes, completing the whole process online for free.

 

International

BBVA-backed fintech launches global bank account (American Banker), Rated: AAA

A new fintech backed by the Spanish bank BBVA aims to do something that others before it have failed to do: simplify international payments.

The fintech, Denizen, claims it has created a “global banking platform” that allows customers to receive money in one country and pay it out in another immediately, avoiding international transfer fees and eliminating currency exchange fees.

The firm says the cross-border money movement service is the first in a planned series of products. Denizen is currently available to expatriates living in Spain and the United States. The service is set to expand in 2018, adding as many as 10 European Union countries in the second half of the year as well as the United Kingdom.

Finastra appoints new CTO to lead next wave of financial services innovation (Fintech Finance), Rated: B

Finastra today announced that Eli Rosner has joined the firm as Chief Product and Technology Officer. Eli is responsible for global product and technology strategy and will support Finastra to deliver world class products, fully integrated solutions and its open FusionFabric.cloud platform for innovation.

Eli brings more than 25 years of industry experience to the role at Finastra. He joins from NCR Corporation where he served as CTO and Head of Product Management. Based in London, Eli will lead a global team of strategy and product managers, enterprise architects, data scientists and software engineers.

Australia

Online lender launches new loan portal (The Adviser), Rated: AAA

A custom-built introducer portal designed to facilitate fast, real-time processing of loan applications for brokers has been launched by an Australian marketplace lender.

Online lender Zagga this week launched the new portal, which uses custom-built algorithms to match wholesale investors with borrowers.

Speaking to The Adviser, Zagga CEO Alan Greenstein said the portal would provide brokers with simple, fast, and direct access to the loan application process from start to finish.

Sydney Angels funds QPay $ 570k to steal millennial students from banks (Finextra), Rated: A

Australia’s first ever student marketplace app, QPay, has raised $570,000 from a series of high profile investors, including Sydney Angels and the Sydney Angels Sidecar Fund 2, to break into student banking through the release of a student-targeted QPay MasterCard.

QPay aims to use the QPay MasterCard to capture the largest cluster of millennial consumers at the point when they’re most likely to begin making serious financial decisions – when enrolled in tertiary education.

Asia

How Alibaba and Tencent became Asia’s biggest dealmakers (Financial Times), Rated: AAA

The China Music story shows just how hard it can be to say no to Tencent — and the other big player in the Chinese tech world, Alibaba. With their large resources and long-term perspective, the two Chinese groups are transforming Asia’s investment landscape, posing challenges for private equity and venture capitalists as well as the start-ups looking for funds. In some parts of the region, SoftBank, the Japanese investment group, is playing a similar role.

The reach of Tencent and Alibaba in their home market dwarfs that of the big tech groups in the US. While the latter accounts for less than 5 per cent of all venture capital flows in their home market, Alibaba and Tencent account for 40-50 per cent of venture capital flows in mainland China, according to data from McKinsey.

If the venture capital market in China has become a fierce battle between Alibaba and Tencent, in other parts of the region it is often a three-pronged competition that also includes SoftBank.

 

Can Korean entrepreneurs help create Indonesia’s next unicorn? (The Investor), Rated: A

Indonesia is home to four unicorns — startups whose value reaches over US$1 billion — Go-jek, Traveloka, Tokopeida and Bukalapak. But the world’s fourth populous country with more than 250 million potential spenders wants more such success stories.

“Currently, we have four startup unicorns from Indonesia but none are from fintech services. I hope to see the next unicorn from this field,” said Rudiantara, adding that he believes P2P lending fintech startups have a chance to become the next unicorn.

His wish may soon become a reality as Indonesia’s market potential, combined with the government’s push for creating a startup hub are attracting aspiring entrepreneurs from all around the world.

Africa

How technology is changing wealth management (Money Web), Rated: AAA

The investment world is no different. Robo-advice is but one small part of the broader fintech landscape, but it has already made a major impact on the investment space through improved access and by allowing investors to plan for specific needs without the use of a traditional advisor. Technology has also made pricing more competitive.

According to Accenture, global investment in fintech ventures tripled from just over $4 billion in 2013 to more than $12 billion in 2014.

Authors:

George Popescu
Allen Taylor