Thursday August 15 2019, Weekly News Digest

Germany yield curve

News Comments Today’s main news: Prosper reports Q2 results. Figure to raise $1B. Funding Circle shares rise. RateSetter to stress test provision fund. LendInvest raises 200M GBP. Two more Chinese P2P firms shut down. N26 eyes IPO. Today’s main analysis: Gen Z’s credit market activity. Today’s thought-provoking articles: Radius Bank’s rebranding to banking as a […]

The post Thursday August 15 2019, Weekly News Digest appeared first on Lending Times.

Germany yield curve

News Comments

United States

United Kingdom

China

European Union

International

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News Summary

United States

Prosper Reports Second Quarter 2019 Financial Results (Business Wire), Rated: AAA

Prosper, a peer-to-peer lending platform connecting borrowers and investors, today reported financial results for the second quarter of 2019. Personal loan originations increased 27% compared to the first quarter of 2019, and the company has now generated positive adjusted EBITDA in eight out of the last nine quarters.

Financial summary:

  • Total Net Revenue, which includes the non-cash impact related to warrants to purchase preferred stock, increased to $42.9 million in Q2 2019 compared to $31.7 million in Q2 2018.
  • Core Revenue(1), which excludes the non-cash impact related to warrants to purchase preferred stock, decreased to $50.7 million in Q2 2019 compared to $52.3 million in Q2 2018.
  • Net Loss decreased to ($0.6) million in Q2 2019 compared to a Net Loss of ($12.6) million in Q2 2018.
  • Adjusted EBITDA(1) decreased to $5.3 million in Q2 2019 compared to $8.8 million in Q2 2018.

Key Operating and Financial Metrics (Unaudited) (in thousands)

SoFi Co-Founder’s New Startup Aims to Raise Funds at $ 1 Billion (Bloomberg), Rated: AAA

Mike Cagney, the former embattled chief executive officer of Social Finance Inc., is raising more than $100 million for his new startup Figure Technologies Inc. at a $1 billion valuation just less than two years after its founding, according to people familiar with the matter.

San Francisco-based Figure uses blockchain technology to provide home equity loans online in just a few days, with approval happening in minutes. The company made its first loan in 2018, and is on pace to provide more than $80 million in loans this month alone, according to one of these people, who asked not to be named because the details are private.

As Gen Z Comes of Age, Credit Market Activity Shows Significant Growth (TransUnion), Rated: AAA

Gen Z, those individuals born in 1995 or after, increasingly took part in the consumer credit market during the first half of 2019. The newly released Q2 2019 Industry Insights Report from TransUnion (NYSE: TRU) found that growth is coming from the entire Gen Z demographic who are 18 years or older – not just those who became credit eligible for the first time.

Approximately 14 million Gen Z consumers (44% of this group) were carrying a balance as of Q2 2019, up from 11 million in Q2 2018, according to the report. The number of Gen Z consumers who were credit eligible (18 years or older) increased by 4.5 million in the last year, rising to 31.5 million in Q2 2019. Over the next three years, it is anticipated that another 13 million Gen Z consumers will become credit eligible.

Gen Z Consumers Carrying a Balance Rising at High Rates

Credit Product Q2 2019 Q2 2018 YOY Growth %
Auto 4,376,000 3,072,000 42%
Credit Card 7,746,000 5,483,000 41%
Mortgage 319,000 150,000 112%
Personal Loan 746,000 534,000 45%

Credit cards are the most popular product among Gen Z consumers, with 55% carrying a balance—though they still only constitute 5% of the U.S. population carrying card debt. Mortgages had the largest year-over-year growth rate spike with Gen Z consumers (112%), but from a low base. Mortgages are still the credit product Gen Z consumers are least likely to have, with only 0.5% of mortgages held by members of this generation.

The Percentage of Gen Z Consumers Carrying a Credit Balance is Growing (Data as of Q2 2019)

Credit Product Gen Z
(carrying a balance)
All Generations
(carrying a balance)
Gen Z
Percentage
Auto 4,376,000 86,064,000 5.1%
Credit Card 7,746,000 148,141,000 5.2%
Mortgage 319,000 68,368,000 0.5%
Personal Loan 746,000 19,556,000 3.8%

Q2 2019 Credit Card Trends

 Credit Card Lending Metric Q2 2019 Q2 2018 Q2 2017 Q2 2016
 Number of Credit Cards 437.1 million 420.0 million 409.8 million 391.0 million
Borrower-Level Delinquency Rate (90+ DPD) 1.71% 1.53% 1.46% 1.29%
Average Debt Per Borrower $5,645 $5,543 $5,422 $5,247
Prior Quarter Originations* 15.3 million 14.5 million 15.0 million 15.3 million
Average New Account Credit Lines* $5,773 $5,649 $5,817 $5,466

See TransUnions infographic here.

Atlanta-Based LendingPoint #17 on Inc. 500 List of Fastest Growing Private Companies in the USA (The Daily Times), Rated: A

Inc. Magazine today ranked commerce platform LendingPoint No. 17 on its 37th annual Inc. 5000, the most prestigious ranking of the nation’s fastest-growing private companies. LendingPoint joins companies such as Microsoft, Dell, Pandora, Timberland, LinkedIn, Yelp, Zillow, and many other well-known names who gained their first national exposure as honorees on the Inc. 5000. LendingPoint has hit successive funding records year-over-year and is on pace to reach $100 million per month in loan originations by the end of 2019.

Fintech Firm OppLoans Named to Inc. 500 for Fourth Consecutive Year (Globe Newswire), Rated: A

OppLoans has been named to Inc. magazine’s prestigious 2019 Inc. 500 list for the fourth year in a row. Only four companies on this year’s list, including OppLoans, have placed on the Inc. 500 at least four or more times. With a three-year annual revenue growth of 1,435%, OppLoans placed #321 on the annual ranking of the fastest-growing companies in the U.S., 19 spots higher than the firm placed in 2018. OppLoans has achieved rankings of #340 (2018), #219 (2017) and #445 (2016).

FINICITY TO POWER DIGITAL SOLUTIONS FOR EMPLOYER STUDENT LOAN CONTRIBUTIONS (Finicity), Rated: A

Finicity, a provider of real-time financial data access and insights, announced today the rollout of its Student Loan Account Verification product, which will simplify employer benefit repayment programs, where employers are looking to contribute to or help repay employee’s student loans.

Fannie, Freddie to Consider Alternatives to FICO Scores (WSJ), Rated: A

One firm’s dominance over the credit scores used to vet many U.S. mortgages is getting a shake-up.

Fannie Mae and Freddie Mac, two mortgage-finance firms that back nearly half of U.S. mortgages, will have to consider credit-score alternatives to Fair Isaac Corp.’s FICO score when determining a mortgage applicant’s creditworthiness, under a new rule issued on Tuesday by the mortgage-finance giants’ federal overseer.

Zoca Loans Review: Installment Loans for Bad Credit Borrowers (Moneycheck), Rated: A

By going through a simple online application process, you have the chance to obtain between $300 and $1,000 – all of which can be funded the very same day.

HSBC launched a digital lending platform for online personal loans (Business Insider), Rated: A

HSBC USA partnered with Amount, a tech provider for financial institutions, to launch a digital lending platform that streamlines online personal loan applications. Consumers can evaluate loan options, submit applications online, and receive a credit decision within minutes.

HSBC will initially lend up to $30,000 with terms ranging from two to five years and it says funds will be available as quickly as the next day. The bank will charge fixed monthly payments starting 50 days after customers receive the loan. Amount’s platform — which has cumulatively originated $6 billion in loans to 800,000 customers — has been customized to HSBC’s preferences, including its proprietary risk models.

Source: Business Insider Intelligence

Virtual Bank Aims to be Primary Account Engine Behind Fintech Brands (The Financial Brand), Rated: AAA

It’s Time For Regulators To Expand Opportunities For Smaller Investors (Forbes), Rated: A

In the past decade we’ve seen a new financial movement take shape: a focus on giving more investors a seat at the table. More and more people and organizations are realizing that investors of all income levels and backgrounds could (and should) have the opportunity to access more asset classes. In this technology-enabled age of access, data and transparency in investing, there is an opportunity to update our laws to ensure that smaller investors are not excluded from the opportunity to create wealth — opportunities that have emerged under the financial ethos of fintech: crowdfunding, peer-to-peer, financial literacy and inclusion.

Former Coinbase CTO Balaji Srinivasan Joins DeFi Blockchain Project Findora (Yahoo! Finance), Rated: B

Balaji Srinivasan, the former CTO of Coinbase, has just joined decentralized finance blockchain project Findora.

Tricolor Launches New, Affordable Auto Insurance for Low Income, Credit Invisible Consumers (Globe Newswire), Rated: B

Tricolor, the used vehicle retailer focusing on the sale and financing of vehicles to the Hispanic consumer, today unveiled a groundbreaking new affordable auto insurance option for low-income and credit invisible customers through its affiliate company Tricolor Insurance. After testing the product earlier this year, Tricolor will begin rolling out the new insurance offering throughout all of its markets in Texas and California.

Artivest Achieves Critical Platform Momentum, Announces Executive Leadership Appointment (Yahoo! Finance), Rated: B

To date in 2019, Artivest, a multi-billion-dollar alternative investment platform, has achieved exponential organic growth across nearly every aspect of the business, greater than any previous full calendar year in the company’s history. The firm has attracted more new investors, allocations, investment managers, and—most importantly, in regard to how the wealth management industry gauges the success of digital platforms—has surpassed $1 billion in new investments transacted online by high-net-worth investors into private funds, at low minimums.

Netflix alum Steve Swasey to lead communications at Healthline Media (MMM-Online), Rated: B

Healthline Media has hired Steve Swasey as VP of communications, a newly created role at the health-focused publishing company.

In the first half of 2016, he worked at online lending marketplace Lending Club as SVP of corporate communications.

United Kingdom

Funding Circle Shares Rise on Positive Report (Crowdfund Insider), Rated: AAA

Last week, online lender Funding Circle (LSE:FCH) released its 6-month report and the shares have responded positively to the numbers. Six-month Revenue was reported at £81.4 million versus H1 2018 at £63.0 million – up 29%. Loans under management rose 37% to £3.54 billion and originations jumped 14% to £1.19 billion.

Funding Circle went public in 2018 priced at 440 pence per share. Funding Circle raised a gross amount of £300 million garnering a market cap of around £1.5 billion.

RateSetter to introduce stress testing to provision fund (P2P Finance News), Rated: AAA

RATESETTER is planning to introduce stress testing to its provision fund over the next financial year.

The ‘big three’ peer-to-peer lender’s provision fund is a buffer that protects investors against losses should any of its loans default. Borrowers pay cash into the provision fund in accordance with RateSetter’s assessment of their creditworthiness.

LendInvest Secures £200 Million Investment from the National Australia Bank to Expand Reach in Buy-to-Let Market (The Fintech Times), Rated: AAA

LendInvest has now raised over £1.8 billion of debt and equity from investors, making LendInvest one of the largest non-bank mortgage lenders in the country.

This new funding expands LendInvest’s capacity to lend in the UK Buy-to-Let market. LendInvest launched its first Buy-to-Let mortgage product in late 2017 after agreeing a substantial funding line with Citigroup. LendInvest has already lent more than £370 million in Buy-to-Let loans and is taking market share in the bank dominated market. In June this year, LendInvest also become the UK’s first Fintech business to securitise its own portfolio of assets worth £259 million, which received a AAA rating from Moody’s and Fitch.

SME online fashion retailers face barriers to innovation, Klarna (Retail Tech Innovation Hub), Rated: A

Small online fashion retailers in the UK are open to embracing innovative technologies, but various challenges are preventing widespread adoption, according to research by Klarna.

In terms of challenges, 53% said the cost of introducing flexible payment options was the biggest barrier to adoption.

Source: Klarna

SME online retailers look to overcome barriers to realise innovation ambitions (Retail Times), Rated: A

The research  conducted across 100 UK SME decision makers at online retailers in 2019 — shows the UK’s SMEs understand the need to embrace flexibility and innovation. Over the next 12 months they plan to prioritise investing in flexible payment options (49%) and e-commerce capabilities (48%) to meet consumer demand for a frictionless shopping experience.

Tandem Bank leverages Open Banking to offer competitive mortgages (Finextra), Rated: A

Ex-RateSetter business finance head launches new P2P platform (P2P Finance News), Rated: A

RATESETTER alumni Brian Cartwright has launched new alternative property lender Nexa Finance, with a focus on the East Midlands.

Cartwright (pictured), managing director at Nexa, previously worked as head of business finance at ‘big three’ peer-to-peer lender RateSetter.

His new venture, which bills itself as a regionally-focused business lender, aims to connect East Midlands-based small- and medium-sized enterprise (SME) property developers and house builders with funders.

Personal Finance Society publishes P2P guide following uptick in queries (P2P Finance News), Rated: A

MEMBERS of the Personal Finance Society (PFS) have been showing an increased interest in peer-to-peer lending, leading the PFS to produce its own ‘good practice’ guide to P2P.

The financial planning trade body has partnered with Octopus Investments to create the guide, which tells advisers that recommending P2P products could help them to increase their own assets under management, adding that “for suitable clients, it could prove a useful vehicle for excess cash holdings which may currently fall outside of the adviser’s view.”

Atom Bank, iwoca, Modulr Finance, & Currencycloud, All Benefit from BCR Grant (Crowdfund Insider), Rated: A

The BCR has awarded £10 million each to the following platforms:

I Never Got Paid From Winning Wonga Fantasy League in 2010 (TechRound), Rated: A

I worked for Wonga.com in 2010, back when you couldn’t even go to the bathroom without hearing their jingle on the radio. Like most offices today, everyone put in £10 to play in the office fantasy league and with Van Persie and Rooney in their prime, this was my year.

After doing some calculations, my £160 owed to me in 2010 would now be worth £2,752. (based on £24 per month for 9 years)

Without the price cap, you have 4 of those years at £30 per month. Making the total figure £3,040.

But again, I am being kind. This does not include default charges of £25 per month for every missed payment.

China

Shanghai-based Zendai closes two P2P units worth US$ 1.4 billion as Beijing intensifies crackdown (SCMP), Rated: AAA

Zendai Group, a closely held private investment company in Shanghai, abruptly shut down two peer-to-peer lending units valued at 10 billion yuan (US$1.4 billion), as Chinese financial regulators ratchet up measures to clean an industry fraught with frauds and defaults.

Another Peer-to-Peer Lending Platform Stumbles (Caixin Global), Rated: A

Laocaibao, a peer-to-peer (P2P) lending platform ultimately owned by private conglomerate Zendai Group, is the latest casualty of the troubles that have engulfed the scandal-hit industry over the past three years.

Laocaibao has stopped providing loans and Zendai’s investment and consulting arm, which directed clients to the platform, has fired employees, according to statements from the companies and investigations by Caixin.

Peer to Peer Lender Fincera Targeted by Local Chinese Government in Demand to Cease Lending Operations (Crowdfund Insider), Rated: A

Fincera Inc. (OTCQB: YUANF), a China-based peer to peer lending platform providing access to capital for SMEs, has become the target of a local government attempt to shut down P2P lenders.

According to a note from Fincera, the Hebei provincial government, where Fincera is based, has requested that Fincera “cease P2P business operations.”

Fincera Announces Intention to Sell Kaiyuan Finance Center (Benzinga), Rated: A

To protect the interests of all its stakeholders-investors, borrowers, brokers, and employees, Fincera has announced its intent to sell the Kaiyuan Finance Center, which has an estimated valued of over RMB4.0 billion.

Fincera is the largest Hebei-based company operating in the peer-to-peer lending industry, comprising over 90% of the province’s market with approximately RMB9.0 billion in unpaid principal balance.

Fincera Inc. (“Fincera” or the “Company”) (OTCQB:YUANF), a provider of internet-based financing and ecommerce services for small and medium-sized businesses (“SMBs”) and individuals in China, today announced that businesses operating within the P2P (peer-to-peer) lending industry in Hebei province, including the Company, have received requests by the Hebei provincial government to cease P2P business operations. The Company vehemently disagrees with the request and is taking steps to protect its many stakeholders, including initiating the process of moving its business registration to Beijing where local regulators are supportive of the P2P industry.

Senmiao Technology Announces Unaudited Financial Results for First Quarter of Fiscal Year 2020 (Yahoo! Finance), Rated: A

Senmiao Technology Limited  (AIHS) (“Senmiao”), a provider of automobile transaction and related services and an operator of an online lending marketplace connecting Chinese investors with individual and small-to-medium-sized enterprise borrowers in China, today announced its unaudited financial results for the quarter ended June 30, 2019.

First Quarter of Fiscal 2020 Highlights

  • Total revenues increased by 3,975% year-over-year to $5,094,440 from $125,026
  • Gross profit increased by 758% year-over-year to $1,072,128 from $125,026
  • Loss per share decreased by 50% year-over -year to $0.02 from $0.04
European Union

German mobile bank N26 eyes eventual IPO, CEO tells newspaper (Reuters), Rated: AAA

Berlin-based digital bank N26 is planning an eventual stock exchange listing, its chief executive has told a German newspaper.

Google exec joins N26 as chief banking officer (Finextra), Rated: B

N26 today announced the appointment of Thomas Grosse as Chief Banking Officer. The newly introduced role is yet another step towards realizing N26’s ambition to become the first truly global and fully digital retail bank. As Chief Banking Officer, Thomas will oversee the set-up of regulated N26 banks and bank partnerships within the N26 Group, thus ensuring the highest standards in product, processes and customer experience across all markets.

Thomas will begin his new role at N26 this October, reporting directly to N26’s co-founder and CFO, Maximilian Tayenthal.

European Fintechs Escape Troubles Afflicting Established Banks (Bloomberg), Rated: AAA

Its latest fundraising gave Klarna, which facilitates online installment payments, a $5.5 billion valuation. European fintech companies raised $3.3 billion in venture capital in the first half of 2019, up from $1.9 billion in the same period last year, according to data compiled by CB Insights. In contrast, an index of European Union banks has dropped 39% the past 18 months.

FlixMobility and Klarna raise a lot of money (Tech.eu), Rated: A

Tech.eu Podcast hosted by Natalie Novick and Andrii Degeler is a show in which we discuss some of the most interesting stories from the European technology scene and interview leading entrepreneurs and investors from across the region.

EstateGuru Seeks to Carve Out €5 Billion of European Real Estate Financing Market (Crowdfund Insider), Rated: A

EstateGuru, a crowdfunding platform based in Estonia, is out with a release predicting it will claim €3-5 billion of the European real estate financing by 2025

EstateGuru adds that approximately 70% of SMEs lack access to credit and this is a major constraint to their growth. The company claims that 12% of all loans are set to be financed by alternative providers, including crowdfunding platforms, by 2025 as it appears to be interested in expanding into other financing verticals.

Barclays releases £100,000 for unsecured SME lending through app and online banking (Finextra), Rated: A

New research released by Barclays has revealed that over half of the UK’s small and medium enterprises (SMEs) have woken up at night with a new business idea (57 per cent), while the most popular time for an idea to be dreamt up is between 2-3 am (28 per cent).

Analysis revealed that almost half (48 per cent) of SMEs said that they are more creative at night, with over two fifths saying they are more productive outside of 9 – 5 working hours and keep a note pad and pen by their bed so they can jot down ideas. Half attributed this to having extra time to think away from daytime pressures.

In a High Street banking first, Barclays has launched £100,000 unsecured lending for SMEs on its award winning app and online banking platform, with thousands of SMEs set to benefit from access to faster finance.

German Fintech Finleap Announces New Business Unit “Finleap Connect” (Crowdfund Insider), Rated: B

FinLeap, the fintech start-up platform behind Germany’s SolarisBank, announced on Wednesday the launch of its new business unit, FinLeap Connect. According to FinLeap, the fintech platforms finreach solutions and infinitec solutions will become part of this business unit.

International

Global Yields Crash, GSKY for sale, LC earnings (PeerIQ), Rated: AAA

Today, more than $15 Tn in sovereign debt trades at a negative yield. In Germany, for instance, bond investors have moved from charging 75 bps last year to a willingness to pay for the privilege of providing < 0% money for 10 years.

Source: PeerIQ

GreenSky shares sank ~37% after a strong earnings report was paired with news that the marketplace was exploring a potential sale or merger.

Alternative Data: The Great Equalizer To Lending Inequalities? (Forbes), Rated: AAA

Alternative data has come into the spotlight in financial services, and it presages a significant shift in credit availability for unbanked and underbanked consumers. There are about 

Celsius Network Announces Increased Accessibility To Crypto-Backed Loans with Updated Terms for Borrowers (Business Wire), Rated: A

Celsius Network (work/), the industry-leading cryptocurrency platform, announces updated terms for borrowers aiming to provide millions of users with increased accessibility to low-interest crypto-backed loans. In addition, Celsius has reduced its minimum requirement for loan requests to $1,500. Recently Celsius announced it will expand its lending operations throughout Europe.

The latest updates to Celsius Networks lending service include:

  • Lowered minimum requirement for loan requests from $3,000 to $1,500
  • Up to 30% discount for CEL token holders paying loan interest in CEL with yearly rates as low as 3.47%
  • Borrowers can request a loan in USD or supported stablecoins
  • Loans are issued the same day
  • Members can apply through the Celsius mobile app or on the Celsius Network website

ONTOLOGY BLOCKCHAIN HIGH FIVES WITH DEFI (ICO Examiner), Rated: B

Ontology (ONT), a project offering linking and bridging solutions for multiple blockchains, has announced five new partnerships with companies operating in various geographical locations within the decentralised finance (DeFi) arena.

The latest handful of businesses to be attracted to Ontology’s framework of compatibility are Hong Kong registered Babel Finance, USA-focused crypto loan specialists SALT Lending, cryptocurrency services provider LendChain, Hong Kong-based Fountain Financial, and Chinese trading platform HOX.

Australia

CBA FY19 results a mixed bag, digital metrics positive and Klarna will be a hit (Verdict), Rated: AAA

CBA FY19 underlying net profit for the year to end June falls by 5% to A$8.49bn ($5.75bn). The bank’s overall results do not quite match analyst forecasts.  But there is a strong argument that in all the circumstances the results represent a resilient full fiscal.

Release of the CBA FY19 earnings also serve to highlight the bank’s success in upping its digital strategy.

Operating income is 2% lower on margin pressure.

Net interest income is down by 1.2% on lower retail mortgages margins and higher funding costs.

Business lending increases by 4% while retail mortgage growth is also strong delivering 4% volume growth for the year.

India

Faircent raises fresh funding from investors led by Das Capital & Gunosy Capital (India Times), Rated: AAA

Faircent.com, a P2P lending company, has recently raised capital in a funding round. The latest funding, led by Singapore-based Das Capital and Gunosy Capital, also saw participation by existing investors Starharbor Asia Pte Ltd, and M&S Partners Pte Ltd (Sin Growth Partner Pte Ltd).

Keep retail indulgence in check (livemint), Rated: A

Overspending is a big problem for many. “They buy things they don’t need with money they don’t have to impress people they don’t like. Not passing a judgement here, but money does buy some kind of happiness for many,” said Rachit Chawla, chief executive officer, Finway, a registered non-banking financial company (NBFC). 

Payday loans, digital lending platforms, and P2P lending have evolved, so has the penetration of credit card, personal loans, and the like. At a behavioural level, de-linking debt with shame has also made it easy for people to borrow.

Asia

Hexindai-backed Musketeer Completes Registration for Its P2P Platform in Indonesia (Yahoo! Finance), Rated: AAA

Hexindai Inc. (HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, today announced that its invested Indonesian online lending platform, Musketeer Group Inc. (“Musketeer”), has completed registration for its peer-to-peer (P2P) lending platform with the Indonesian Financial Services Authority (OJK).

Musketeer’s P2P platform, PT Technology Indonesia Sentosa, is among the early batch of lending companies in Indonesia that have registered with OJK.

Philippines to Relaunch OF Bank to Create Digital-only Bank (Regulation Asia), Rated: A

The Overseas Filipino Bank was launched in January to cater to overseas Filipino workers, who will more easily be able to access digital-only services.

Latin America

Fintech Debt Investors Follow Equity Dollars Into Latin America (Forbes), Rated: AAA

Venture capital investments in LatAm startups quadrupled to a record $2 billion in 2018 from $500 million in 2016, according to an annual review by the 

Financial report for the second quarter and six months period 2019 (Yahoo! Finance), Rated: B

  • VEF made a follow-on investment in FinanZero, a Brazilian online consumer loan marketplace, who closed a Series B investment round of SEK 100 mln (USD 10.5 mln).

Authors:

George Popescu
Allen Taylor

The post Thursday August 15 2019, Weekly News Digest appeared first on Lending Times.

Thursday February 14 2019, Weekly News Digest

OnDeck revenues

News Comments Today’s main news: SoFi invests in Apex Clearing. Zopa chairman steps down. Ratesetter ISA tops 17M GBP in first year. Assetz Capital surpasses 700M GBP in lending. Revolut denies getting Lithuanian bank license to influence politics. Today’s main analysis: OnDeck’s Q4 earnings review. Today’s thought-provoking articles: What’s happening with auto loans. How Amazon controls small businesses with lending. Banks […]

The post Thursday February 14 2019, Weekly News Digest appeared first on Lending Times.

OnDeck revenues

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi held talks to acquire a fintech company backing some of the hottest robo advisors as it eyes expansion beyond its lending roots (Business Insider), Rated: AAA

OnDeck Q4 2018 Earnings Review (Lend Academy), Rated: AAA

The company achieved much of what they set to do in 2018 and posted another solid quarter as they rounded out the year. Q4 2018 net income came in at $14 million on gross revenues of $109.5 million. The company ended the year with a total of $27.7 million in net income. Below is a snapshot of their Q4 and 2018 full year highlights.

As of Q4 2018 the company still had $246 million of excess debt capacity.

BB&T and SunTrust merger; Tech in Bank Earnings (PeerIQ), Rated: AAA

The Fed’s January 2019 Senior Loan Officer Survey showed that banks tightened standards for commercial real estate (CRE) loans. Overall, banks tightened standards for credit card borrowers. However, lending standards for most categories of consumer loans and C&I loans remained unchanged. Banks also reported weaker demand for both business and household loans.

Source: Federal Reserve, PeerIQ

BB&T agreed to buy SunTrust for $28.2 Bn – the first major mega-bank deal in a decade. This deal will create the sixth-largest US retail bank. The M&A is supported by a constructive regulatory environment fostered by the OCC and CFPB, among others. The previous large acquisition was the JP Morgan acquisition of Bank One in 2004.

A major motivation for the deal was the ability of both banks to pool resources to build better digital offerings. SunTrust has a FinTech focused fund and has partnered with FinTech lenders to provide home improvement and small business loans. Banks are investing billions in digital tech spend to maintain relevance with customers that are increasingly eschewing bank branches for a seamless, online, full-service banking and wealth management customer experience.

Auto Loans in High Gear (Liberty Street Economics), Rated: AAA

Total household debt increased modestly, by $32 billion, in the fourth quarter of 2018, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. Although household debt balances have been rising since mid-2013, their sluggish growth in the fourth quarter was mainly due to a flattening in the growth of mortgage balances. Auto loans, which have been climbing at a steady clip since 2011, increased by $9 billion, boosted by historically strong levels of newly originated loans. In fact, 2018 marked the highest level in the nineteen-year history of the loan origination data, with $584 billion in new auto loans and leases appearing on credit reports, up in nominal terms from 2017’s $569 billion. In this post, we take a closer look at the composition and performance of outstanding auto loan debt using the New York Fed’s Consumer Credit Panel (CCP), which is based on anonymized Equifax credit data and also the source for the Quarterly Report.

Amazon’s lending perpetuates the tech giant’s control over small businesses (Tearsheet), Rated: AAA

Amazon runs a marketplace with 2.5 million sellers, 24,000 of which had more than $1 million in sales on the platform in 2018. These sellers represent the potential customer base for the company’s lending model.

From this base of borrowers, Amazon has been able to reportedly lend over $1 billion in 2017, exceeding  $3 billion in total lending volume from its inception in 2011 to 2017. As for 2018, in its annual report, the company reported receivables outstanding from their lending program of $710 million, up from $692 million a year prior.

With access to detailed information and data on each seller, Amazon is able to mitigate lending risk substantially. Seller metrics only available to Amazon are utilized to determine a small business’s creditworthiness. Sales history, product offerings, customer service feedback, and shipping metrics enable Amazon’s lending business to have better insight into how to accurately issue loans. This allows Amazon to have an understanding of the health of each small business on its seller marketplace.

Goldman Sachs, Point72 and others invest $ 44 million in business credit startup Nav (Reuters), Rated: A

Nav, a startup that gives small businesses free access to their credit reports, said on Monday that it had raised $44 million from investors including Goldman Sachs Group Inc (GS.N), Point72 Ventures and Experian Ventures (EXPN.L).

Well Fargo Outage Points to Opportunity in Digital Banking (Lend Academy), Rated: A

Wells Fargo is still digging out from a PR disaster last week when the bank went offline for a large segment of customers due to a fire alarm triggered in a server facility in Minnesota. Customers could not access the mobile app, the website or ATMs. The incident has been used to highlight how big an opportunity there is for fintech firms or more nimble banks.

What the outage shows is that bank infrastructure is still stuck in the past, analysts rightly askedwhy Wells Fargo did not have the bank running on a cloud based system.

Digital bank Chime seemed to benefit from the news with more than 10,000 accounts being opened, a record 24 hour period for the startup.

new survey by Fraedom says 80 percent of banks believe challengers have impacted their business and 30 percent say they are their biggest threat.

Susan Ehrlich of Earnest (Lend Academy), Rated: A

Our next guest on the Lend Academy Podcast is Susan Ehrlich, the CEO of Earnest. They are one of the largest student loan refinancers in the country and they also offer personal loans. Back in 2017 Earnest was acquired by the student loan servicer Navient which was itself spun out from Sallie Mae in 2014.

Government Shutdown Slows SBA Lending Volume, Approval Percentage Dipped Slightly in January (GlobeNewswire), Rated: A

Business loan approval rates dropped three-tenths of a percent at regional and community banks in December 2018. Small bank approvals dropped a full percentage point from 49.9% in December 2018 to 48.9% in January.

Small business loan approval rates for big banks remained at a record high 27% in January 2019, according to the Biz2Credit Small Business Lending Index, which examines more than 1,000 small business credit applications made via its online lending platform.

Goldberg added that since reopening on January 28, her office has guaranteed more than 200 SBA loans worth $59.3 million.

Institutional lenders climbed up to 65.1 %, a jump of three-tenths of a percent from December’s mark of 64.8%.

Loan approval rates among alternative lenders rose from 56.6% in December to 57.3% in January, a jump of seven-tenths of a percent.

Citi rolls out new personal loan, online savings account (American Banker), Rated: A

Citigroup has launched a new consumer loan product and a new high-yielding savings-account as part of its rollout of its new digital bank.

The New York bank recently introduced Citi Flex Loan, which allows select existing Citi credit card customers to convert part of their credit lines to a loan with a fixed annual percentage rate, Mark Mason, Citigroup’s incoming chief financial officer, said Tuesday at an investor conference.

Square’s banking bid avoids backlash that doomed Walmart’s (American Banker), Rated: A

As Square seeks federal approval for a Utah industrial loan company, the fintech’s bid has so far avoided the kind of loud, public opposition that marred past ILC bids by higher-profile nonbanks.

Community banks still criticize the ILC charter as a banking loophole for non-financial firms, and the Independent Community Bankers of America opposes Square’s application.

Almost 60% of small business owners launch with less than $ 25,000 (CNBC), Rated: A

At least that’s according to entrepreneurs polled recently by Kabbage, a financial services and data platform serving small businesses. More than half of those polled, or 58 percent, started their businesses with less than $25,000. A third started with less than $5,000.

These numbers track with the latest data from the U.S. Census Bureau, which found that the median cost to start or acquire a company is about $25,000. It did find fewer businesses that begin with less than $25,000, only 46 percent, though that could be due to its inclusion of new owners who purchase existing operations as well owner starting from scratch.

LoanStreet Adds Commercial Lending Features for Financial Institutions (Crowdfund Insider), Rated: A

LoanStreet, an online platform that enables traditional finance like banks credit unions and other direct lenders to streamline the process of sharing, managing, and originating loans, has added new features. The SaaS platform now offers commercial loan origination and administration solution for any size financial institution, loan or deal volume.

LoanStreet’s new lending features include:

  • Built-in collaboration tools offering the flexibility to originate the loan best suited to your borrowers’ needs without sacrificing the ability to invite other financial institutions into the deal.
  • Single access point allowing all parties, including borrowers, lenders, attorneys and auditors, continuous and secure access to the same information.
  • Integrated platform from origination to maturity avoids re-keying, duplication of efforts and eliminates transfer errors and other critical information loss that occurs over time.
  • Efficient process management enabling online, borrower self-service of key administrative tasks — including online payment acceptance — while improving internal controls and information flow.
  • Automated reporting facilitating completion of all applicable regulatory and financial entries for you and every investor.

Velocity Investments sues woman for breach of contract, seeks ,500 in damages (Louisiana Record), Rated: A

Velocity Investments LLC, assignee of Lending Club Corporation, filed a complaint against Heather Darling on Feb. 12 in the 24th Judicial District Court. According to the lawsuit, the plaintiff states that the defendant has failed to pay off the balance of $22,495.23 plus interest on a contract between the parties. The defendant is accused of sums due on an open account and breach of contract.

Online Loan Companies Are No Easy Fix for Desperate Borrowers (Real Daily), Rated: A

Lending Club is currently the largest online lender in the world. By some estimates, Lending Club, which launched in 2007, facilitated anywhere between $35 billion and $55 billion in online loans in 2018.

Now as more financial institutions are beginning to extend loans, Americans are falling even deeper into debt again. Americans, as individuals and households, owed over $13 trillion dollars, collectively, in 2018.

Best News We’ve Heard All Day: More Single Women Own Homes Than Single Men (Pure Wow), Rated: A

Online loan marketplace LendingTree reports that on average, single women own around 22 percent of homes, while single men own less than 13 percent. The study states that the gender gap in housing across the country is particularly interesting “given the average woman in the U.S. only makes 80 percent of what the average man does.” Interesting, indeed. (We can think of another word for it.)

Thoma Bravo Is Buying Digital-Focused Mortgage Company (WSJ), Rated: A

Thoma Bravo LLC has agreed to buy mortgage software firm Ellie Mae Inc. for $3.7 billion, the latest indication that challenges in the home-lending market are spurring consolidation across the industry.

The transaction will give the private-equity firm control of a company whose technology has been used to help automate the closing of millions of home loans. Based in Pleasanton, Calif., Ellie Mae handles the technology that underpins the entire home-loan origination process, and its services are used in

INSIKT Changes Name to Aura (Business Wire), Rated: B

INSIKT, a mission-driven financial technology company that offers affordable loans to hard-working families, today announced that it has changed its name to Aura to expand its focus on creating greater financial health, independence and economic stability for millions in America.

Roostify Expands Advisory Board with Investment Virtuoso (Roostify), Rated: B

Roostify, the San Francisco-based digital lending platform provider, announced today the addition of financial services consultant Marshall Lux to its advisory board. Lux, a distinguished consultant, advisor and educator, brings more than 30 years’ experience in private equity to the rapidly expanding business and reflects Roostify’s commitment to perfecting a scalable operational model and further developing an ecosystem of technology partners and strategic alliances.

LendIt Fintech USA 2019 (LendIt), Rated: B

April 8-9
Moscone West
San Francisco

HIGHLIGHTED KEYNOTES

Sallie Krawcheck
CEO & Co-Founder
Ellevest

Rob Frohwein
CEO & Co-Founder
Kabbage

Steven Streit
CEO
Green Dot

Mike Cagney
Co-Founder
Figure

United Kingdom

Zopa chairman Giles Andrew to step down after 15 years (Independent), Rated: AAA

Zopa’s co-founder Giles Andrew is to step down as chairman after 15 years at Britain’s oldest peer-to-peer lender.

Zopa appoints Virgin veteran McCallum as chairman (Finextra), Rated: A

P2P lender Zopa has appointed former Virgin Management CEO Gordon McCallum as chairman as it gears up for the forthcoming launch of its new banking venture.

Ratesetter ISA tops £175m in first year (AltFi), Rated: AAA

The peer-to-peer lending platform said its ISA accounts for one-fifth of its £830m of funds under management.

Peer-to-peer lending platform Ratesetter said it has been “blown away” by the popularity of its first ISA product, which has hit £175m of subscriptions a year after launch.

Assetz Capital surpasses £700m lending mark (Bridging and Commercial), Rated: AAA

Assetz Capital has now lent over £700m to SMEs and property developers since launching in 2013.

The P2P lending platform has enjoyed significant progression, providing over £200m of funding in the eight months since it surpassed the £500m lending milestone in June 2018.

Former Assetz Capital founder launches fintech consultancy (AltFi), Rated: A

The co-founder of one of Europe’s largest peer-to-peer lenders has launched a fintech consultancy to help young firms “avoid some of the mistakes made by the early incumbents of the industry”.

Former Assetz Capital chief credit officer Andrew Holgate will lead a team of City veterans at consultancy Equitivo, which will help growing fintech firms raise cash, focus on strategy, trim operations and boost performance.

‘There is no magic bullet, people will get P2P over time’ (FT Adviser), Rated: A

The chief operating officer of peer-to-peer platform Relendex, Max Lehrain, has concerns about the Financial Conduct Authority’s crack down on P2P lenders and crowdfunding platforms.

UK challenger bank Starling secures £75m for European expansion (Fintech Futures), Rated: A

Life is sweet for UK challenger bank Starling as it has raised £75 million in funding for its expansion plans in Europe.

It got £60 million in a Series C round led by Merian Global Investors, including the Merian Chrysalis Investment Company.

Monzo Launches First 100 Business Accounts (Crowdfund Insider), Rated: A

UK challenger bank Monzo announced on Monday the launch of its first 100 business accounts. This news comes just a few months after Monzo revealed it was considered business banking, with Founder and CEO, Tom Blomfield, stating 2019 plans included business accounts. Speaking about the new accounts, Monzo reported:

Main Street banks say fintechs like Monzo, N26 and Chime pose the biggest disruptive threat to their businesses (Business Insider), Rated: A

Main Street banks believe upstarts like Monzo, N26 and Chime, known as challenger banks, pose a significant threat to their business, according to a recent survey.

Fraedom, a credit card specialist who works with companies like Visa, SunTrust, and Bank of Montreal, surveyed bankers on what some of the biggest impacts to their business will be in 2019. The vast majority (80%) believe challenger banks have an increased impact to their business, and 30% pegged the new competitors as the biggest disruptive threat to their business in 2019.

Tandem Bank boss calls for rate cut to kick-start UK economy (AltFi), Rated: A

Ricky Knox, chief executive of app-only lender Tandem Bank called on the central bank to cut rates to kick-start growth, as currently savers are locking away cash in specialist higher interest accounts.

Peer-to-Peer Lending and Brexit (4th Way email), Rated: A

Shares plunged and the pound plummeted to a 31-year low when the UK voted to leave the EU. More recently chaotic Brexit negotiations indicate a disorderly exit that could see investors avoid traditional investments in the UK, but what does this mean for peer-for-peer lending and should lenders be worried?

Bank and P2P lending is far less volatile than equity investing, because:

  • It is short-term orientated.
  • Lenders easily diversify widely across thousands of investments – loans – as opposed to a typical stock investor who diversifies across hundreds of shares through share funds.
  • In P2P lending, buy/sell price swings, often fuelled by uncertainty, are usually irrelevant, since lenders hold loans for the full term.
  • Lenders are usually in a better place in the queue compared to equity investors when recovering losses is involved, which can mean smaller losses on individual investments (loans) that go wrong.
  • With lending being data driven, recession conditions are easier to plan for. A turbulent P2P Brexit would mean a tripling of defaulting loans in some kinds of lending and cut-price sales of borrowers’ assets. Interest rates and reserve funds are prepped for most disasters, leaving a very low chance of a sizeable overall loss on a well-diversified, low-risk lending portfolio.

Most investors in peer-to-peer lending are using platforms that are run by people with relevant banking experience. The banks, when we look at their bread-and-butter lending, have found it easy to maintain net profits even during multiple downturns over the past 20 years, which includes the Great Recession. This is across the spectrum of lending, from buy-to-let mortgages to personal loans and credit cards. Perhaps surprisingly, retail and small business lending combined was still profitable for the UK’s high street banks during the 2008 and 2009 crash.

Learn more about 4th Way here.

Mojo Mortgages secures £7million to revolutionise the UK mortgage experience (Manchester Digital), Rated: A

Mojo Mortgages, a fintech start up based in the North West has secured £7million in Series A funding to transform the mortgage experience.

Mortgage Brain boosts user numbers (Mortgage Introducer), Rated: A

Mortgage Brain welcomed over 2,000 new customers during 2018 with a host of national networks, corporate firms and individual adviser firms choosing to use one or more of its products and services.

A number of new customers – including Censeo, Intelligence Mortgage Solutions, Your Expert Group, Affinity Mortgages and Your Mortgage Solutions – as well as a number of contract renewals and user license increases, have all contributed to Mortgage Brain’s growth throughout 2018.

UK inflation below official target for first time in 2 years (Miami Herald), Rated: A

Lower energy costs as well as a waning impact from the pound’s sharp fall in the aftermath of the country’s Brexit vote have helped consumer price inflation in Britain fall below the Bank of England’s target of 2 percent for the first time in two years.

The Office for National Statistics said Wednesday that consumer prices rose by 1.8 percent in the year to January, down from the 2.1 percent recorded in the previous month. Inflation has been consistently falling since August as the effects of the pound’s decline drop out of annual comparisons. The latest decline was further accentuated by a fall in the price of electricity, gas and other fuels.

Inflation is now at its lowest since January 2017, when inflation was also 1.8 percent.

Arbuthnot Commercial ABL delivers £12m refinancing facility (Bridging Loan Directory), Rated: B

Arbuthnot Commercial Asset Based Lending Ltd. is delighted to announce it has completed a £12m refinancing for L&C Limited, trading under Red 7 Marine (“R7M”), provider of nearshore access solutions to the UK marine construction and maintenance industry, and an investee company of Perwyn Private Equity (“Perwyn”).

European Union

UK fintech unicorn Revolut forced to deny links to Russia (Business Insider), Rated: AAA

Unicorn challenger bank Revolut has strongly denied claims that its activities in securing a banking license in Lithuania are attempts to interfere in the country’s politics.

Revolut was granted a European Banking License in Lithuania in December but has since faced claims of interfering in the country’s political processes by Lithuanian Member of Parliament Stasys Jakeliūnas, chair of the Lithuanian parliament’s budget and finance committee.

German Lending Marketplace auxmoney Overtakes Midsize Banks in Consumer Loan Origination (Crowdfund Insider), Rated: AAA

Düsseldorf-based Fintech auxmoney has surpassed its targets in 2018. Loan volume increased by 74 percent compared to 2017. Raffael Johnen, Founder and CEO of auxmoney, commented:

“While the major German banks are in crisis mode, the leading German fintechs are always setting new records. With our continuously strong growth, we managed to be the first credit marketplace to catch up with medium-sized banks in Germany.”

It issued new loans totaling €551 million last year.

Auxmoney Now Stands for 0.5% of the Market of German Consumer Loans (P2P-Banking), Rated: A

German p2p lending marketplace Auxmoney announced that it has facilitated 551M EUR in consumer loans in the year 2018. Up 74% compared to 2017. Approximately 73,000 loans were financed. That would mean Auxmoney now stands for a market share of roughly 0.5% of the market.

Gymshark teams up with Klarna to announce pay later service (RLI), Rated: B

Fitness wear brand Gymshark has announced the launch of a pay later service in the UK, Sweden, Norway, Finland and Denmark. The company is now in a partnership with Klarna, a payments provider which will offer Gymshark the new payment option. The payment service will allow online shoppers to try on items at home before paying for the order.

Instantor releases report on how machine learning is revolutionising credit risk management in Europe (Fintech Finance), Rated: B

Instantor, the 3rd. fastest growing Swedish FinTech who makes tough calls easy within credit risk management presents “Credit Risk Management 2019 – How Do You Stack Up?”, a report based on a survey conducted by Instantor across Europe among top executives within leading financial organisations. The report reveals that two-thirds of these players are well underway to implementing machine learning (ML) and the majority benefits from its implementation within credit risk management.

International

30 Under 30 Europe: The Young Money Merchants Shaping Financial Markets In 2019 (Forbes), Rated: AAA

Finance is hardly known for its youthfulness, yet this year’s Finance 30 Under 30s are proving that an old industry can learn new tricks. These young venture capitalists, fintech entrepreneurs, crypto enthusiasts and Millennial bankers, with an average age of just 27, are reshaping the sector and transforming our relationship with money.

The Next Global Financial Meltdown Is Just Around the Corner (Equities.com), Rated: AAA

As Bloomberg reported last year:

Shadow banking in China has ballooned into a $10 trillion ecosystem which connects thousands of financial institutions with companies, local governments and hundreds of millions of households. The practice is now at the center of a Chinese government-led regulatory crackdown aimed at defusing financial risks that threaten the wider economy. Unlike in the U.S., traditional commercial banks drive shadow banking, or unregulated lending, in China. That’s because the banks have been able to keep shadow-banking assets off their balance sheets, thereby sidestepping regulatory constraints on lending.

About 169 million Chinese, or about 12 per cent of the population, have invested in wealth management products online, a rise of 66 per cent from two years ago, according to a Moody’s report published this month. Essentially, they are putting money into the shadow banking system.

“The picture is different in the European Union. Here, the shadow sector now accounts for perhaps 30–40% of total financial intermediation. But it is growing. Between 2012 and 2016, shadow banking as broadly measured expanded by almost 40% in the eurozone.

Atlanta-based IDology to Be Acquired by GBG for $ 300m (PR Newswire), Rated: A

GBG, the UK-headquartered Identity Data Intelligence specialist, today announces that it has conditionally agreed to acquire the entire issued share capital of IDology, a US-based provider of identity verification and fraud prevention services, for $300m (£233m) in an all-cash transaction.

Nexo lending to offer crypto-backed loans with Blockport exchange (Bankless Times), Rated: B

Blockport users will be able to use the Nexo platform to get crypto loans, offering them another alternative to selling their cryptocurrencies for fiat currencies. Instead of selling they cryptocurrency assets, Blockport users can now keep their crypto, with all potential upsides, and leverage them to get instant access to cash.

Australia

Next Growth Wave: Fintech (Seeking Alpha), Rated: AAA

In this article we look at some fintech companies, beyond investor’s normal horizon of the United States. In Australia there is a small cluster of listed fintech companies that have started to explode. Some have made gains of 400% in a year and more than 1,000% on the back of strong revenue and turnover growth. Moreover because Australian companies lack access to large scale V.C. investments, technology companies often need to capital raise through a public listing.

Zip Co. (ASX: Z1P)

Zip Co. is quite similar to Afterpay and in some ways its closest competitor with an established market position. However in addition to payment splitting, it also offers interest based loans and is different in other ways.

  • Zip Co. is smaller with a market capitalization of $380 M AUD (about $266 M USD), but still has 12,600 retail partners including most of Australia’s largest retailers, however it hasn’t yet entered the U.S. or the U.K.
  • Zip Co. has Zip Pay, which provides a payment splitting application with no interest, but with more flexibility in length of time or repayment amount than Afterpay’s solution.
  • Zip Co. also has Zip Money also provides loans for purchases above $1,000 AUD, with a 3 month interest free period, but with an establishment fee of up to $99.
  • Source: Seeking Alpha

Labor’s negative gearing policies could hurt first-home buyers (Your Mortgage), Rated: A

“Despite Australia’s tight regulations on foreign investment, other overseas property markets are tighter – including China, Canada and New Zealand,” Driscoll said. “Unlike in Australia, the Chinese lack many appealing alternative investments at home and, due to government crackdowns on peer-to-peer lending, private equity funds and with the majority of their property being leasehold, many investors are forced to look elsewhere.”

India

India’s fintech future looks bright, but it needs to find its raison d’être (India Times), Rated: AAA

Yet there is more room for growth. The market in India is still small; far more deals are being done in China, and for far higher valuations. Last year alone, venture capital investments into Chinese fintechs were more than 10 times larger than those in India, with 75 percent more deals.

Although the value of investments in India declined by 21 percent in 2018 over the previous year, the number of deals actually rose 12 percent, making 2018 the most active year on record for fintech financing.

RBI may change Rs 10 lakh lending cap on P2P platforms, say P2P players (India Times), Rated: A

Peer to Peer or P2P players are hopeful that the comprehensive financial data sought by the Reserve Bank of India might help the regulator to take some major policy decisions concerning the industry.

Asia

Hundreds of unlicensed P2P lenders still operating in Indonesia (The Jakarta Post), Rated: AAA

The Financial Services Authority (OJK) has found that 231 illegal peer-to-peer lending (P2P) providers, including those from other countries, have been operating in the country since January.

An Overview on Peer-To-Peer Lending in Indonesia (Legal Business Online), Rated: A

Two years following the enactment of Financial Service Authority (Otoritas Jasa Keuangan/”OJK) Regulation No. 77/POJK.01/2016 of 2016 (POJK 77/2016), Peer-to-Peer Lending (P2P Lending) has grown popular in Indonesia. Based on data from OJK per Oct. 2018, a total of 15,990,143,141,355 rupiah has been distributed to the borrowers in P2P Lending. It has grown 432.5% from Jan. 2018 until Oct. 2018. Until Dec. 2018, the number of P2P Lending Platform which has been registered and supervised by OJK has reached 88 companies, one of them has been given a license.

Canada

Finastra announces Siobhan Byron as new Head of Technology Enabled Managed Services (Finastra), Rated: A

Finastra has appointed Siobhan Byron as Senior Vice President and Head of Technology Enabled Managed Services (TEMS). In this role, she oversees planning and execution, sales and marketing, research and development and product management across four lines of business including Checks, Enhanced Services, Student Lending and Canadian Mortgage Technology, all in the Canadian market. She oversees more than 1,300 employees that make up Finastra’s TEMS business.

Authors:

George Popescu
Allen Taylor

The post Thursday February 14 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 17 2019, Weekly News Digest

marketplace securitizations

News Comments Today’s main news: RateSetter surpasses 3B GBP in lending. SoFi Money bank-like offerings. LendingClub land on 2019 Bloomberg Gender-Equality Index. HeZhong International to list on Nasdaq. Robo.cash doubles investors in 2018. Kabbage to provide point-of-sale loans to Alibaba shoppers. Today’s main analysis: Marketplace lending securitization slowed in Q4 2018. Today’s thought-provoking articles: Consumer credit continues to grow. Loan default […]

The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.

marketplace securitizations

News Comments

United States

United Kingdom

International

Other

News Summary

United States

SoFi Offering Bank Like Services, But it is Still Not a Bank (Crowdfund Insider), Rated: AAA

Today, SoFi is distributing more invites to their bank-like services – SoFi Money, a service announced last summer. SoFi is offering consumers the following:

  • No “freakin” fees, including annual, transactional, overdraft, or any other account fees.
  • Higher interest rates, a “whopping” 2.25% APY on your money.
  • Free ATM usage as SoFi will reimburse the fees.
  • Mobile first as your phone is your [bank] branch.
  • Secure – Accounts are FDIC insured up to $1.5 million.³

More MDs, fewer residents in SoFi’s next student loan securitization (Asset Securitization Report), Rated: A

Social Finance’s next student loan securitization features higher exposure to physicians, and fewer of them are still in a residency program, according to rating agency reports.

Borrowers with medical and dental degrees are considered to be good credits in part because they have some of best employment prospects. They account for 28.8% of borrowers in the pool of collateral who have medical degrees, up from 22% for SoFi’s previous student loan securitization, according to Moody’s Investors Service.

LendingClub Selected for 2019 Bloomberg Gender-Equality Index (LendingClub), Rated: AAA

LendingClub Corporation (NYSE: LC), today announced that it is one of 230 companies selected for the 2019 Bloomberg Gender-Equality Index (GEI), which distinguishes companies committed to transparency in gender reporting and advancing women’s equality. The index doubled in size from 2018 and includes firms from 10 sectors, headquartered across 36 countries and regions. Collectively, these firms have a combined market capitalization of USD 9 trillion and globally employ more than 15 million people, of which 7 million are women. Thirteen markets are represented for the first time this year, including Argentina, China, Israel, and South Africa.

Securitization in Marketplace Lending Slowed in Q4 2018 (Lend Academy), Rated: AAA

Issuance totaled $2.6 billion, which is the slowest pace of issuance in 5 quarters and was related to market volatility according to PeerIQ. Volume decreased 44% from the prior year period and dropped 25% quarter over quarter. Total issuance in 2018 was $15.3 billion and included newer issuers Upgrade and Enova. PeerIQ expects that Upgrade and Enova will continue to participate in the securitization market going forward. While Q4 represented a drop in deals, cumulative issuance still stands at $44.5 billion across 142 deals which is a significant amount.

Source: Bloomberg, PeerIQ

We should also point out that LendingClub sold more than $1 billion in CLUB certficates in 2018 which likely reduced their securitization volume in 2018.

Source: Lend Academy

Fed Affirms Flexibility on Rate Hikes (PeerIQ), Rated: AAA

Consumer credit continues to grow. The Fed reported that consumer credit outstanding grew at an annualized rate of 6.7% in November to $3.98 Tn. This is the third month out of the past four that consumer credit grew more than $20 Bn, for the first time in four years.

Source: Federal Reserve, PeerIQ

Experian: Loan Default Rates Rose In Dec (PYMNTS), Rated: AAA

According to the S&P/Experian Consumer Credit Default Indices, which the companies said in a press release represent a comprehensive measure of changes in consumer credit defaults, the composite rate rose six basis points from December to 0.89 percent. The bank card default rate rose 25 basis points to 3.34 percent, while the auto loan default rate jumped 10 basis points to 1.03 percent. The default rate on first mortgages was three basis points higher at 0.67 percent.

What’s more, S&P Dow Jones Indices and Experian said that all five of the metropolitan statistical areas showed a higher default rate in December of 2018. In Miami, it increased 41 basis points to 1.93 percent, while New York saw a 13 basis-point increase to 0.96 percent and the Chicago default rate was up four basis points to 0.88 percent. In Dallas, the default rate ticked up three basis points to 0.85 percent, while in Los Angeles it was up two basis points to 0.52 percent.

Source: PRNewsfoto/S&P Dow Jones Indices

Fiserv to acquire First Data for $ 22bn (Fintech Futures), Rated: A

A giant will roam the fintech land as Fiserv will acquire First Data in an all-stock transaction of $22 billion.

LendingTree Ranks Most Competitive Housing Markets (LendingTree), Rated: AAA

Key Findings:

Denver, Los Angeles, and Portland, Ore., have the most competitive buyers in the country. Buyers in these areas have higher than average credit and the ability to put down a larger down payment.

Birmingham, Ala., Virginia Beach, Va., and Pittsburgh have the least competitive buyers in the country.Living in a less competitive market can be beneficial for buyers as it means that the path to homeownership is less challenging than it is in other parts of the country. For example, in these three areas, only 43% of mortgage shoppers had prime credit, compared to an average of 49% across the 50 largest metros in the U.S.

Roostify Enables Digital Mortgage Solution for Glacier Bancorp (BusinessWire), Rated: A

Roostify today announced that Glacier Bancorp, Inc. has launched a digital mortgage solution powered by Roostify. Glacier Bancorp, Inc. is a regional bank holding company providing commercial banking services in 104 communities through 164 banking offices in Montana, Idaho, Colorado, Utah, Washington, Wyoming and Arizona. The company holds total assets of $11.9 billion and shareholder equity of $1.5 billion.

Joust launches a digital bank for gig-economy workers (American Banker), Rated: A

The fintech startup Joust is launching a mobile banking app Tuesday designed for the 56.7 million Americans who rely on freelance income.

The product comes with a bank account, a merchant account, and a way to get quick credit. Behind it is a network of community banks that will gather the deposits the app brings in.

Snoop Dogg Invests In Klarna, Sweden’s $ 2.5 Billion Unicorn (Forbes), Rated: A

Klarna, the Swedish financial technology giant valued at $2.5 billion last year, has a new addition to its shareholder register from the most unlikely source.

Millionaire American rapper Snoop Dogg, aka Calvin Broadus, has today become a minority shareholder in the company which offers buy-now-pay-later services at 100,000 retailers in Europe and across the U.S.

2019 business: 5 trends that will dominate 2019 (Business Report), Rated: A

1. Consumers demand data control:  a Deloitte report shows 71% of purchased data is … inaccurate.

2. Alternative lending will surge: It makes sense that non-bank lending will continue to grow, not only was 2018 a big year for the industry but, more importantly, 80% of small business loans are rejected.

6 Personal Loan Lenders That Accept Cosigners (Credible), Rated: A

Not all personal loan lenders allow you to add a cosigner to your physical or online application, but there are some that do. Here are six lenders that allow cosigners on their applications.

  1. Freedom Plus
  2. Laurel Road
  3. Lending Club
  4. Lightstream
  5. OneMain Financial

What happens to robos in a downturn? (Financial Planning), Rated: A

As stocks soared to record highs over the past decade, robo advisors amassed billions of dollars in investable assets. But now with the onset of ominous market indicators and volatility, advisors say they are worried about how automated investment platforms will perform during a major market downturn and what that might mean for their bottom lines.

“It is a wild unknown,” says Josh Pace, president of the custodian TCA by E-Trade.

SMB BANKING: THE NEXT WAVE OF INNOVATION (LendIt), Rated: A

Key findings address:
  • How the largest banks, regional banks and community banks differ in their approaches to blending hi-tech and hi-touch customer interactions
  • Who are emerging SMB-focused fintech companies and partnerships to watch
  • What banking functions and features are most sought after by SMBs
  • How mobile apps are being designed specifically with SMB customers in mind
  • Why big data and artificial intelligence are key to integrated financial dashboard and advisory applications
White Oak Healthcare Finance, LLC (“White Oak”) today announced it acted as sole lender and administrative agent on the funding of a senior credit facility for GMF Capital (“GMF”) and Meridian Senior Living (“Meridian”). The funds were used to acquire assisted living/skilled nursing facilities located near Providence, Rhode Island.

FundThrough Engages 919 Marketing to Fuel U.S. Expansion (PRWeb), Rated: B

FundThrough, North America’s fastest growing automated, tech enabled invoice factoring company and a power player in the fintech SMB (small and midsized businesses) working capital space, has engaged 919 Marketing, a leading national franchise marketing agency offering content marketing and public relations services to all companies (franchise or non-franchise), to generate consistent brand awareness and accelerate expansion in the U.S. markets.

Fed not an impediment to fintechs’ charter ambitions (American Banker), Rated: B

Comptroller of the Currency Joseph Otting on Wednesday downplayed concerns that applicants for the agency’s new fintech charter may face resistance from the Federal Reserve Board.

Some in the fintech industry are raising alarm that the Fed may balk at allowing holders of the new special-purpose charter into the payments system, which could reduce the overall value of the charter.

United Kingdom

RateSetter Milestone: Online Lender Surpasses £3 Billion in Lending (Crowdfund Insider), Rated: AAA

UK based peer-to-peer lender RateSetter announced on Tuesday it has surpassed £3 billion in online lending. RateSetter reported that the milestone follows a successful year, with the lender originating more than £700 million of new lending and active loans under management grew to £820 million.

RateSetter also revealed that more than 600,000 customers have used its lending platform to invest or borrow. To date, investors have lent £1.9 billion to individuals and £1.1 billion to businesses. A total of £2.2 billion has been repaid by borrowers, generating returns of £120 million for RateSetter investors, who have enjoyed an average annual interest rate of 4.4% per year since RateSetter’s launch in 2010.

Rapper Big Narstie named among celebrities joining Zopa hotline for a day (P2P Finance News), Rated: AAA

PEER-TO-PEER lender Zopa is making four celebrities honorary ‘Zopians’ for a day next week.

It has launched a “FeelGood Hotline” to banish the January blues that will be staffed by pop star and TV host Frankie Bridge, broadcaster Lauren Laverne and rapper Big Narstie (pictured) on 23 January.

Boxing icon Frank Bruno will also be on the hotline.

UK challenger bank Tandem eyes IPO (Fintech Futures), Rated: A

UK digital challenger bank Tandem has got its young beating heart set on an IPO within the next few years.

In a brief written and video update, it looks to the future and the past. For example, it cites its recent $15 million investment from Hong Kong for Asian market expansion plans.

Tide Collaborates With ClearBank to Transform UK SME Banking Market (Crowdfund Insider), Rated: B

Tide, a UK-based SME challenger banking, announced on Monday it has formed a new partnership with ClearBank to help transform the UK SME banking market.

Tide reported that through its support, ClearBank has applied for a grant from Pool A of the Capability and Innovation Fund that forms part of the £775 million RBS Alternative Remedies Package, a government-backed competition. 

A quarter of UK consumers will have a neobank account within five years (Business Insider), Rated: A

Currently, 9% of Brits, equating to 4.5 million people, have opened an account with a digital-only bank, according to the study. By 2024, a further 16% of the population, or 8.5 million people, intend to do the same.

Source: Business Insider

ARBUTHNOT COMMERCIAL ASSET BASED LENDING LTD. SUPPORTS MBO OF PLUMBWORLD WITH £3.5M STOCK ONLY FACILITY (Arbuthnot Latham), Rated: A

Arbuthnot Commercial Asset Based Lending Ltd. (Arbuthnot Commercial ABL) is pleased to announce the completion of a bespoke £3.5m transaction to support the management buy-out of Online Home Retail Limited (trading as www.plumbworld.co.uk), one of the UK’s leading e-commerce retailer of bathroom related products, from Grafton Group PLC, an international distributor of building materials.

BBVA name dropped in Atom Bank takeover talks (Fintech Futures), Rated: B

BBVA is one of the names coming up in a potential takeover of the UK digital challenger Atom Bank.

Sky News has learnt that Atom is in talks to appoint Citi to advise its board on options for the business.

Accountants Look Out (Fintech Finance), Rated: B

Two thirds (66%) of accountants surveyed said that they do recommend external finance providers to their clients. Whilst these recommendations will be based on the need of any given business, they also indicated their preferred source of funding. Half (50.8%) indicated that they would recommend their clients speak with a bank about their finance needs. Interestingly, more than a third (36.3%) are recommending an invoice finance provider ahead of a business loan provider (33.66%).

China

HeZhong International, Chinese P2P Lender, Seeks $ 5.8 Million Nasdaq Listing (Capital Watch), Rated: AAA

The Shenzhen company hopes to raise up to $5.8 million in New York under the symbol “HZ,” according to its prospectus filed with the U.S. Securities and Exchange Commission.

On its online platform, HeZhong matches borrowers and investors, facilitating mostly consumer loans ranging from $437 to $2,200. It also issues car loans in the amounts ranging between $2,900 and $29,200.

HeZhong IPO: Tempting But Risky With 3,330% Revenue Growth (Seeking Alpha), Rated: A

  • Based in Shenzhen, China, HeZhong offers an online peer-to-peer lending marketplace, providing consumer and automobile loans to the Chinese borrowers and risk-adjusted returns to the investors.
  • Certain investors will believe that the interest rates seem quite appealing. Annual interest rates are between 8% and 15%, and usual tenures are from 7 days to 360 days.
  • The year 2018 was also great in terms of profitability. The company went from reporting losses from operations of -$1.1 million to report operating profit of $5.6 million.
European Union

Robo.cash doubles new investors in 2018 (P2P Finance News), Rated: AAA

LATVIAN peer-to-peer lending platform Robo.cash has reported that it doubled its investor base in 2018 as it expanded its product range and scaled up its lending.

The P2P payday lender said the total volume of investments on its platform hit €5m (£4.45m) after a strong year, representing 93 per cent growth. Meanwhile, it attracted 3,200 new investors, twice the number in 2017, with the majority coming from Germany.

Investment in European Companies Remains Steady but Deal Flow Dives (Crowdfund Insider), Rated: A

Dow Jones has published their Q4 VentureSource report today and while investment in European companies “held steady” deal flow dropped.

The report indicates that the number of deals in Q4 stood at 729. In comparison to the prior quarter, it dipped slightly from 738. When you compare year over year quarters the discrepancy is greater as Q4 2017 delivered 865 separate deals.

In total amount raised, Q4 2018 came in at € 5.19 billion. This is a decline from Q3 at €4.98 billion. But year over year the amount was down as well as Q4 2017 saw € 5.6 billion raised.

Better systems can aid business of giving money to tackle poverty (Breaking News), Rated: A

On a visit to Ethiopia last week, the Taoiseach chose to visit one of the most impoverished areas of the world and witness, first hand, profound poverty.

While there, he was introduced to a woman who had bought four potentially life-saving sheep with a micro-loan provided by Irish Aid.

Irish Aid is operated by the Department of Foreign Affairs. It is, effectively, managed on behalf of us citizens.

International

Kabbage to provide point-of-sale loans to Alibaba shoppers (American Banker), Rated: AAA

Kabbage, an online lender to small businesses, is now providing point-of-sale loans to small businesses that buy things on Alibaba’s online shopping site, the two companies announced Monday.

Under the program, which is called Pay Later, small-business owners can get credit lines of up to $150,000 for their orders on the site.

White Oak Global Advisors Surpasses $ 2.5 Billion of Loan Originations (AP News), Rated: A

White Oak Global Advisors, LLC (“White Oak”), today announced it funded over $2.5 billion in loans in 2018.

Klarna links up with Daniel Wellington to allow shoppers to slice their purchase and pay over time (Klarna), Rated: B

Today, global payments provider, Klarna announced a new collaboration with Daniel Wellington, maker of classic and timeless watches. Loyal shoppers of Daniel Wellington will now benefit from Klarna’s newest payment option, which allows customers to pay for their watches and accessories in 4 equal interest-free installments collected bi-weekly from the shopper’s chosen debit or credit card.

India

Blockchain, AI providing traction to India’s crowdfunding platforms (Financial Express), Rated: AAA

Although crowdfunding in India is at a nascent stage, with only 15 notable crowdfunding platforms (CFPs), the concept holds immense potential for the country’s startup ecosystem.

A World Bank report states crowdfunding has emerged as a multi-billion dollar global industry, and is expected have a volume of $300 billion by 2030.

Authors:

George Popescu
Allen Taylor

The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.

Thursday December 6 2018, Daily News Digest

Consumer Spending

News Comments Today’s main news: Zopa gets banking license. SoFi cuts mortgage business jobs. KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. Money360 surpasses $1B in loan originations and closings. SoftBank is biggest startup story in 2018. Today’s main analysis: Rate hikes pause in 2019. LendingTree Debt Report November 2019. Today’s thought-provoking articles: LendingTree Debt Report November 2019. October was biggest […]

Consumer Spending

News Comments

United States

United Kingdom

International

Southeast Asia

Other

News Summary

United States

SoFi Cutting Jobs in Their Mortgage Business (Lend Academy), Rated: AAA

Late Friday Bloomberg reported that SoFi was cutting 7% of its staff, or around 100 jobs, in the company’s mortgage department. This is due to a change in strategy as to how they underwrite mortgage loans. Rather than underwrite loans themselves, as they have done since launching their mortgage business back in 2014, they will outsource the underwriting to a partner.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (AP News), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (“CLUB 2018-P3”). This is a $272.40 million consumer loan ABS transaction that is expected to close December 13, 2018.

The transaction has initial credit enhancement levels of 30.87%, 22.80% and 9.70% for the Class A, Class B, and Class C notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note classes, a cash reserve account and excess spread.

This transaction is LendingClub Corporation’s eighth rated sponsored securitization, fourth of 2018 and the fifth sponsored securitization consisting of prime unsecured consumer loans facilitated by LendingClub’s proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform, www.lendingclub.com.

Money360 Milestone: Surpasses $ 1 billion in Loans Originated & Closed (Crowdfund Insider), Rated: AAA

Real estate marketplace lender Money360 announced on Monday it has surpassed $1 billion in loans originated and closed since inception. The announcement comes just 11 months after the lending platform revealed it had hit $500 million.

Rate Hikes Pause in 2019; Performance of Credit Card Borrowers with Personal Loans (PeerIQ), Rated: AAA

US Q3 GDP showed 3.5% annualized growth, well above potential growth of 2%. Growth slowed from the blistering 4.2% pace in Q2 due to rising inventories and lower consumer spending:

Source: WSJ, PeerIQ
Source: VantageScore, PeerIQ

LendingTree Debt Report November 2018 (LendingTree), Rated: AAA

Nine months into 2018, Americans had a cumulative $3.93 trillion in non-mortgage debt. About a quarter of that debt is credit cards and other revolving debt, while the remainder is for car payments, student loans and other fixed-rate loans such as personal loans.

In just five years, Americans will have increased their debt by $1 trillion. Consumer debt eclipsed the $3 trillion mark in 2013. By comparison, the previous $1 trillion milestone — from $2 trillion to $3 trillion of consumer debt — took more than 10 years.

43.5% of Purchase Borrowers Received Mortgage Rates Under 5% Last Week (LendingTree), Rated: A

For the week ending Dec. 2, 2018, the share of borrowers with rates under 5% was the highest in two months, which may lend some support to a weakening housing market.

Source: LendingTree
Source: LendingTree

LendingTree’s State Migration Study Finds Americans Are Moving South (GuruFocus), Rated: A

LendingTree today released its State Migration Study on where Americans are interested in moving. The study looked at where people moving out of state are going and discovered that of the 12.1 percent of homebuyers across the country who change states, most plan to head south.

Florida is the No. 1 destination. Florida was the top new destination for 15 of the 50 states.

Texas residents love the Lone Star State. Texas had the highest percentage of residents looking to move within state lines — 93.4 percent of purchase mortgage requests from individuals in Texas were for properties in the same state.

Source: LendingTree

October was Biggest Month for Reg CF Since May 2016 (Crowdfund Insider), Rated: AAA

October was a big month for Reg CF campaigns, according to the StartEngine Index. In fact, October booked the most money raised using the crowdfunding exemption since the rule became actionable in May of 2016.

According to StartEngine, $10.9 million in funding was raised. Until October came along, this past July held the top spot at $10.7 million. The Index indicates that Reg CF has now raised $151.7 million since inception. The Food & Beverage industry remains the most popular sector to use Reg CF followed by Tech.

Source: Crowdfund Insider

Fintechs’ Take On Installment Payments Explodes Online (Forbes), Rated: AAA

Installment payments have been around for seemingly forever but a new crop of fintechs are offering it with a twist: the ability to pay off smaller purchases in installment payments that in many cases are interest-free.

And it appears to be resonating with scores of U.S. consumers judging from the brisk business installment payment services like QuadPay.com enjoyed during the kick off to holiday shopping season this past Thanksgiving weekend. David Sykes, chief operating officer at QuadPay.com said 35% of online Black Friday sales for one large merchant customer came via QuadPay. On average Sykes said its service accounts for around 20% of all the online transaction from its roughly 500 e-commerce partners.

QuadPay.com makes money via the merchant, getting a cut of the sales generated by its service. That enables it to offer interest-free loans to consumers wanting to purchase everything from Uggs to underwear. Sykes said the average value of the orders on the platform is $150. QuadPay takes 25% of that on day one and then spreads out the remaining payments every two weeks. Because the average installment payment is around $37 there isn’t too much risk of customers defaulting on the loan.  To prevent default it won’t let a customer use the service again if they were ever late with a payment. The executive noted QuadPay approves 92% of all applicants.

How the largest US financial institutions rank on offering the mobile banking features customers value most (Business Insider), Rated: A

In Business Insider Intelligence’s second annual Mobile Banking Competitive Edge study, 64% of mobile banking users said that they would research a bank’s mobile banking capabilities before opening an account with them. And 61% said that they would switch banks if their bank offered a poor mobile banking experience.

Source: Business Insider

Why Wealthfront is offering free financial planning (Financial Planning), Rated: A

Wealthfront is offering its planning services for free, effectively unbundling its software, and giving millions of Americans access to a financial roadmap.

The second largest independent robo is betting the firm can steer users into fee-based accounts after they interact with its software to come up with a financial plan. The freemium software uses the firm’s automated advice engine, Path, according to the firm.

Credit Karma’s Kenneth Lin on building a billion dollar brand (Tearsheet), Rated: A

Building a great service is hard but not impossible. But building a great service and making it available for free — that’s really hard.

Credit Karma seems to have figured out a way to do both. The company, with 85 million members in the U.S. and Canada, continues to roll out free, innovative financial products to its user base. It all began 11 years ago with a simple premise: to provide users with free access to their credit scores. From there, the company has rolled out a bunch of new products, including ID monitoring, tax preparation, a financial chatbot, auto finance, and unclaimed money.

Betterment launches tool to optimize cash savings (Tearsheet), Rated: A

Automated investment advisor, Betterment is rolling out “Two-Way Sweep”, a tool that can automatically “sweep” excess money from customers’ bank accounts into a Betterment account optimized to provide better returns for cash.

What’s behind this new product: Studies show that only one in three millennials is investing in the stock market. That means they’re holding a high percentage of cash. In fact, Betterment sees 30 percent of customers with cash balances of $20,000 on average. This excess in savings earns little to no interest. Betterment’s Two-Way Sweep is intended to take the hesitation out of deploying more money into investments by automating the process.

CommonBond Acquires NextGenVest to Help Reach Generation Z (Lend Academy), Rated: A

CommonBond, best known as a leading provider of online student loans, has made its second acquisition, NextGenVest, an artificial intelligence powered advice platform for Generation Z. NextGenVest helps high school and college students in New York, Chicago and Philadelphia with their college financial needs through a combination of human “money mentors” and AI-powered suggestions delivered entirely through text messages.

OppLoans Named a Best Workplace by Glassdoor for the Second Year in a Row (GlobeNewswire), Rated: A

Chicago-based fintech firm OppLoans has been honored with a Glassdoor Employees’ Choice Award, recognizing the best places to work in 2019. This marks the second year in a row that the personal lender has been named to this prestigious list in the Small & Medium Business category. The Employees’ Choice Awards program, now in its 11th year, is based solely on the input of employees, who elect to provide feedback on their jobs, work environments and companies on Glassdoor, one of the world’s largest job and recruiting sites.

Backstage Capital-Backed CapWay Moves to Atlanta As It Expands Its Digital Banking Offerings (Hypepotamus), Rated: A

According to 2017 statistics from the FDIC, 16 percent of households in Mississippi are unbanked, choosing instead to use “predatory services” like corner store check cashing in their neighborhoods.

Allen founded her first startup, an app development shop, while still in college. After moving to Silicon Valley, Allen realized it wasn’t just rural communities that were underserved by banks. Inner city areas across the country, most of which are home to majority Hispanic and African-American populations, are also affected. An FDIC survey found that more than 15 million adults in the U.S. go unbanked.

In 2016, Allen founded CapWay with co-founder and fellow Mississippian Timothy Lampkin. The mobile-first platform is aimed at younger generations (think older millennials and Gen Z) in those unbanked communities to help them break out of the predatory economy cycle.

Finicity Announces Partnership with Princeton Mortgage for Effortless Digital Mortgage Origination (Benzinga), Rated: B

Finicity, a provider of real-time financial data aggregation and insights, announced today it is working with mortgage banker Princeton Mortgage to automate borrower asset verification for lenders. The agreement will provide Princeton Mortgage loan officers and borrowers with a faster, simpler loan origination experience that reduces both paper chase and headache.

NBKC Bank fintech accelerator participant wins $ 1M (Biz Journals), Rated: B

Onward Financial Inc., a member of the first cohort in NBKC Bank’s Fountain City Fintech accelerator program, won a $1 million award from the Communities Thrive Challenge, which is put on by The Rockefeller Foundation and the Chan Zuckerberg Initiative.

United Kingdom

P2P Lender Zopa Granted a Banking License in the UK (LendIt Fintech), Rated: AAA

Back in 2005 Zopa quietly launched their P2P lending platform in the UK, the world’s first. It was the start of a lending revolution that has moved on to all corners of the globe. Today, a new chapter begins as the company announced that regulators have approved Zopa’s banking license. With that Zopa achieves another first: becoming the world’s first combined peer to peer lending platform and digital bank.

Zopa Says it Will Redefine Banking (Crowdfund Insider), Rated: AAA

Zopa explained that this is called the “mobilisation’ phase” as regulators put some restrictions in place. A full licence will be granted once it meets the conditions set by the regulators.

Zopa said it will begin its new service next year. The digital bank will include options such as a fixed term savings product protected by the Financial Services Compensation Scheme (FSCS), credit card and a money management app.

Pointing to a statement by the FCA that just “40% of UK adults have confidence in the financial services industry,” Zopa sees opportunity in becoming a digital bank unencumbered by green-screen legacy tech and unnecessary brick and mortar branches.

Zopa explained it would redefine banking with the following services:

  • Giving customers a fair deal as standard – with no catches like sign-up offers that aren’t available to existing customers or hidden fees and charges.
  • Making sure money management is simple and a real person is available to discuss
  • Going beyond ‘good enough’

Zopa: Bank launch won’t impact P2P rates (P2P Finance News), Rated: A

ZOPA has insisted its peer-to-peer lending rates will not be dictated by the savings products on offer when its bank launched.

It currently offers target returns of 4.5 per cent on its Zopa Core product and 5.2 per cent on Zopa Plus.

Thomas Cook to slip out of FTSE 250 index in quarterly review (The Guardian), Rated: A

Other companies expected to be promoted to the FTSE 250 are peer-to-peer lending platform Funding Circle, the retirement housebuilder McCarthy & Stone and the investment trusts Smithson and Woodford Patient Capital.

Funding the future of the UK PLC (Business Leader), Rated: A

Looking at 2017, we saw some encouraging trends and one of them is in terms of diversity and choice. We saw peer-to-peer lending grow at over 50%. It’s obviously coming from a smaller base as it’s a reasonably new form of lending, but 50% growth is a very strong outcome.

Tandem’s Journey Card strives to better users’ credit scores (Alt Fi), Rated: A

Tandem Bank has announced its Journey Card has assisted nearly three-quarters (72 per cent) of its users to first-time credit or is helping individuals with poor credit history get back on track.

Due to the higher risk users it targets, the credit card carries a reasonably expensive representative APR of 24.9 per cent.

Tandem says it hopes to help the 43 per cent of Journey Card holders who have poor credit history, some of whom have defaulted with other providers.

CrowdProperty Provides Performance Metrics Disclosing Lending Returns Using Brismo Methodolgy (Crowfund Insider), Rated: A

Peer to peer property lender CrowdProperty is now disclosing their performance metrics using Brismo’s (formerly known as AltFi) standardized reporting methodology. CrowdPropert states that it is the first property development platform to incorporate the Brismo process which is described as an independent standard.

UK housebuilders back new online property listing start-up (Financial Times), Rated: A

Some of the UK’s largest housebuilders are backing a new property portal that will launch next year in the latest attempt to challenge the two dominant market leaders, Rightmove and Zoopla.

Barratt Developments, Bovis, Persimmon and Redrow have signed up to list their homes with the start-up Rummage4Property, as have Countrywide and about 30 other estate agency groups.

ARBUTHNOT BACKS MBI TEAM WITH £2 MILLION FACILITY (Arbuthnot Latham), Rated: A

Arbuthnot Commercial Asset Based Lending (ABL) has supported a highly experienced Management Buy In (MBI) team, led by Paul Hampton, with a £2m invoice discounting facility to support Premier House Investment’s acquisition of Ralph Coleman International Ltd (RCI) and provide ongoing working capital, paving the way for the company’s exciting expansion plans.

KAMBO expands its reach with two native apps (Life Pulse Health), Rated: A

KAMBO is expanding beyond desktops to become accessible on our most coveted devices, our smartphones. With the introduction of two native apps, KAMBO’s lending platform will become one of the most flexible and diverse of its kind.

The KAMBO app is now available on iOS and Android, making it the first crypto-lending platform to have an app in the App store.

LendInvest Joins Ingard’s Buy to Let Panel (Crowdfund Insider), Rated: B

Ingard, a compliance network, brokerage, and lending packager specialist, announced on Tuesday online lending platform LendInvest has joined its buy to let panel. According to Ingard, members may now access the lender’s buy to let range direct by registering through LendInvest’s online portal

China

Ping An GammaLab Wins Global AI Machine Reading Comprehension Competition (Markets Insider), Rated: AAA

Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group”) is pleased to announce that OneConnect, a subsidiary of the Group, ranked first in one of the world’s most authoritative machine-reading comprehension challenges — the Stanford Question Answering Dataset 2.0 (SQuAD). GammaLab Institute of Artificial Intelligence (GammaLab), owned by OneConnect, scored 83.435, close to the human performance level of 86.831, way ahead of other companies in the challenge.

Another scenario is internet arbitration in universal financial inclusion. Small loan companies tend to turn to online arbitration, which is expensive and takes time to resolve, under the current peer-to-peer lending market. With the reading comprehension skill of GammaLab, the arbitrator will finish a case quicker, reducing the cost for arbitration.

International

International P2P Lending Volumes November 2018 (P2P Banking), Rated: AAA

Mintosleads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 473 million Euro.

I removed Unilend, as the platform has closed and the company has gone into receivership.

Source: P2P Banking

CORELOGIC LAUNCHES NEW AUTOMATED VALUATION SOLUTION TO HELP STREAMLINE MORTGAGE LOAN ORIGINATIONS (CoreLogic), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, announced today the introduction of its Total Home Value for Originations AVM solution.

The new Total Home Value for Originations solution is specifically calibrated and packaged to improve efficiencies when performing property valuations during the purchase and refinance loan underwriting process.

Becoming a Digital Leader: 5 Customized Fintech Strategies That Work (Cutomer Think), Rated: A

According to EY study, fintech startups have raised $41.7 billion in the first half of 2018 across the globe. So, what fintech strategies need to be implemented to transform the consumer experience on the market?

  • Consumers first
  • Rebuilding trust
  • Lack of credibility
  • Partnership instead of competition
  • Improving the quality of lives

Nasdaq buys Canadian alternative data provider Quandl (Finextra), Rated: B

Nasdaq has acquired Quandl, a Toronto-based provider of alternative and core financial data. Terms of the deal were not disclosed.

Australia

Crypto Lending Services Coming to Australian Markets (NewsBTC), Rated: AAA

Helio Lending is the first independent crypto lending company to launch on Australian shores according to reports.

The company claims to be in the position to offer 50% more spending power to clients than they would have by holding on to their crypto assets.

Lakeba Invests in Lodex to Become Latest Capital Equity Partner (CryptoTechNews), Rated: A

Lodex, Australia’s first auction-style loans and deposits marketplace leader, today announced it has secured capital investment from Lakeba Group, an established Australian technology innovator.

India

India catches up with China, records 2nd highest fintech adoption rate: Here’s all you need to know (Financial Express), Rated: AAA

India is finally catching up with its neighbour and biggest competitor China. The country now has the second highest fintech adoption rate of 52%, only behind China’s 69%, which also throws a huge opportunity for India to not only make best out of financial services sector but also to disrupt it.

Southeast Asia

How Japan’s SoftBank and Its $ 100 Billion Vision Fund Became the Biggest Startup Story of 2018 (Inc.), Rated: AAA

UberWeWorkSaudi Arabia. The biggest startup stories in 2018 shared one long and influential thread: Japanese conglomerate SoftBank, its $100 billion tech investment fund, and founder Masayoshi Son.

The Vision Fund is backed by several prominent investors, including Apple and the government of Abu Dhabi, but its largest financial partner is Saudi Arabia’s sovereign wealth fund. The country’s government, under crown prince and de facto ruler Mohammed bin Salman, contributed 45 percent of the $100 billion, and in October announced plans to put another $45 billion into a second Vision Fund.

P2P lending can plug Southeast Asia’s US$ 175B business finance gap (Yahoo! News), Rated: AAA

Peer-to-peer (P2P) lending has emerged as a popular alternative financing option for small and medium enterprises (SMEs) in Southeast Asia. In 2016, P2P lending generated US$115.01 million, which accounted for more than half of total market share of Southeast Asia’s alternative financing market. In an evolving financing landscape, P2P lending complements the services banks provide and support the region in realising its growth and development potential. The very fact that investment in the region’s startups tripled from US$2.52 billion in 2016 to US$7.86 billion in 2017 is a testament of the vast potential in Southeast Asia’s FinTech startups.

Businesses, largely SMEs, benefited from such platforms too. According to a Deloitte report, SMEs contribute to 40% of Southeast Asia’s gross domestic product (GDP) and hiring 70% of the region’s workforce. Despite the importance of SMEs regionally, support is generally lacking, especially in terms of financing. This is due to strict banking regulations imposed after the 2008 global financial crisis, which have made banks and most financial institutions increasingly risk-averse. This is evidenced by McKinsey Global Institute’s report stating that 39 million Southeast Asian SMEs (or 51%) lack access to credit.

Malaysia may issue more equity crowdfunding, P2P lending licences in 2019 (Asia Asset Management), Rated: AAA

Malaysia’s securities regulator may license more operators of equity crowdfunding (ECF) and peer-to-peer (P2P) lending platforms next year, after current operators raised more than 200 million ringgit (US$48.25 million) for small firms since the industry was legislated in 2015, according to its chairman.

Singapore’s Milieu Insight raises US$ 730K to enhance market research platforms (e27), Rated: A

Singapore- and Thailand-based marketing software startup Milieu Insight has announced that it has raised S$1 million (US$730,000) from a group of private investors including former Rippledot Capital Director, Ravi Ravulaparthi.

Korean Fintech Startup HonestFund Attracts $ 12 Million Series B Investment (PR Newswire), Rated: A

HonestFund (CEO: Sanghoon Seo) has announced that the company, one of the largest marketplace lending players in South Korea, has successfully raised $12 million Series B investment.

Investment was led by Korea’s leading VCs and investment companies, such as Dunamu & Partners, MurexPartners, KB Investment, TL Asset Management, Bass Investment and HB Investment. This brings HonestFund’s total investment to $21 million, making it one of the most valuable Fintech companies in South Korea.

Canada

How experimental tech drives TD Bank’s mobile app (American Banker), Rated: AAA

While many banks have sought to employ experimental technologies when dealing with customers, including predictive virtual assistants, geolocation and advanced data analytics, few have brought all those pieces together to the degree used by TD Bank.

The bank has used such technologies live in production and won significant customer adoption, with its mobile app becoming No. 1 in the finance category in Canada for both iOS and Android. Mobile customers use the app 17 times a month on average, a figure that is growing.

OnDeck to merge Canadian operations with Evolocity Financial Group (Seeking Alpha), Rated: A

OnDeck (NYSE:ONDK) will combine its Canadian lending operations with Evolocity Financial Group, a private, Montreal-based online small business lender, to create OnDeck Canada.

Africa

Peer-to-Peer Lending as a Means of Propelling Startup Growth (Modern Ghana), Rated: AAA

Capital is the livewire of any business, especially for startups and established small businesses. Hence, they are always seeking for some additional funding that is too small for an angel investor to get a return for their effort. Banks also think it’s not worth their time. That’s where peer-to-peer (P2P) lending is working to fill that lending gap. This model may be a solution for many small businesses that are struggling with just tapping smaller funding amounts.

Authors:

George Popescu
Allen Taylor

Thursday October 25 2018, Daily News Digest

The Most Free and Clear Cities

News Comments Today’s main news: Funding Circle cuts price range for IPO. Nelnet withdraws industrial loan charter (ILC) application. China Rapid Finance names former Hewlett Packard exec as Co-CEO. Faircent drops prime lending rates. Today’s main analysis: The most free and clear cities in America. Today’s thought-provoking articles: Fincera grows as China’s P2P lending industry falters. BNP Paribas discusses […]

The Most Free and Clear Cities

News Comments

United States

United Kingdom

China/Hong Kong

International

India

Other

News Summary

United States

Nelnet withdraws application for industrial loan charter (American Banker) Rated: AAA

Nelnet, a student loan servicing company, has withdrawn its application to become a Utah-chartered industrial bank.

The Lincoln, Neb., company had filed an application with the Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions in late June to form Nelnet Bank. Nelnet was pursuing an industrial loan charter.

The withdrawal is a “temporary step back” in what Nelnet knew could be a long process, Tim Tewes, the company’s president, said in a press release.

LendingTree Reveals the Most Free & Clear Cities in America (Lending Tree) Rated: AAA

Many U.S. property owners dream of the day they shed the mortgage, owning their homes outright. Reaching this milestone means not only skipping the monthly payment but achieving what is perhaps a lifelong goal of asset accumulation. LendingTree ranks U.S. cities by the proportion of such homeowners who are free and clear.

Source: LendingTree

The Federal Reserve’s measure of how much wealth households have in real estate equity has climbed from a $6-trillion level nine years ago to about $15 trillion in 2018.

Source: LendingTree

CreditShop Announces the Successful Conversion of More Than 500,000 Mastercard Credit Card Accounts (PR Newswire) Rated: A

CreditShop LLC today announced the successful conversion of more than half a million Mastercard credit card accounts and $1.4 billion in receivables. The portfolio, which was acquired in March 2017, was converted to the new Mercury Mastercard® which launched in May.  The Mercury Mastercard is marketed by CreditShop, and issued by First Bank & Trust of Brookings, South Dakota.

CreditShop believes that there are few reasonably priced credit cards available to credit-challenged consumers. There are about 75 million Americans in the “middle market” with FICO scores ranging between 575 and 675, and many are charged high fees by sub-prime credit card issuers.  The Mercury Mastercard is designed to give hard-working, middle market consumers access to a better credit card, at a reasonable price, so they can manage their financial lives better.

Covr Financial Technologies raises $ 10MM Series A from leading technology venture firms (PR Newswire) Rated: A

Covr Financial Technologies, a digital, multi-carrier life insurance platform for financial institutions, today announced it has raised $10 million in Series A funding. In addition to Covr’s existing individual and family investors that made additional investments during this funding round, Covr’s current venture partners all participated including Nyca Partners, Commerce Ventures, Countour Venture Partners and Connectivity Capital Partners and were joined by new investor Allianz Life Ventures. This most recent round brings Covr’s total fundraising to more than $20MM.

Fintech Leader OppLoans Appoints Stacee Hasenbalg to Chief Compliance Officer Role (PR Newswire) Rated: B

OppLoans has announced the appointment of Stacee Hasenbalg to the role of Chief Compliance Officer. Ms. Hasenbalg has held positions in banking and financial services for more than 20 years, including the role of Associate General Counsel, US Regulatory Liaison at Bank of Montreal, and Chief Compliance Officer at Avant. At OppLoans, Hasenbalg will join the executive team leading the company’s compliance and risk oversight function to ensure maximal transparency and efficiency as the firm delivers financing to underbanked consumers.

United Kingdom

Funding Circle cuts price range for London IPO (Financial Times) Rated: AAA

Funding Circle, the peer-to-peer lending platform, has cut the maximum valuation it is seeking in its upcoming stock market flotation, which is viewed as a test for UK investors’ appetite to back alternative lending vehicles.

The loss making company — which connects small businesses seeking credit with private and institutional investors willing to lend to riskier borrowers for potentially higher returns — originally set a price range of 420p to 530p per share for its IPO. This would have valued it at up to £1.8bn.

Funding Circle, which is the first peer-to-peer lender to go public in the UK, has now narrowed that price range from 440p to 460p, giving a maximum valuation of £1.5bn.

Lending to manufacturers grew over the last year (Business Insider) Rated: A

Lending to manufacturers grew by 7.4 per cent over the last 12 months, in contrast to a wider 2.1 per cent contraction overall in UK business borrowing, according to banking trade body UK Finance.

The figures released today also show that UK business deposits for non-financial companies grew by 1.5 per cent in the last 12 months.

PLATFORM RAISES £4.5M TO END ‘PAYDAY POVERTY’ CYCLE (Business Cloud) Rated: A

FinTech start-up Wagestream has raised £4.5m in funding from a group of the world’s leading technology and social impact investors.

The fledgling company’s ‘Get-Paid-As-You-Go’ service allows workers to access their monthly wages in real-time.

Backers include QED Investors, Village Global (a global VC backed by leading entrepreneurs, including Bill Gates and Jeff Bezos), as well as the London Mayor’s Co-Investment Fund and the Fair by Design fund, whose social impact charities include Big Society Capital, Nominet Trust and the Joseph Rowntree Foundation.

Frank Field asks City watchdog to protect Wonga borrowers from ‘disaster zone’ (AOL) Rated: A

MP Frank Field has written to the City watchdog to seek assurances that borrowers from collapsed payday loan company Wonga will be protected from “a financial disaster zone”.

Following a meeting with Wonga’s administrators Grant Thornton, the independent politician has written a letter to Financial Conduct Authority (FCA) chief executive Andrew Bailey asking what steps the regulator will take to protect customers from loan sharks.

Mr Field wrote that it was still possible “people of good will” could buy the company’s £400 million worth of outstanding loans and “treat borrowers without exploitation”.

Tandem Bank adds auto-savings rules (Fintech Futures) Rated: B

Tandem Bank is launching the possibility of setting auto-savings rules, designed to help customers automate regular payments to the savings pot.

When a rule is triggered, money will be automatically moved from their current account into their Tandem account. This money will then start to earn interest.

China

As China’s P2P Industry Stumbles, One Company Is Soaring (The Diplomat) Rated: AAA

China’s peer-to-peer (P2P) lending industry is going through a challenging time, as regulators ensure that companies follow a list of over 100 new rules. The rules have been put into place to eliminate the fraudulent or poor business practices that have plagued the industry since its inception in 2006. Many of these firms have struggled to reduce customer credit risk, lacking sufficient financial and technological expertise. But some companies have continued to perform well despite the chaos, and one of these is Fincera, which lends to businesses.

Fincera Inc. is one of the first companies in China to make loans to trucking businesses online. The company operates a P2P lending platform called “Qingyidai” that continues to thrive despite the turbulence in China’s P2P lending sector. As hundreds of P2P lending firms are shut down and/or bailed out due to China’s current regulatory and economic environment, the few that persist stand out. For Qingyidai, the secret to survival is in its risk control methods, which combine technology with traditional risk control methods.

China Rapid Finance Limited (XRF) Names Former Hewlett Packard Executive as Co-CEO (Street Insider) Rated: AAA

China Rapid Finance Limited (“XRF” or the “Company”) (NYSE: XRF), a leading consumer finance marketplace and technology platform in China, today announced the expansion of its leadership team with the appointment of Russell Krauss, a former Hewlett-Packard executive, as Co-Chief Executive Officer and Vice Chairman. The appointment is intended to help accelerate its strategic corporate transformation as it launches new initiatives and business lines.

Crypto.com Announces Advisory Board (PR Newswire) Rated: B

Huey Lin (Operations)

Huey Lin is COO of Affirm which offers services that empower consumers to advance their financial well-being. Affirm was founded by Max Levchin and is one of Silicon Valley’s fastest growing fintech startups, having raised over US$500m. As COO, Huey is responsible for all aspects of operations, and scaling the company. Prior to Affirm, Huey spent nearly 12 years at PayPal in several key roles, including director of international risk policy & strategy and senior director of Asia-Pacific operations. She played an instrumental role in helping PayPal expand in Europe, meet critical global compliance requirements and was one of the first product managers.

European Union

Aren’t we at the ‘peak of the cycle’? BNP Paribas responds (Altfi News) Rated: AAA

In an exclusive interview with AltFi, Stéphane Blanchoz said the firm plans to originate €1 billion a year in SME loans in Europe, with at least €400m in the UK. Blanchoz is heading up the operation as head of SME alternative financing.

BNP is working with a number of origination partners, including CODE Investing and Caple, but also plans to originate loans itself.

The operation will focus on ‘medium enterprises’, with loans ranging from £500k to £5m. According to a presentation delivered at its offices last week, the asset manager sees this as an underserved segment of the market, populated by around 34,000 companies. Companies within this segment are turning over between £1m and £50m a year.

Ronald Kleverlaan, Director European Centre for Alternative Finance, Shares Insight Into European Fintech Marketplace (Crowdfund Insider) Rated: A

Ronald Kleverlaan: The alternative finance market in Europe is currently preparing for the next growth phase with EU wide regulations, launch of new initiatives backed by large institutional funders and public support for cross-border investments.

Previously alternative finance was used in startups or specific higher risk industries and in several countries 10-20% of that market is already funded through alternative finance providers.

One of the main drawbacks is the maximum of €1 million to be raised by companies through a platform. In most member states this maximum has already been raised to €5 million or €8 million making it applicable also for larger scale-ups and growing companies to raise funding though these platforms.

The Finnish Financial Supervisory Authority approved Fellow Finance Plc’s prospectus (Globe Newswire) Rated: A

The Finnish Financial Supervisory Authority has today, on 26 September 2018, approved Fellow Finance Plc’s (“Fellow Finance” or the “Company”) Finnish language Prospectus (“Prospectus”) regarding the Company’s planned listing on the First North Finland marketplace of Nasdaq Helsinki Ltd and the initial public offering related thereto (the “IPO”).

The Prospectus will be available in electronic form on or about 26 September 2018, on Fellow Finance’s website at www.fellowfinance.com/company/ipo, at the website of Evli Bank Plc at www.evli.com/fellowfinance and at the website of Nordnet Bank AB Finnish Branch at www.nordnet.fi/fellowfinance. The printed versions of the Prospectus will be available on or about 27 September at the registered office of the Company at Ratakatu 1 b A 10, FI-00120 Helsinki, at Evli Bank Plc’s office located at Aleksanterinkatu 19 A, 4th floor, FI-00100 Helsinki and at the Nasdaq Helsinki Ltd (Fabianinkatu 14, 00100 Helsinki).

MYBESTBRANDS Launches Universal Checkout in Collaboration With Payment Provider Klarna (PR Newswire) Rated: B

Klarna, one of Europe’s leading payment providers, and MYBESTBRANDS, Germany’s largest online shopping mall for premium and luxury fashion, have joined forces to launch the Universal Checkout (UCO), the first cooperation of its kind in Germany. Innovative bot technology developed by MYBESTBRANDS combined with the Klarna Checkout will create a superior shopping experience for customers, driving increased order values, conversion and ultimately building loyalty for MYBESTBRANDS’ merchants.

Customers will now be able to add items from different merchants to a single cart on MYBESTBRANDS and then pay with a click via Klarna.

International

Striking the Delicate Balance Between Customer Experience and Fraud Prevention (TransUnion), Rated: AAA

Striking the delicate balance between customer experience and fraud prevention is not an easy feat. This was a common theme among newly released Forrester Consulting global studies exploring fraud in the financial services, insurance and single and multi-family rental industries.

Increases in fraud are corroborated by the research conducted by Forrester.

  • Nearly all financial services firms (94%) in the study recognized that they have experienced some sort of fraud, whether it’s identity theft/new account fraud, synthetic identity fraud, or account takeover fraud in the past two years.
  • Almost two-thirds of insurance companies (62%) have seen an increase in soft fraud and 57% have seen an increase in identity fraud in the past year.
  • Virtually all property management companies (97%) have experienced fraud in the properties they manage in the past two years.
Source: TransUnion

The studies come at a time when TransUnion’s own proprietary fraud data found that outstanding balances of suspected synthetic fraud for auto loans, bankcards, retail cards and personal loans have now surpassed $1 billion as of Q2 2018. Insurers and large and small property managers also face new fraud schemes as the prevalence of online applications continues to rise.

Source: TransUnion

See the full study on fraud here.

Speakers tell ABS pros not to sweat the credit cycle (GlobalCapital) Rated: A

Panelists speaking on state of the consumer ABS market on day two of ABS East told a packed audience that while the credit cycle is definitely in its late stages, material distress in consumer credit was unlikely to be seen for some time.

The comments reflect a broader sentiment that has been expressed at the conference, that the bull market is showing no signs of slowing down and is throwing the likelihood of a recession of any size into question (see related article).

This Exchange Protects User Funds by Keeping 98% in Cold Storage (News BTC) Rated: A

A new European exchange wants to protect their customer funds from governments and hackers by regulatory compliance and a special focus on security.

Blockchain.io is a newly announced exchange that intends on enforcing strict rules to comply with both international and local laws, even for future regulations. The company wants to stay regulatory-compliant, audit their records and only approve carefully selected coins in order to make sure that they stay on the right side of the law.

For instance, a variety of simple and complex order types will be featured. Moreover, there are plans to integrate a peer-to-peer (p2p) lending system to let user borrow from a fund managed and maintained by Blockchain.io. The interest rates of such transactions will be based on supply and demand.

Australia

Real Estate Startup Konkrete Gets Backing From Signum Capital (ThirtyK) Rated: AAA

Blockchain startup Konkrete announced it is receiving financial backing from Signum Capital, an investor in blockchain technologies.

Konkrete, which provides a platform for tokenizing real estate assets, is in the midst of raising $3 million. The Melbourne, Australia-based company has $2 million in precommitments with Signum as the lead investor, according to Australia’s Financial Review.

The announcement comes amid a flurry of blockchain-related real estate projects worldwide.

India

Faircent.com drops prime lending rates by 200Bps to 9.99% p.a. for unsecured loans (Economic Times) Rated: AAA

Leading NBFC-P2P Faircent.com on Wednesday announced a reduction in the interest rate on unsecured loans to 9.99% per annum for prime borrowers listed on its platform. According to a statement, the move is a first for India’s lending market, with such an interest rate being the lowest for unsecured loan offered by any private/PSU bank or alternative lending platform in the country, so far.

Faircent says this is the direct result of RBI regulating the peer-to-peer lending sector in India and recognizing it as an NBFC-P2P, thereby unlocking the alternative credit supply into the economy.

SC verdict on Aadhaar Act may make operations expensive for fintech players (Your Story) Rated: A

The Supreme Court of India on Wednesday, while upholding the constitutional validity of Aadhaar, struck down Section 57 of the Aadhaar Act, which allowed the sharing of citizen data with private entities.

Bhavin Patel, co-founder and CEO of P2P lending platform LenDenClub, says,

“The authenticity of data through Aadhaar is really high considering physical documents (like PAN card) can be copied. The costs of verification for delivering ultra-small ticket size loans (of say Rs 5,000) will definitely be a concern. We estimate that there will be a 30-percent increase in costs on physical verification, which will add up to another Rs 100 or Rs 150.  Also, deployment may take a day or more now (in an ideal scenario) since physical verification takes 24 hours at least.”

COAI to examine implications of Supreme Court verdict on Aadhaar linkage with mobile connections (Economic Times) Rated: A

Cellular Operators’ Association of India (COAI) Wednesday said it will examine and assess implications of the Supreme Court judgement, which states that it will not be mandatory for customers to link Aadhaar for mobile connections and bank accounts.

The apex court Wednesday struck down the Section 57 of the Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016 that permitted private entities like telecom companies or other corporates to avail of the biometric Aadhaar data.

Loan Rate DOWN: While HDFC, SBI, ICICI, Indusland Bank hike lending rates, this lender bucks the trend (Zee Business) Rated: A

Loan takers are having to pay interest through their noses and there has been no relief in sight for a long time. However, bucking the trend is this new-age online lender. Faircent.com has actually reduced interest rates on unsecured loans by a whopping 200 bps to 9.99% per annum for prime borrowers listed on its platform. This is lowest “lowest” interest rate for unsecured loans offered by any private/PSU bank or alternative lending platform in the country, Faircent claimed in a statement. It further said the reduction in lending rate is the “direct result of RBI regulating the peer-to-peer lending sector in India and recognizing it as an NBFC-P2P, thereby unlocking the alternative credit supply into the economy.”

Significantly, unsecured loans are issued without any collateral and are supported only by the borrower’s creditworthiness.

The Reserve Bank of India (RBI) had hiked repo rate in August 2018 from 6.25% to 6.50% to curb inflation. This affected both the existing as well as future borrowers taking loans from banks. Following RBI decision, several public sector and private banks have increased their Marginal Cost-based Lending Rates (MCLR), making the with borrowers pay higher interest rates and EMIs on their loans. Faircent.com has done the opposite.

Asia

BoT readies peer-to-peer lending service (Bankok Times) Rated: AAA

The Bank of Thailand plans to set regulations for peer-to-peer (P2P) lending service by the year-end, widening opportunities for small-business operators to access financial sources.

The central bank expects to set out regulations to cover all related parties, including P2P lending platforms, borrowers and lenders, said assistant governor Ruechukorn Siriyothin.

Authors:

George Popescu
Allen Taylor