Friday November 29 2019, Weekly News Digest

Beehive SME Infographic

News Comments Today’s main news: Funding Circle US launches Small Business Choice. LendingPoint closes $175.6M direct-to-consumer securitization. Chinese P2P lenders have 2 years to change business model. Klarna starts new merchant partnership every 8 minutes. Today’s main analysis: Cities where millennials have the highest credit card balances. Today’s thought-provoking articles: Schwab to acquire TD Ameritrade, […]

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Beehive SME Infographic

News Comments

United States

United Kingdom

European Union

China

Other

News Summary

United States

Funding Circle US Launches Small Business Choice, Providing Interest Rate and Loan Term Options to Small Business Owners (BusinessWire), Rated: AAA

Funding Circle US today announced Small Business Choice. The newest feature of the Funding Circle US loan platform provides borrowers with three fully approved loan options with different terms and rates to give small business owners the flexibility to find the loan that best fits their needs.

Under Small Business Choice:

  • Loan options are suggested after being completely underwritten by Funding Circle. Borrowers are fully approved for all three options.
  • In line with Funding Circle’s global commitment to transparency, offers are presented in a straightforward way over the phone and in emails that directly outline the total loan amount, term, rate and monthly payment.
  • The feature applies to all small business owner applicants, including existing borrowers, at Funding Circle US.

LendingPoint Closes $ 175.6 Million Direct-to-Consumer Loan Securitization and Inaugural, $ 61.7 Million Point-of-Sale Loan Securitization (BusinessWire), Rated: AAA

Data and technology platform LendingPoint today announced that it has closed two additional securitizations of loans originated on the LendingPoint platform: LendingPoint Receivables Trust 2019-2 (“LDPT 2019-2”) issued $175.65 million of KBRA-rated notes backed by a pool of direct-to-consumer loans and LP LMS 2019-1 Asset Securitization Trust (“LPMS 2019-1”) issued $61.7 million of unrated notes backed by a pool of point-of-sale loans. Guggenheim Securities was sole structuring advisor and sole manager of both transactions.

Cities Where Millennials Carry the Highest Credit Card Balances (Experian), Rated: AAA

Millennials accounted for about 20% of all credit card debt in Q2 2019, an increase of 2 percentage points year over year. Their generation was the only one to see a marked increase in overall credit card balances in Q2 2019. Since 2015, millennials have seen their average FICO Scores*  increase 17 points and their average credit card balance increase by $1,390.

Cities With Highest Millennial Credit Card Balances in Each State

Schwab is the 800 lb Gorilla Now; Future of FinTech; Madden Fix (PeerIQ), Rated: AAA

Charles Schwab Corp. is in negotiation to acquire TD Ameritrade. The deal would combine two of the largest online brokerages with strong banking capabilities. Shares of both companies were up significantly in the news.

Source: PeerIQ, Bain Capital Ventures LP

Full interview with Max Levchin, co-founder of Paypal (CNBC), Rated: A

PeerStreet Continues Rapid Growth With New Milestone: $ 3 Billion in Loan Transactions (BusinessWire), Rated: A

PeerStreet, a platform for investing in real estate backed loans, today announced that as of last month, more than $3 billion in loans have been transacted through the PeerStreet marketplace. This milestone comes on the heels of the company announcing the close of its $60 million Series C funding round coupled with $4.25 billion in new capital commitments.

Entera Raises $ 7.5M in Funding (FinSMEs), Rated: A

Entera, a San Francisco, New York and Houston-based real estate technology platform that enables investors to access, make data driven decisions and purchase residential real estate, raised $7.5m in funding.

An internet banking pioneer’s view from the catbird seat (American Banker), Rated: A

If David Becker’s career were put to country song, the title might be “I was internet banking when internet banking wasn’t cool.”

Becker founded the online-only First Internet Bank in 1998, well before the term digital platform was thrown around. Online banking long had promise, but to hear Becker tell it, it’s really coming into its own — and he has a front-row seat to change.

Wolters Kluwer Launches Consumer Lending Online Applications Offering for Community Banks, Credit Unions (BusinessWire), Rated: A

Wolters Kluwer’s Compliance Solutions business has launched Online Applications for Consumer Lending (CLA), a digital offering that enhances the online loan origination capabilities of U.S. community banks and credit unions. CLA allows consumers to begin a loan application from any digital device, at any time. It integrates seamlessly with Wolters Kluwer’s ComplianceOne solution, an industry-leading loan documentation and processing system that helps lenders optimize their lending and document preparation processes in a secure, fast and cost-effective manner.

Why small businesses need regulators’ proposed ‘Madden’ fix (American Banker), Rated: A

Just recently, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. proposed an important clarification to the “valid when made” doctrine, which provides that if a loan’s interest rate is valid in the state of origination, that loan continues to be valid when transferred to a party in another state. That long-standing doctrine was overturned by the so-called Madden case in 2015.

MoneyLion : Names Samantha Roady Chief Operating Officer (MarketScreener), Rated: B

MoneyLion, the digital bank and financial membership platform, today announced the appointment of fintech and global finance industry veteran Samantha Roady as Chief Operating Officer, a new position within the company. She has served as a MoneyLion board member since September 2016.

Supreme Court to hear CFPB constitutionality case in March (American Banker), Rated: B

The Supreme Court on Tuesday said it will hear arguments March 3 in a case challenging the constitutionality of the Consumer Financial Protection Bureau’s leadership structure.

United Kingdom

Zopa is running out of time in bid to become bank (Evening Standard), Rated: AAA

PEER-to-peer lending giant Zopa faces a race against time to raise up to £150 million and satisfy regulators it is financially strong enough to become a bank.

Zopa rival Funding Circle has seen its shares crash from 400p a year ago to 99p today.

Zopa nears crunch time as investor woes worsen (Financial News), Rated: A

One of the UK’s best-known and oldest fintech companies is running up against a tight deadline to secure funding needed to maintain its banking licence, as a major investor is sidetracked by a funding crunch of its own.

Marketplace lending expected to top £6bn this year, says report (AltFi), Rated: A

Marketplace lending is expected to top £6bn this year but lenders will face a significant test of their risk management procedures, loan servicing and recovery practices should the economy worsen, a new report warns.

The report says that gross marketplace lending is likely to grow 16 percent from £5.3bn to £6.2bn from 2018 to 2019.

Wonga‘s legacy of nearly 400,000 mis-sold loans (Wellston Journal), Rated: A

Administrators for the lender, which collapsed in August 2018, have revealed that 389,621 eligible claims have been made since Wonga‘s demise.

So far, the compensation bill is £460m, with the average claim £1,181.

The administrators said they had received 560,982 claims by the end of August.

Britain’s RBS launches digital bank Bó to take on start-ups (Reuters), Rated: A

Royal Bank of Scotland has launched its standalone digital bank Bó in a plan to fend off competition from fast-growing online start-ups including Monzo and Starling.

Funding and technology: the foundations of building a great product  (Mortgage Introducer), Rated: A

Disrupting the traditional mortgage process has always been our goal at LendInvest.

From the way you apply for a loan, to case management to how that loan is funded, we believe the experience can be better at every stage of that journey.

LendInvest Promotes Andy Virgo to Key Role (Crowdfund Insider), Rated: B

LendInvest, the Fintech marketplace for property finance, has promoted Andy Virgo from Business Development Manager to Head of Key Accounts for LendInvest.

Lisa Fiondella Joins Finastra as Chief Data Officer (Markets Insider), Rated: B

Finastra has hired Lisa Fiondella as Chief Data Officer to lead its comprehensive data strategy, including how data collected through the FusionFabric.cloud platform and various cloud-based solutions, can be best utilized. She will be responsible for developing a data product roadmap and manage the process of bringing new data products to market.

China

P2P: China’s once-booming lending industry must close within two years, government notice says (SCMP), Rated: AAA

All existing peer-to-peer lending platforms in China must become small loan providers within two years, a notice seen by Reuters on Wednesday showed, the latest official edict aimed at curbing the once-booming industry.

All Chinese peer-to-peer (P2P) lending firms need to clear outstanding loans in less than one year before switching to small loans, according to a notice issued by China’s Internet Financial Risk Special Rectification Work Leadership Team Office, which was launched by Beijing to mitigate risks in the online lending sector.
  • Only 427 existing peer-to-peer (P2P) firms were still operating by the end of October, down from 6,000 at their 2015 peak

China Bids Farewell to P2P Lending (Finews.Asia), Rated: A

In order to transition, firms must meet a minimum capital requirement of 50 million yuan ($7.1 million) to become a small regional lender and 1 billion yuan ($142 million) to become a small national lender.

Ping An to fold P2P lender Lufax into new consumer finance arm (Technode), Rated: AAA

Ping An Insurance has received approval from regulators to set up a consumer finance arm, a representative from its peer-to-peer (P2P) loan affiliate Lufax confirmed on Friday, in a move that is reportedly the beginning of its transition away from P2P lending amid increasingly stringent regulations.

Lufax Prepares for Life After P2P Lending (Caixin), Rated: A

European Union

Flender Makes BIG Mark in Ireland’s SME Lending Market (deBanked), Rated: AAA

The following month Flender would reveal remarkable news, a new €75 million funding line, bringing their total to €109 million raised since the company’s founding in 2015. The company is backed by Eiffel Investment Group, Enterprise Ireland, entrepreneur Mark Roden and former Ireland rugby player Jamie Heaslip.

Meawnwhile, CEO Kristjan Koik told the Irish Times that the top 3 banks in Ireland have 92 percent of the SME lending marketshare so there is still a ton of opportunity for non-banks like Flender to grab hold of.

Alternative Lending Marketplace October Reveals New $ 110 Million Commitment from European Investment Fund and Others to Finance European SMEs (Crowdfund Insider), Rated: A

A new €100 million (appr. $110 million) agreement was finalized by the EIF, CNP Assurances, Bpifrance, Zencap, and various other entities in order to fund European SMEs via marketplace lending platform October. These companies are part of the recent institutional fund launched last year.

Half of European P2P investors have more than 25pc of portfolio in P2P loans (P2P Finance News), Rated: A

MORE than half (52.3 per cent) of European peer-to-peer investors surveyed by Robo.cash have more than a quarter of their portfolio in P2P loans.

Irish Consumers Still Don’t Trust New Technology, Including Digital Challenger Banks (Crowdfund Insider), Rated: A

Three quarters, or 75%, of Ireland’s consumers, are only using a “high street” bank, which makes the country the most traditional in Europe.

Only around 10%, or one in ten, Irish consumers are banking only with a challenger bank. Around 11% of Millennials and 12% of Gen Z consumers in Ireland are using (only) challenger banks, the report revealed.

When looking five years ahead:

  • 17% of Ireland’s consumers are expected to bank solely with a challenger bank (up from around 14% in 2019).
  • 35% of Ireland’s citizens will be banking with some combination of challenger and traditional financial institutions (up from about 21% in 2019).
  • 48% will be banking solely with a legacy bank (down significantly from 68% in 2019).

This, according to Fujitsu’s latest “From Demanding to Discerning: Tech and the New Banking Customer” report.

Investor confidence in P2P lending is growing in Europe (Wealth Adviser), Rated: A

According to a new survey by Robo.cash, 64.9 per cent of the European P2P investors have full confidence in P2P lending. Remarkably, 52.3 per cent of respondents mentioned that P2P loans take a considerable share of their investment portfolio – over 25 per cent.

Citadele Bank to invest in consumer loans through Fellow Finance P2P platform (Finextra), Rated: B

Citadele Bank is launching a partnership with Europe’s most advanced lending platform, Fellow Finance, which brings together individuals, businesses and investors.

International

Klarna partners with a new merchant every 8 minutes in 2019 (PR Newswire), Rated: AAA

During 2019, Klarna has once again seen stellar growth with 60,000 new merchants globally including River Island, Boohoo, Made.com, Michael Kors, Expedia, H&M, Abercrombie & Fitch, Timberland, Marchesa, Agent Provocateur, Rue 21, TOMS, WayFair, Microsoft, and Shein. Now over 190,00 merchants partner with Klarna.

– Consumer growth and preference builds, adding 16 million new consumers globally.

OakNorth and N26 Have Received the Most Funding Out of All US and European Digital Banks (Crowdfund Insider), Rated: A

According to Crunchbase data, OakNorth ($1 billion) and N26 ($670 million) have received the most funding out of all other major US and European neobanks.

Regulators in Dubai and Luxembourg sign fintech pact (Finextra), Rated: B

The Dubai Financial Services Authority (DFSA) and the Commission de Surveillance du Secteur Financier (CSSF) Luxembourg, entered into an agreement to cooperate in the development of FinTech.

Australia

Almost 50% of Australians Have Not Heard of Neobanks or Digital-Only Banks (Crowdfund Insider), Rated: AAA

The number of users that may consider changing their primary banking institution during the coming six-month period is currently 12% or 2.5 million Australian residents, which is reportedly 9% greater than the previous year.

The Nielsen surveys revealed that around 50% of Australia’s consumers noted that they had not heard of a neobank. Only a third, or about 33%, of the nation’s consumers said they’d be willing to use a neobank as one of their financial services providers, even after the benefits of using digital-only banks were explained to them.

A quarter, or 25%, of consumers who became aware of neobanks stated they would most likely use them as one of their primary financial services providers.

Asia

Indonesian P2P lender Amartha bags series B money from Line, others (Tech in Asia), Rated: AAA

Indonesian peer-to-peer lending startup Amartha has raised an undisclosed amount of series B funding in a round led by Line Ventures, the venture capital arm of global messaging app Line.

MENA

Dubai-based Fintech, Beehive, Releases State of the SME Ecosystem Report (PR Newswire), Rated: AAA

Key findings from the report include:

  • Surveyed MENA SMEs have more women in senior positions than the global average.
  • 28% of respondents see innovation as a priority for growth, yet only 2% of business owners are currently trying to access finance to fund it.
  • SMEs offer young people a great opportunity for development. 48% of SMEs would hire someone under 25 with no experience.
Source: Beehive

See the full report here.

Authors:

George Popescu
Allen Taylor

The post Friday November 29 2019, Weekly News Digest appeared first on Lending Times.

DAS: Markets Conference

digital assets conference

Date: November 13, 2019 Location: Cipriani South Street, New York, New York Join the leading institutional conference focused on digital assets and crypto market infrastructure. BlockWorks Group Presents DAS: Markets Speakers include: Adam White, COO, Bakkt Catherine Coley, CEO of BAM Trading Services, Binance.US Michael Sonnenshein, managing director, Grayscale Investments Sunayna Tuteja, head of digital assets and […]

The post DAS: Markets Conference appeared first on Lending Times.

digital assets conference

Date: November 13, 2019
Location: Cipriani South Street, New York, New York

Join the leading institutional conference focused on digital assets and crypto market infrastructure.

BlockWorks Group Presents DAS: Markets

Speakers include:

  • Adam White, COO, Bakkt
  • Catherine Coley, CEO of BAM Trading Services, Binance.US
  • Michael Sonnenshein, managing director, Grayscale Investments
  • Sunayna Tuteja, head of digital assets and blockchain, TD Ameritrade
  • Dmitry Tokarev, CEO, Copper
  • Kyle Samani, co-founder and managing partner, Multicoin Capital
  • Pete Najarian, chief revenue officer, BitGo
  • David Pakman, partner, Venrock
  • Brooke Navarro, head of business development & capital markets, tZero
  • Ryan Selkis, founder & CEO, Messari
  • Frank Chaparro, director of news, The Block
  • Jemima Kelly, journalist, Financial Times
  • Michael Moro, CEO, Genesis Trading / Genesis Capital
  • Michael Del Castillos, staff writer, Forbes Media
  • Lucinda Shen, writer, Fortune
  • Steve Kokinos, CEO, Algorand
  • Michael Ippolito, co-founder, BlockWorks Group
  • And many more!

Learn more about the conference and register here.

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Tuesday October 9 2018, Daily News Digest

LendingClub

News Comments Today’s main news: China Rapid Finance issues regulatory report, board change. H&M invests in Klarna. Tencent drops $180M into Nubank. KKR, Tencent lead $175M investment into Voyager. Today’s main analysis: Gen Z is more optimistic than millennials about home ownership. Today’s thought-provoking articles: The cities in America with the biggest houses. Inside Ameritrade’s integration with WeChat. Unemployment rate […]

LendingClub

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Startup Credit Kit; 48-year Low Unemployment Rate (PeerIQ), Rated: AAA

The US economy added 134k jobs in September and the unemployment rate dropped to a low of 3.7%  – a level not seeing since the Beatles broke up in 1970. Wage growth came in strong at 2.8%, and raises the specter of inflation down the road.

Point-of-Sale lending continues to grow, with Square now providing instalment loans of up to $10,000 to shoppers who purchase big-ticket items from Square’s merchants. Borrowers can repay in fixed monthly payments over a period of 3, 6, and 12 months with interest rates ranging from0% to 24%. The move puts Square in direct competition with other POS lending services – Affirm, Klarna, Greensky and more.

In regulatory news, the FDIC has received 21 banking applications this year, over twice the number for last year. The FDIC however has approved only 4 of these applications to date.

PeerIQ’s Learning of the Week

This week we look at the performance of LendingClub’s 36-month loans. Over the life of the loans, borrowers with verified income have 140 bps higher losses. This is due to a “selection effect” – namely, LendingClub applies an extra layer of income verification high credit risk borrowers.

Source: PeerIQ

LendingTree Reveals the Cities with the Biggest Houses in America (LendingTree), Rated: AAA

LendingTree compared home sizes across the country, but first, let’s look at some national data. The Census Bureau reports that the median size of new homes completed in the second quarter was 2,412 square feet. Home sizes have leveled off the past few years from a peak of 2,488 square feet in the third quarter of 2015, though homes sizes are generally larger today than they were for previous generations.  Because only a small proportion of the housing stock is new each year, the median size of all homes is lower given a median house age of 37 years.

Key findings

  • Everything is bigger in Texas. Whoever coined this phrase must have been thinking about real estate. Houston leads the list, with Austin and Dallas also in the top five. Besides having a lot of space, Texas has been adding new residents at a steady pace, with the nation’s largest annual population growth between 2010 and 2016. More new homes means larger homes.
  • South equals size. Other Southern cities dominate the top 10, with Atlanta, known for its sprawl, at No. 2.
  • Money talks. The Washington, D.C., area, whose suburbs includes the three wealthiest counties in the country, comes in third. Boston, another wealthy city, shows up at ninth.
  • Show me? The Midwest lives up to its unpretentious reputation by having the most cities with the smallest houses. Missouri’s Show Me State nickname clearly does not refer to houses, with its two largest cities both in the bottom 10.
  • Older is smaller. Cities with older housing stock have smaller houses, including Detroit at  No. 45 on our list.
Source: LendingTree
Source: LendingTree

More Optimistic Than Millennials, Gen Z Is Here to Revolutionize the Housing Market (Property Shark), Rated: AAA

Key takeaways:

  • Gen Z has its eye on homeownership, with 83% planning on buying a home within the next 5 years
  • College debt is the #1 obstacle towards homeownership for Millennials and Gen Z
  • Gen X chooses intergenerational living to care for relatives more often than any other generation
  • Gen Z is willing to compromise on almost anything to keep costs down – but dreams of lots of space and amenities
  • Gen Z to pose serious competition to Millennials on the real estate market
  • Millennials are more realistic about their means, and the most pessimistic about the prospect of homeownership
Source: PropertyShark

Whatever they may see as the most significant hurdle towards homeownership, more than 80% of respondents from all three generations expect to buy a home in the next 5 years. Part of more established family units and with stabilized careers, Gen Xers are the least likely to buy homes in the near future, while Millennials are the most likely – 87% of Millennial respondents expect to enter homeownership within 5 years.

Considering that the oldest of Gen Z are barely 23, it is noteworthy that a whopping 83% see themselves entering the real estate market within 5 years.

Source: PropertyShark

B+E announces sale of Darien TD Bank property for $ 6.9 million (Patch), Rated: A

B+E (Brokers+Engineers), the first brokerage firm and trading platform for net lease (NNN) real estate, today announced the sale of property that is leased long-term to TD Bank in Darien, Connecticut.

Located at 55 Boston Post Road, the +/- 4,380SF location was sold for $6,900,000 at a 5.1% cap rate. The property has +/- 7 years remaining on the lease and was sold to a 1031 exchanger. B+E represented the seller, Chimblo Family Real Estate, LLC.

Real Estate Startup Landis Raises $ 2M in Funding (Finsmes), Rated: A

Landis, a NYC-based marketplace for institutional real estate investing, raised $2M in funding.

The round was led by Signia Venture Partners with participation from Red Swan Ventures, Graph Ventures, and Kima Ventures, as well as the founders of RealtyShares (Nav Athwal), Compass, Floored, Tango, Rypple, and Stanford professor and JetBlue Chairman Joel Peterson.

Fintech firm Curve looking to raise $ 50 million to become the ‘Amazon of banking’ (CNBC), Rated: A

Fintech firm Curve is aiming to raise $50 million in funding, its CEO told CNBC in an exclusive interview, as it looks to get some cash to boost its aim to become the “Amazon of banking.”

Smartphone brand can reflect creditworthiness: FDIC study (American Banker), Rated: A

A new study released Thursday bolsters the case for lenders to use borrowers’ digital footprints in assessing their creditworthiness.

The paper, released by the Federal Deposit Insurance Corp.’s Center for Financial Research, said the data trails people leave online — even down to what brand of smartphone they use — are useful at predicting default rates.

Fed studies rural branch closings (American Banker), Rated: A

For a regulator grappling with what is the right balance in big-bank supervision, the Federal Reserve is also trying to drill down on industry trends at the most micro levels.

The Fed’s top regulatory official, Vice Chairman of Supervision Randal Quarles, gave wide-ranging remarks Thursday on the central bank’s efforts to gather and understand data about the community banking sector.

AFR Promotes Brandao to President and Packer to COO (Business Insider), Rated: B

American Financial Resources, Inc. (AFR) is pleased to announce two key executive promotions. Laura Brandao has been promoted to President and Bill Packer is now Chief Operating Officer of the NJ-based leading niche lender.

United Kingdom

Are there too many property investment platforms? (Development Finance Today), Rated: A

A recent poll conducted by Development Finance Today revealed that 65% of industry professionals believed that there were too many property investment platforms in the market.
Source: Development Finance Today

I’m Stephen Moss, the founder and managing director of Sourced (Property Investor Today), Rated: A

Established to match UK and overseas investors with hand-selected investment opportunities, we offer UK-wide investment advice and property sourcing through our 34-strong network of franchises.  This guarantees the same level of local knowledge and off-market opportunities, anywhere in the country.

Since we started in October 2017 our network has grown from one to 34 offices, we have launched a new peer-to-peer (P2P) lending platform and we’re building on our current position as the country’s largest property investment platform and network of property sourcers.  We’re also the first company to provide a free online training platform that gives investors of all levels of experience, the skills, knowledge and support they need to grow their portfolios.

Multiply: the new app that wants to put a financial adviser in everyone’s pocket (Evening Standard), Rated: B

Multiply is the latest fintech app launching on the Apple App Store, which wants to be your own personalised financial adviser so you can understand your money and the best things to do with it.

How Manchester entrepreneurs should begin investing (About Manchester), Rated: B

  • Peer to peer lending – you may have heard of popular companies in this investment sector such as Funding Circle. With peer to peer lending, you lend money to business start-ups to help them become established. When they are profitable you get your money back with any agreed interest.
China

China Rapid Finance Announces Regulatory Report & Board Change (Crowdfund Insider), Rated: AAA

China Rapid Finance Limited (NYSE: XRF) announced last week that it submitted its P2P Compliance Self-Inspection Report to its local P2P regulatory office. According to the online lender, this new report is considered the first of three steps mandated in the inspection process, a key element in demonstrating compliance with industry reforms being promulgated by the National P2P Rectification Office.

China Rapid Finance then explained it is focused on the next two process steps:

  • A self-disciplinary inspection conducted by NIFA and regional regulatory authorities
  • verification of inspection results by the regional P2P Rectification Office to conduct on field inspections

China Looks to Foreign Investors and Pensioners as Distressed-Debt Saviors (The Epoch Times), Rated: A

According to data from Bloomberg, China’s total balance of non-performing loans (NPLs) reached 1.96 trillion yuan ($285 billion) at the end of June 2018. To help lower this figure, China has been pawning off toxic loans onto foreign investors and unsuspecting pensioners.

Oaktree Capital Management in September acquired 115 NPLs for 2.4 billion yuan ($350 million) from one of China’s “bad banks” China Huarong Asset Management Co., according to Bloomberg.

The digital divide: inclusion must not create exclusion (The Finanser), Rated: A

There’s a legitimate concern that the change that’s happened in Chinese society since 2014 with regard to rapid conversion from cash and cards to mobile payments has been too fast for some. What happens to those left behind in the digital economy?

European Union

H&M buys $ 20 million stake in Swedish fintech firm Klarna (Reuters), Rated: AAA

Fashion chain H&M (HMb.ST) is acquiring a small stake in Klarna in what will be the Swedish online payments services firm’s largest partnership so far.

H&M is paying around $20 million for a stake of less than 1 percent, a Klarna spokeswoman said, confirming a Financial Times report on Monday.

Mintos partners with Trustly to offer real-time transfers (P2P Finance News), Rated: A

MINTOS, Europe’s largest peer-to-peer marketplace, has partnered with payments company Trustly to offer its customers the option to transfer funds in real-time from bank accounts across Europe.

Mintos said the collaboration with Swedish e-payments company Trustly will allow investors using its platform to transfer money in real-time from bank accounts across 29 European countries. This strips out the usual waiting time that is associated with conventional clearing systems.

Money laundering and backlogs dent ING’s image as tech leader (American Banker), Rated: A

Since taking charge of ING Group in 2013, Chief Executive Officer Ralph Hamers has labored to make it the most digitally advanced lender in Europe. His motto: disrupt yourself before a competitor does it first.

It’s safe to say the tumult at ING during the last few weeks isn’t what Hamers had in mind.

Equity Crowdfunding Platform Anaxago Launches Asset Management Firm Anaxago Capital (Crowdfund Insider), Rated: B

Anaxago is launching an asset management firm, Anaxago Capital, to attract more institutional investors and ready itself to fund larger projects. With this, Anaxago expects to double its outstanding investments by 2020.

International

China’s Tencent invests $ 180 million in Brazil fintech Nubank (Reuters), Rated: AAA

Chinese gaming and social media firm Tencent Holdings Ltd (0700.HK) paid $180 million for an undisclosed minority stake in Brazilian financial technology company Nu Pagamentos SA, both companies said on Monday.

Inside TD Ameritrade’s integration with WeChat (Tearsheet), Rated: AAA

TD Ameritrade continues to explore how to connect with its clients over different platforms.

The company, which has already launched experiences on Messenger, Twitter DM, Amazon Alexa devices and Apple Business Chat, has launched a chatbot for WeChat.

TD Ameritrade’s chatbot allows retail investors in Hong Kong to do their research, access market information, and get support through one of the most popular social and messaging platforms in Asia.

Celsius, Pays Interest To Crypto Depositors (CoinTrust), Rated: A

Celsius, a recently established cryptocurrency lending firm, has announced that it offers interest to thousands of users who deposit Bitcoin and Ether with its wallet application. Celsius claims to have won over 10,000 users since its mobile app was launched on June 29, with an average deposit of 0.5 BTC or 5.50 Ether earning as much as 6.7% per annum. Celsius generates the interest income by lending the crypto to hedge funds which open short position in the crypto market.

APAC

KKR and Tencent lead $ 175m investment in Philippines’ Voyager Innovations (Banking Tech), Rated: AAA

Telco PLDT, investment firm KKR and Tencent are part of a $175 million investment in Philippine digital tech company Voyager Innovations.

MENA

UAE-based startup Smart Crowd just got funded by Shorooq Investments (Startup MGZN), Rated: AAA

Smart Crowd, a new real estate crowd investing platform is just closed a Seed Funding round with $600,000 from Shorooq Investments, followed by Abaxx Technologies500 Startups, and other high-level strategic individual investors.

Authors:

George Popescu
Allen Taylor

Wednesday February 14 2018, Daily News Digest

OnDeck gross revenue

News Comments Today’s main news: OnDeck becomes profitable. NepFin launches first online commercial lending platform for U.S. market. MoneyLion has 2 million customers. Sequoia China leads $40M DataVisor Series C. Moody’s reviews CommonBond for upgrade. Today’s main analysis: Review of OnDeck Q4 2017 earnings results. Today’s thought-provoking articles: The Future of Lending. Is investing RateSetter Isa worth it? Genie ICO: The […]

OnDeck gross revenue

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

News Summary

United States

OnDeck swings to profit, eyes second bank partnership (American Banker), Rated: AAA

The New York-based small-business lender recorded net income of $5.1 million in the quarter that ended Dec. 31, which compared with a $35.9 million loss in the fourth quarter of 2016.

OnDeck, which has recorded $94.5 million losses over the last two years, is cutting costs in an effort to achieve profitability.

Review of OnDeck Q4 2017 Earnings Results (Lend Academy), Rated: AAA

In the fourth quarter they generated $5 million of GAAP profit. To put this in perspective, this is $41 million better than the prior year period. This puts them on solid footing as they look towards priorities for 2018. Originations for the quarter were $546 million, up 3% from the prior quarter.

Source: Lend Academy

Gross revenue came in at $87.7 million, up 7% year over year. Gain on sale revenue or revenue from loans sold on OnDeck’s marketplace to investors totaled $0.6 million. Other income totaled $3.5 million, up slightly from $3.4 million in the previous quarter.

Source: Lend Academy
Source: Lend Academy

Full Year 2018

  • Gross revenue between $370 million and $382 million.
  • GAAP Net income (loss) attributable to OnDeck between $(2) million and $10 million.
  • Adjusted Net income between $16 million and $28 million.

First Quarter 2018

  • Gross revenue between $86 million and $90 million.
  • GAAP Net income (loss) attributable to OnDeck between $(5.5) million and $(1.5) million.
  • Adjusted Net income between $1 million and $5 million.

OnDeck Flips To Profitability Much To The Market’s Delight (PYMNTS), Rated: A

Originations were up 3 percent over the previous quarter to $546 million.

Loans sold or designated as held for sale through OnDeck Marketplace represented 3.9 percent of term loan originations. Provision for loan losses was $34.4 million and the Provision Rate was 6.4 percent, down from Q3’s 7.5 percent.

Gross revenue increased to $87.7 million, up 7 percent year-over-year, while net revenue was $42.1 million, up 159 percent year-on-year.

The cost of funds rate was 6.5 percent, which was a slight increase over Q3. OnDeck noted that figure will likely continue to tick up during 2018, as the Fed is forecast to keep raising short-term interest rates.

Online lender OnDeck’s profit beats on lower costs, shares soar (Reuters), Rated: B

Shares of OnDeck Capital Inc (ONDK.N) soared on Tuesday after the online lender reported better-than-expected quarterly profit as it set aside less money for bad loans, and managed to keep costs lower.

NepFin Launches First Online Commercial Lending Platform for -Trillion U.S. Market (Digital Journal), Rated: AAA

Neptune Financial Inc., or NepFin, a financial services firm, announced today that it has launched the first online commercial lending platform for mid-sized U.S. businesses, creating a new source of credit as well as business software solutions for a large, thriving sector of the economy whose borrowing options are limited.

NepFin also announced that it has raised a $10-million Series A round led by Sands Capital Ventures with participation from its existing investors. Michael Raab, Partner at Sands Capital, will join NepFin’s board, which already includes Third Point’s David Bonanno, currently a board member of SoFi, as well as Robert Schwartz, Managing Partner at Third Point Ventures. This round brings NepFin’s total capital raised to $13 million.

NepFin, whose platform has digital solutions built from the team’s years of experience in online lending and traditional finance, says that its focus is on one of the most underserved sectors of the broader U.S. economy – businesses with between $10 million and $100 million in revenue. NepFin provides loans of up to $60 million.

LendingClub at the Watermark Conference for Women (LendingClub), Rated: A

LendingClub is excited and proud to be a sponsor of the Watermark Conference for Women being held on February 23rd in San Jose, California. As part of the agenda, two of our Client Advisors from the Business Loans team, Mana and Somie, will be leading roundtable discussions with women entrepreneurs on the core elements to consider when exploring small business financing options.

Forbes Fintech 50 2018: The Future Of Lending (Forbes), Rated: AAA

Affirm, San Francisco

Makes instant three, six and 12 month loans for purchases from 1,500 online merchants. A handful of sellers subsidize 0% rates, but most loans carry annual interest rates of 10% to 30%.

Bona fides: More than 1 million loans issued. Partners include Wayfair and Expedia.

Better Mortgage

Digital-only mortgage originator estimates the loan an applicant qualifies for within three minutes using stated income and a credit score check.

Bona fides: Fannie Mae and five of nation’s six largest banks buy its loans.

Blend

Speeds up the mortgage approval process at the nation’s largest lenders with its cloud based white label software.

Bona fides: Wells Fargo and U.S. Bancorp are already onboard

CommonBond

Online lender refinances and finances undergraduate and graduate student loans.

Bona fidesCommonBond has made $1.5 billion in loans, but says just two have gone into default.

GreenSky

Provides on-the-spot financing for home improvement projects (with loans up to $65,000) via a network of contractors and bank partners — without itself taking on the risk of defaults. Most borrowers don’t pay a dime in interest thanks to zero-interest promotional periods that last from 6 to 60 months. Recently began offering financing at doctor, dentist and veterinary offices.

Bona fides: Has facilitated over $10 billion in loans

Kabbage

Lending platform offers nearly instantaneous small business loans. Uses creative alternative data to underwrite loans–such as the number of UPS packages a business sends and receives over time.

Bona fides: Over $4 billion in originations to 130,000 small businesses

LendingHome

Four year-old online lender started out providing bridge loans to fix and flip housing investors, a historically underserved segment. With original product now available in 25 states, LendingHome has expanded into personal mortgages in 14.

Bona fides: $2 billion in loans made; 10,000 homes financed

Tala

Approves developing-world borrowers who lack a credit history for micro-loans of between $10 and $500 by crunching 10,000 data points—from financial transactions to mobile games played—from an applicant’s smartphone.

Bona fidesHas made more than 4.5 million loans, with a repayment rate above 90%.

Upstart, San Carlos, CA

Uses alternative data such as education, employment history and whether applicants know their own credit score to underwrite and price loans. After five years of training its algorithms, it now approves 47% of loans without human intervention and with some of the lowest default rates in the industry.

Bona fides: $1.5 billion in loans originated to 120,000 borrowers

MoneyLion Reaches 2 Million Customer Milestone As Growth Accelerates (BusinessWire), Rated: AAA

MoneyLion, the digital personal finance platform for the financial middle class, today announced that it now empowers over 2 million customers to better their borrowing, saving and investing through personalized, AI-driven solutions. The growth of MoneyLion’s community is a reflection of the positive financial outcomes its customers have achieved and the platform’s unique approach to money management for everyday Americans.

The momentum behind MoneyLion’s customer growth follows a number of recent milestones for the company, including:

  • The December launch of MoneyLion Plus, a first-of-its-kind membership that combines guided savings, simple investing, access to low-cost loans, and personalized daily financial tips to help consumers build their credit, financial resilience, and first $2,000 in savings. MoneyLion Plus has democratized access to private banking-like services typically reserved for high net worth consumers, providing an opportunity for first-time investors to begin building wealth.
  • Completion of a successful $42 million Series B equity round in January, bringing MoneyLion’s total funds raised to $67 million. This financing accelerates MoneyLion’s continued development of innovative, inclusive financial products and services for America’s financial middle class.

Student lending platform on review for ratings boost (AltFi), Rated: AAA

Moody’s puts six tranches issued by CommonBond on review for upgrade.

Moody’s Investor Services has placed six tranches issued by CommonBond Student Loan Trust 2016-B, 2017-A-GS and 2017-B-GS on review for upgrade. The tranches are comprised of loans to students, and $488m of asset backed securities are affected by the review.

Dwolla Lands $ 12 Million (Finovate), Rated: A

In a short, three-sentence blog post, Dwolla CEO Ben Milne announced that the company closed a $12 million round of funding. The investment, which brings the Iowa-based company’s total to $51.4 million, was led by Foundry Group with participation from Union Square Ventures, Next Level Ventures, Ludlow Ventures, High Alpha, and Firebrand– all existing investors.

Fortress Balance Sheet: Goldman Sachs’ Online Lender Marcus Has Access to $ 17 Billion in Deposits (Crowdfund Insider), Rated: A

But today, Blankfein shared that Marcus now has access to over $17 billion in deposits representing a huge amount of credit firepower at an unbeatable cost to lend.

In a savvy move, Goldman acquired GE Capital’s retail deposits prior to launching Marcus. Since the acquisition, these deposits have grown an impressive 90%.

Secured Lender BlockFi Secures $ 1.55M Funding to Build Cryptoasset Ecosystem (Crowdfund Insider), Rated: A

BlockFi, a New York-based non-bank lender that offers USD loans to cryptoasset owners, announced a $1.55 million raise from ConsenSys Ventures, Kenetic Capital, PJC, SoFi,  Purple Arch Ventures and Lumenary. The new capital injection will be used to bridge the gap between traditional debt capital markets and the cryptoasset ecosystem.

Five credit unions sign with new text messaging platform in January to enhance lending and operations (CUInsights), Rated: A

Shastic, a SaaS company specializing in banking-specific technology services, has signed on five new customers in the first month of 2018. The recent growth follows the fintech company’s early launch of Elle, the conversational text messaging platform built for credit unions. Elle is an expansion of their automation services to deliver efficient, real-time message communication between a credit unions and their members.

Data-sharing spec revised to encourage open banking (American Banker), Rated: A

The Financial Services Information Sharing and Analysis Center announced Tuesday an attempt to move the ball forward on data sharing and open banking in the U.S.

The FS-ISAC on Tuesday released a new version of its technical recommendations for data sharing, the Durable Data API specification. This could become the standard banks and third parties adopt for PSD2-style data sharing and open banking. In fact, the new standard meets all of PSD2’s requirements, according to the security data-sharing organization. (However, PSD2 also requires third parties to register and agree to be overseen by a regulator, something unlikely to happen here.)

What We Talk About When We Talk About Finances (With Alexa) (PYMNTS), Rated: A

As anyone who has used an Alexa skill might know, the movement toward conversational finance, or financial conversations, is a tricky one, as specific instructions or questions (okay, they are commands, really) have traditionally been needed to spur the assistant to retrieve information.

To that end, USAA has sought to bring a natural cadence and flow to the conversation, one that builds, and built, on its experience in the PYMNTS Voice Challenge last year.

In play for customer data, TD Ameritrade rolls out Twitter trading bot (Tearsheet), Rated: B

The brokerage firm released a Twitter bot Thursday, allowing stock investors to execute trades, get market updates and browse educational content through direct messages. For the brokerage, encouraging traders who use Twitter to transact will give it, the hope is, a rich source of user data to offer personalized customer experiences and product recommendations.

Millennial entrepreneur strives to provide affordable financial advice to all (NewsOK), Rated: A

How to go about repairing your credit, reducing your student loan debt or obtaining the best mortgage loan now is available to you through a locally produced app.

The answers are among the widespread financial advice available to consumers nationwide through a new app called Coinmast launched by an Oklahoma City-based millennial entrepreneur.

At $11 a call, the tech startup offers such help from certified financial counselors, certified financial planners and certified public accountants whom Haller contracts nationwide. Experts, he said, offer advice on almost anything, excluding on individual securities, insurance and taxes.

Robo advice app Stash raises .5m Series D, releases investing for kids (AltFi), Rated: A

US-based micro investments app Stash has announced a $37.5m raise in Series D funding, led by Union Square Ventures. Existing investors Breyer Capital, Coatue Management, Entree Capital, as well as fintech familiars Goodwater Capital and Valar Ventures, also joined in on the round.

My Financial Advisor is a Robot (Direct Industry), Rated: A

Fintech company Moneyfarm uses cutting-edge technology as well as human financial expertise to help make investing simple, easy and cost-effective. The company also invests in artificial intelligence and machine learning and recently bought AI-driven chatbot Ernest. 

DirectIndustry e-magazine: What is the technology behind it?

Paolo Galvani: We use technology to match investors with investment portfolios that are specifically built for their investor profiles. Each new customer completes a survey during the sign-up process. The algorithms we have developed in-house match each investor to an investor profile that reflects their tolerance for risk. Investors are then paired with a portfoliothat is specifically built and managed by our team of investment experts to reflect the customer’s investor profile.

LPL rolls out robo-adviser to regional bank (InvesmentNews), Rated: A

Webster Bank, a $26.4 billion financial institution with branches in Connecticut, Rhode Island, Massachusetts and New York, announced that it would start offering access to Guided Wealth Portfolios, a digital advice platform developed by LPL Financial and BlackRock Inc.‘s FutureAdvisor.

Interest Doesn’t Always Bring Adoption of Robo-Adviser Tech (PlanAdviser), Rated: A

A new report published by Cerulli Associates examines the growth trajectory of the digital financial advice market that has occurred since 2015, finding there remains a clear inverse relationship between an investor’s age and their willingness to engage with purely digital financial advice platforms.

Scott Smith, director at Cerulli, notes that as of the third quarter of 2017, there is “greater openness to digital advice relationships, but a strongly negative correlation between age and interest remains.”

Cetera Financial Group Enhance Delivery of Advice-Centric Experience for Financial Advisors, Clients (PR Newswire), Rated: B

Cetera Financial Group (“Cetera”)*, a network of independent firms supporting the delivery of professional financial advice, today announced that the six firms comprising its network will be organized under its newly-created Traditional and Specialty Channels. The formation of these two channels is expected to accelerate the ability of each network firm to support Cetera’s Advice-Centric Experience for advisors and clients, which envisions a financial advice profession driven by goals-based planning and solutions that help clients achieve more predictable outcomes on their journey to financial well-being.

Looking for Credit Union Student Loans? Here’s How to Find and Apply for Them (Student Loan Hero), Rated: B

MyCreditUnion.gov provides a map that makes it easy to locate credit unions in your area. Input your address to find a list of credit unions, directions to each location, and available member services. You can then contact local credit unions to find out about membership requirements and student loan options.

One of the best ways to research your options is to use LendKey. LendKey offers easy access to hundreds of different credit unions and community banks that provide private student loans.

You have the option of applying directly through a credit union that allows people to join from anywhere in the United States. Some examples of credit unions open to individuals nationwide include Alliant Credit UnionDigital Federal Credit Union, and First Tech Federal Credit Union.

United Kingdom

New Isa from RateSetter offers 6% return: is it worth investing? (Which?), Rated: AAA

With the new product form RateSetter, you could earn 3-6% interest on your investment, depending on how long you lock your money away.

RateSetter’s Innovative finance Isa allows you to invest up to £20,000 in a tax year.

It is a flexible Isa product, meaning you can withdraw money and replace it without using up your £20,000 tax-free savings allowance.

Say, for example, you put £10,000 into your innovative finance Isa and then withdrew £5,000. Under the rules, you could still deposit £15,000 without incurring tax.

The shortest duration investment rolls over monthly with an interest rate of 3.1%. The longest is a five-year investment, which currently has an interest rate of 5.8%.

Money goes to… Minimum investment Projected rate
Abundance Green energy projects £5 6-9% over lifetime of investment (3-5 years)
Advancr Public and private businesses £1,000 5-6% depending on length of bond
Basset & Gold Fixed income bonds £1,000 3-7% depending on product
CapitalRise Property development projects £1,000 10% or more depending on the project
Crowd2Fund Businesses £10 9%
Crowd for Angels Crowd bonds funding small businesses £25, but companies can increase that 12%
Crowdstacker Businesses £500, but set by borrowers 5-7%
Downing Crowd Fixed-term bonds for small businesses £100 4-7%
Folk2Folk Asset-backed loans to small, mostly rural businesses £20,000 5.5-6.5% depending on product
Funding Circle* Businesses £1,000 4.8-7.5% depending on selected risk level
FundingSecure Asset-backed sub-prime loans to individuals £25 Up to 16%
Goji P2P Consumer, business and property loans £5,000 5%
HNW Lending Asset-backed loans to individuals and businesses £10,000 6-15% depending on term and risk
Kuflink Property loans £100 5%
LandlordInvest Asset-backed loans to landlords £100 5-12%
Landbay Buy-to-let mortgages £5,000 4%
LendingCrowd Business loans £1,000 6%
Lending Works Individuals £10 3-5% depending on term
Money&Co. Businesses £100 8%
Mongoose Crowd Community energy projects £100-200, but can vary by project 4-7%
Property Crowd Commercial and residential developments £5,000 10%
Proplend Property of varying types £1,000 5-12%
Ratesetter Businesses, individuals and property developers £10 3-6% depending on product
Rebuildingsociety Small and medium-sized businesses £10 9.7%
Relendex Commercial and residential property loans £500 10%
UK Bond Network Businesses £5,000 11%
Zopa** Individuals £1,000 4-4.6% dep

Fintech group TruFin raises £70m (Finextra), Rated: A

TruFin, a British fintech and banking business with fingers in various niche lending pies, has raised £70 million through a listing on the LSE’s AIM market.

LendInvest unveils product transition process (BestAdvice), Rated: A

The Product Transition process allows existing borrowers to transfer between specialised loans that are tailored to support them at each stage in their development project.

Lendy returns £2.1m loan repayment from luxury property in Chelsea (Mortgage Introducer), Rated: A

Peer-to-peer lending platform Lendy returned a £2.1m loan repayment to P2P investors from a luxury apartment in Chelsea, on an investment made through Lendy.

Lendy appoints new head of finance (Bridging&Commercial), Rated: B

Andrew Wawrzyniak has joined the peer-to-peer lending platform from Fund Partners, a fund manager whose clients include Octopus Investments, Pictet Asset Management and Russell Investments.

China

Sequoia China leads $ 40M DataVisor Series C (Bankless Times), Rated: AAA

DataVisor, a provider of fraud detection solutions using unsupervised machine learning, today announced a $40 million Series C round of financing led by Sequoia China, with participation from existing investors New Enterprise Associates and GSR Ventures.

Rock Wang, managing director at Sequoia China, will join DataVisor’s board of directors. With this new round of financing, DataVisor will expand its global footprint in the fraud detection and prevention market, which is estimated to reach $41.6 billion by year 2022 according to research firm MarketsandMarkets.

European Union

Swedish Online Payments Company Klarna Shuts Down Tel Aviv Development Center (CTech), Rated: AAA

Swedish online payments company Klarna Bank AB (publ) will be shutting down its Tel Aviv development center during the next few months, the company announced Tuesday. All 31 of its employees in Tel Aviv were offered the opportunity to remain with the company and relocate to one of its Swedish or German offices.

Banco BNI Europa to invest with CrossLend (Finextra), Rated: A

Banco BNI Europa and CrossLend have launched a cooperation whereby Banco BNI Europa invests into notes issued by CrossLend Securities SA.

International

Barclays faces new charge, Triodos innovates and outlook for Citizens Bank in the US (Financial Times), Rated: A

Martin Arnold and guests discuss the latest charges against Barclays, Bevis Watts of the ethically-focused bank Triodos talks about his new UK peer-to-peer lending model and Bruce van Saun explains what US rate rises will mean for Citizens Bank.


 

Australia

DirectMoney Secures New Strategic Investment From Alceon For Growth & Innovation Initiatives (Crowdfund Insider), Rated: AAA

Australian marketplace lending platform DirectMoney announced on Tuesday it secured a strategic investment from alternative investment manager Alceon to fund growth and innovation initiatives.

According to DirectMoney, the investment will be structured through an initial placement of $600,000 at $0.042 per share (being 14,285,715 new shares), a 56% premium to the price at close of trading on February 9th and equivalent to a 3.1% shareholding.

India

Why just rent when RentoMojo also gives you the option of renting and owning (YourStory), Rated: AAA

Online rental and financing marketplace RentoMojo, which lets consumers in eight cities lease furniture, two-wheelers and home appliances, has launched an additional  rent-to-own model. 

PE AND VC OPPORTUNITIES IN 21ST CENTURY INDIA (AllAboutAlpha), Rated: AAA

ARA Law, a firm based in Mumbai and Bangalore, India, has issued a paper on private equity and venture capital in that country.

The main text of the paper begins with sectoral analysis and market behavior. PE and VC investments in India declined in the early months of 2017, but they had started to pick up already before the end of the first quarter and in the third quarter investments by such vehicles “surprised the market with a tremendous jump in deal volume as well as value.”

In August of that year the deal value reached US$5 billion. The third quarter as a whole saw 129 deals of value greater than US$100 million, aggregating to about US$7 billion.

The most lucrative sector last year was e-Commerce, “in spite of the sharp fall in investments by the end of AY 2016,” followed by real estate. In the 3d quarter, e-Commerce recorded roughly US$2.6 billion in deals across 18 deals. Real estate?  US$2.3 billion across 13 deals. Banking and Financial Services? Third place in the league table with US $1.4 billion across 25 deals.

MoneyOnMobile Raises $ 5 Mn Funding From S7 Group (Inc42), Rated: A

Mumbai-based fintech startup MoneyOnMobile has raised $5 Mn in Series H funding from Russia-based private aviation and aerospace holding company S7 Group. The development comes just two weeks after the startup secured $7.6 Mn Series F funding from undisclosed investors.

Asia

Genie ICO: A Blockchain Network For Decentralized Business Loans (Global Coin Report), Rated: AAA

Genie was created to provide individuals based in Asia with a unique way to borrow and lend money for their business using a peer-to-peer system that is based on a blockchain network. The Genie ICO has been created by an experienced team after observing the rapidly changing Asian financial landscape ever since cryptocurrencies, ICOs, and blockchain technology grew to prominence in 2017.

The platform will also have its very own token Crowd Genie Coin (CGC) which will be generated via an ICO. There will be a limited supply of 120,000,000 tokens available. Of this amount, only 50 million will be available for purchase during the token sale. The rest of the tokens will be used for facilitating transactions on the platform, will be given to the founders, used for distribution, etc. All tokens that are not bought during the token sale, however, will be destroyed to increase the value of a single CGC.

The Genie team hopes to raise a total of $35,000,000 throughout the ICO and the value of 400 CGC tokens has been estimated to be of equal value of 1 ether, which at the time of writing equates to $858. This means that a single CGC is worth $2.15. However, the interested investor can invest a minimum of 0.1, which will attract a wide variety of investors.

Authors:

George Popescu
Allen Tayl

Wednesday October 25 2017, Daily News Digest

chinese investors

News Comments Today’s main news: RateSetter partners with Experian. Australia publishes fintech regulation draft laws. Lending Loop hits $10M financing milestone. TD Ameritrade offers stock trading through Facebook Messenger. Abra secures $16M in Series B led by Chinese electronics manufacturer. Zero raises $8.5M for credit card that acts like a debit card. Nested raises 36M GBP. TransferWise changes its fee structure, but […]

chinese investors

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

MENA

Canada

Latin America

News Summary

United States

TD Ameritrade Clients Can Now Trade Stocks on Facebook Messenger (Bloomberg), Rated: AAA

TD Ameritrade Holding Corp. customers are now able to trade equities and exchange-traded funds using Facebook Inc.’s Messenger services, according to a company statement Monday. Clients can also make deposits, access quarterly performance video statements and receive weekly alerts that rehash market moves.

Hon Hai invests in fintech start-up (Taipei Times), Rated: AAA

Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics manufacturer, participated in a US$16 million Series B fundraising program to invest in US-based digital wallet start-up Abra, the new firm said on Monday.

Barhydt said that Abra’s existing investors — Arbor Ventures, American Express Ventures, Jungle Ventures, Lehrer Hippeau and RRE — also participated in the fundraiser that closed on Monday.

The program helped Abra reach more than US$35 million in total capital, Barhydt said, but did not elaborate on potential uses of the additional US$16 million.

Zero raises $ 8.5 million for a credit card that functions like a debit card (TechCrunch), Rated: AAA

Just one-third of young adults have a credit card, according to a Bankrate survey.

A startup called Zero thinks it has a solution to this and it is gearing up to launch a credit card that functions like a debit card. The startup is also raising $8.5 million in a funding round led by ENIAC Ventures, including participation from NEA, Lightbank and others.

Biometrics is Going to Eat the Finance World (Lend Academy), Rated: AAA

In a recent survey it was revealed that 81% of people use the same password for multiple accounts with that number being even higher, at 92%, for millennials.

The introduction of Touch ID on the Apple iPhone in 2013 was a seminal moment in the history of biometrics. People could suddenly use their thumb or finger print as an identity verification tool and forgo using a password. Today, on my phone I can login to my bank account, buy music or apps, buy a plane ticket, even check my Lending Club account all with the press of my thumb.

While still primarily in the testing stage in banking, this past summer Bank of America announced the trialing of iris scanning technology from Samsung. In the UK, TSB is becoming the first European bank to start using this same technology, also with Samsung phones.

Behavioral biometrics can capture things like hand-eye coordination, pressure, hand tremors, keystroke dynamics, gait analysis, mouse use characteristics, navigation, scrolling and other finger movements.

USAA offers three variations of biometrics authentication already in their mobile app. Just this week Samsung announced a partnership with Biocatch to bring behavioral biometrics to its Nexsign biometric authentication platform.

‘We’re moving from the back end to the front end’: Cross River Bank CEO Gilles Gade (Tearsheet), Rated: A

Cross River banks some of the biggest names in fintech, including at least a dozen online lending companies like Affirm, Marlette and Rocket Loans. It has also developed payments solutions for faster, more secure and lower-cost transfers that have been integrated by TransferWise and the bitcoin wallet Coinbase, as well as Google Wallet and Stripe in the past.

It’s been almost a year since you announced your VC funding. How have you been using it?
We have absorbed the capital very quickly, managed to deploy it on the marketplace lending side. We like to retain loans from the origination platforms so instead of selling 100 percent of the origination we retain 10 percent. As our partners are growing nicely, naturally that 10 percent has kept increasing.

Can both banks and fintech vendors deliver banking-as-a-service?
We’re strong believers that BaaS has to be delivered by a bank. The fintech players need access to payment rails and they’re going to use a bank ultimately to do that. As a service, the bank could be either the facilitator of a transaction or the purchaser of the BaaS technology to provide it to consumers. There is a level playing field now — consumers can have the same functionalities in a small bank in Nebraska that they can have with a Chase or Wells Fargo.

Are banks prepared?
Most banks are not equipped or not API-driven, ubiquitous, priced properly — and the banks that are, the big banks, have been unwilling to do that because it would cannibalize some of their business or presents high risk — do they have the required compliance and adequate staff to be able to manage the operations?

What’s going on inside Almond?
Almond is our exploratory R&D lab for us to understand the aspirations of consumers. We’re trying to develop a front-end solution that could possibly be a killer app that we could white label and sell as one BaaS functionality — so that would be an online or mobile app for a bank account. We’re moving from the back end to the front end.

loanDepot Announces Agreement with Artificial Intelligence Real Estate Technology Company, OJO Labs (PR Newswire), Rated: A

Today loanDepot announced an agreement with OJO Labs, Inc. to act as the mortgage provider of its machine-powered assistant known as “OJO.” By matching OJO’s leading AI technology with loanDepot’s digital lending platform, melloTM, the combined offering will allow house hunters to access real estate and mortgage information, and get pre-qualified, through an entirely digital, mobile-first experience.

Large banks make terrible partners, fintechs say (American Banker), Rated: A

While large banks and fintechs are ostensibly working more closely together than ever, in private conversations and even publicly at a few conferences, fintech leaders have expressed increased frustration about working with bank partners.

Though they won’t name names, they claim tier-one U.S. banks string them along, fail to communicate, don’t pay anything and, worst of all, out-and-out steal intellectual property.

More seriously, fintechs claim large banks are bad at paying for new technology and services.

Parker Crockford, commercial director for the U.S. at identity verification software startup Onfido, said at the RegTech conference in early October that when he’s engaging with large financial institutions, “we get pulled into a lot of innovation conversations where they just want to pick our brains and look cool. I don’t have time for that any more. I’ll say, ‘I’m happy to give you a white paper or a 20-minute chat over the phone.’”

‘Buy The Block’ on its Way to Raising Millions of Dollars for Property Development in Black Communities (BlackNews.com), Rated: A

Entrepreneur Lynn P. Smith is the founder and CEO at Buy The Block – one of the only Black-owned platforms in the country that is dedicated to making investments in real estate as a group more accessible. The movement is presently on its way to recording massive success in funding for diverse development projects across Black communities in the US.

This enviable initiative offers every Black American an opportunity to invest as little as $100, and connect with other investors – with an added advantage of helping every member buy a piece of their first block.

Evolve Capital Partners Advises on CleanFund’s Financing Transaction (Accesswire), Rated: A

Evolve Capital Partners,Inc. is proud to announce that its client, CleanFund Commercial Capital, Inc., the leading direct provider of commercial Property Assessed Clean Energy (“C-PACE”) financing, recently announced its first closing of a $15 million equity financing round, led by Vulcan Capital affiliated entities. The financing will accelerate CleanFund’s growth across the U.S. and help the company continue to meet growing demand from commercial property owners.

Thrive Delivers Landmark Performance Gains for Horizon (Thrive), Rated: A

Thrive Inc. (Thrive) is excited to announce the compelling performance of its digital lending technology, ensuing from its multi-year technology licensing agreement with Horizon Community Bank (HCB), a leading Arizona-based FDIC insured bank and subsidiary of Horizon Bancorp, Inc.

Key Performance Highlights:

  • Application Time: Avg. of 5 minutes, as opposed to days
  • Automated Decisioning: 90% of applications are instantly decided; powered by Thrive’s configurable credit rules based algorithms
  • Time to Decision: <1 Day, as opposed to several weeks
  • Loan Booking Rate: 100%, as applicants prefer the quick digital application and decision process
  • Offer to Close: 1.5 Days, digital closing enables efficiency

Key Portfolio Highlights:

  • Portfolio Interest Yield: Above market interest rates drive loan profitability
  • Customer Acquisition Costs: <$200, driven by leveraging internal bank customers as well as new customers
  • Delinquent/Charge-Off: 0%, effective underwriting and real time loan monitoring is driving modern and powerful risk management while also compressing loan reviews
  • Monthly Origination Growth: 60%, driven by customer demand for a quick, efficient and friendly loan application experience

IBM and Zelle team up to advance P2P payments (Banking Technology), Rated: A

IBM says it has launched an “industry first” solution to support the full lifecycle of peer-to-peer (P2P) transactions, from the back office of financial institutions to the mobile device.

The project is a collaboration with Zelle, a P2P network in the US built on the clearXchange platform. Zelle now includes over 20 banks and credit unions, and is poised to reach an estimated 85 million US customers this year.

How FinTech Companies Are Closing The Banking Gap (Forbes), Rated: A

According to the World Bank, there are two billion people globally who currently have no access to banking services.There are many reasons for this: they may not have built up enough traditional credit history, they may have bad credit because of poor financial choices in the past, or they may live in an area where access to credit and other financial services are limited.

For instance, Jennifer Tescher, founder and president of The Center for Financial Services Innovation (CFSI), has helped launch financial inclusion initiatives by incubating startups addressing U.S. financial health through their Financial Solutions Lab. Some of these startups include Propel, which streamlines the food stamp process; Bee, a mobile alternative to potentially predatory financial services for low-income people; and popular startups that aim to assist with savings and debt repayment including Digit, EarnUp and LendStreet.

Founder and CEO Shivani Siroya, of California-based Tala, is trying to fix the challenge of low access to financial services by providing alternative credit scoring and instant credit delivery via mobile wallet.

Mexico, for instance, sees 38% mobile wallet use, compared to 17% overall in the US, even though 93% of Americanshave access to financial services.

3 Types Of Alternative Lenders You Need To Know About (Bisnow), Rated: A

1. Crowdfunding Platforms

Real estate crowdfunding hit $2.5B in 2015 and shows no sign of slowing down.

Platforms like RealtyShares and Fundrise offer several loan options and flexible payment terms, and cater to different asset classes. The latter prioritizes small-deal properties valued under $50M, and the former charges no fees for the first two years, or until an investment earns a 15% annualized return.

2. Nondirect Marketplace Lenders

Nondirect marketplace lending uses technology to connect lenders directly with borrowers, bypassing traditional banks, reducing barriers to transaction, and offering strong savings for borrowers and good returns for lenders. Popular for auto and student loans, financial institutions have increasingly stepped into the commercial lending role on these platforms, creating a marketplace in which loans are packaged and sent out to individuals, hedge funds, wealth advisers and banks.

3. Direct Lenders

Money360 is a direct lender with discretionary capital that ensures certainty of execution and timely closings. The lender offers loans between $1M and $20M on both bridge and permanent loans, with competitive terms and features similar to traditional lenders. Bridge loans are interest-only, and like banks, permanent loans use 25- to 30-year amortization schedules.

12 Tips to Get The Right Loan For Your Startup (Killer Startups), Rated: A

1. How much do you need for a small business loan for your startup?

Microloans work with the Small Business Association (SBA). They are for businesses that need to borrow between $35,000-$50,000 and have a limited credit history.

2. How quickly do you need access to loan funds?

If you’re positive that you need $100,000 right-off-the-bat, then an installment loan may be a better option. If you need $50,000 to start, but believe you’ll need additional capital down the road when you start to grow, you may want to look into revolving credit.

3. What is the loan going to be used for?

4. How long have you been in business?

If your business is still in the early stages, it may be difficult to secure a loan from traditional lenders like a bank since they require a positive credit history, collateral, business plan, projected financial statements, and cash flow projections.

In this situation, you may have to search for a small business loan from an alternative lender like an online lender like Lending Club.

5. Do you have collateral?

Do you have an property or inventory that you can put up as a collateral? If not, you may not qualify for a loan from a traditional lender. Instead, you may have to seek alternative funding options where you would offer accounts receivable, future sales, or a percentage of the company in exchange for the loan.

6. Eliminate your bad debt.

7. Research possible loan provider options.

Do your due diligence and seek lenders that are transparent with their rates, terms, and have positive reviews from customers.

8. Consider your niche.

9. Find a grant or contest.

10. Crowdfund Your idea.

11. Pay attention to APR, fees, and other costs.

12. Investor or capital?

Payday lender Speedy Cash files for IPO (Axios), Rated: A

The parent company of payday lender Speedy Cash has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol CURO, with Credit Suisse listed as left lead underwriter. The Kansas-based company reports $33 million of net income of $442 million of revenue for the first half of 2017, and is owned by private equity firm FFL Partners.

Islands, Bodyguards, and Mansions – How would you spend $ 1 Billion? (NJ Online Casinos), Rated: B

Our new survey finds out the top 10 ways that people across America would spend their money if they won a $1 billion jackpot, including how many would buy a mansion, and how many wouldn’t give any to charity.

  • 89% would give some to their close family
  • 49% would pay off their debts as their first act
  • 37% would give some money to their friends
  • 28% would put $100 – $500 million into savings
  • 28% would buy a mansion

Arcadia launches new online payment options (Drapers Online), Rated: B

The owner of brands including Topshop, Topman, Miss Selfridge and Dorothy Perkins has joined forces with payment provider Klarna to offer online customers the option of paying for goods 30 days after delivery, without being charged interest.

20% of millennials said they would feel less guilty if they were offered deferred payment options, while one in five were more likely to complete a purchase if they knew they could spread the cost over time.

United Kingdom

RateSetter partners with Experian to boost business credit assessment (P2P Finance News), Rated: AAA

RATESETTER has teamed up with Experian to boost its credit decision-making process as it expands its commercial finance division.

Under the partnership, Experian is providing credit reference data and analytical services to RateSetter.

This has enabled the P2P lender to increase the number of business loan applications it processes each month from 150 to more than 600.

Nested Raises £36M in Third Round of Funding (Finsmes), Rated: AAA

Nested, a London, UK-based PropTech startup, raised £36m in its third round of funding.

The round was led by Global Founders Capital.

The company, which has raised almost £50m in total funding to date, intends to use the capital to expand its business reach, initially within London and in the near future expanding across the U.K.

TransferWise changes fees for GBP transfers, introduces complicated flat transaction fees (TechCrunch), Rated: AAA

Fintech startup TransferWise has built a solid reputation when it comes to transparency. The startup just announced new fees for transfers initiated from the U.K. And it’s quite hard to understand if transfers are going to be cheaper or not after the change.

TransferWise is switching from a simple variable fee to a flat transaction fee with a lower variable fee.

Let’s take an example. If you’re trying to transfer £1,000 from the U.K. to the Eurozone. With the old fee, you’d pay 0.5 percent (or the equivalent of £5) in fees. With the new fee, you now pay 0.35 percent + £0.80, which represents £4.30. You eventually get more euros.

For a £1,000, you now pay 14 percent less if you take into account all fees. But this percentage is going to change depending on your transfer.

Because of this tiny little flat transaction fee, you’ll now pay morethan before if you transfer less than £530.

This is even worse for GBP/USD transfers. If you transfer less than £800, you now pay more than before. But it’s now cheaper if you transfer more than £800.

Is an IFISA-inspired boom coming to the P2P sector? (P2P Finance News), Rated: A

THE PEER-TO-PEER Finance Association (P2PFA) has reported yet another quarter of increased lending among members in the sector, and the figures show just how beneficial ISA manager status can be.

P2P platforms offering Innovative Finance ISAs (IFISA) have previously said that most inflows have been coming in this tax year, and the latest P2PFA data shows just how much of a boost the fully regulated firms are getting.

Lending Works and Landbay, which both received full Financial Conduct Authority (FCA) authorisation and launched IFISAs at the start of this year both recorded some of the biggest increases in loanbook sizes and lenders.

The property loan fund that won’t surprise you with a lock in (Citywire), Rated: A

For LendInvest Real Estate Opportunities, a small Luxembourg-based fund run by the former peer-to-peer lending platform LendInvest, post-referendum it has provided an opportunity.

Assets in the fund have more than doubled to £130 million since the Brexit vote as investors have viewed its investments in short-term loans to property developers as a different way to get exposure to bricks and mortar.

The fund can be held in a self-invested personal pension (Sipp) but is not an eligible investment for an individual savings account (ISA).

The real estate fund has become a key focus for LendInvest as it has moved away from peer-to-peer lending after the Financial Conduct Authority (FCA) made it clearer what it thought P2P actually meant.

The fund lends to professional investors, developers and landlords who use their property portfolio as a prime source of income, transact several times a year and operate as a business.

‘He then went into discussions with the bank because he wanted to keep the asset and let it out, so refinanced. It had a valuation of £10 million, so 100% return in 10 months. We charged 15% interest.’

With interest rates that high it is not surprising perhaps that the fund has so far achieved its annual target of an 8% net return.

Accounting and business banking fintech raises €750k in seed round (AltFi), Rated: A

UK startup Countingup has raised €750,000 led by Frontline Ventures along with private investors to support sole traders.

Uniting business banking and accounting into a single product, Countingup aims to use the funding to build an accounting bank to serve 1m entrepreneurs.

Invest in property development from just £500 (This is Money), Rated: A

A new crowdfunding platform is allowing retail investors the chance to back residential property developments by investing as little as £500.

The start-up, called Homegrown, is giving individuals the chance to invest in developments – such as a converted milk processing factory that’s being turned into flats and offices – and claims projected annual returns of around 12 per cent over roughly two years.

HOW DO I… ACCESS BUSINESS FINANCE? (BQ), Rated: A

While credit conditions have continued to improve over the last 12 months there is still an issue for smaller businesses when it comes to the best finance options available and information on how to access them. There has been rapid developments in the different types of funding available to businesses, including peer-to-peer lending, crowd funding and business angel finance, but small businesses don’t always have the time to navigate around all the types of finance available.

Businesses can discover the funding options available to them including The Start Up Loans Company by using the Business Finance Guide (published by the British Business Bank in partnership with the ICAEW, and a further 21 business and finance organisations).

Equity finance

Whether you’re starting out or experiencing a high-growth phase, equity can be an important resource to provide finance as well as broader expertise. There is a breadth of equity funding options available, including the Northern Powerhouse Investment Fund, which provides early or late stage equity finance ranging from £50,000 to £2m.

Debt finance

At any stage of its development your business is likely to need a mix of different forms of debt, all of which have their advantages for business growth. The Northern Powerhouse Investment Fund offers microfinance covering micro-finance ranging from £25,000 to £100,000 and debt finance covering larger business loans £100,000 to £750,000.

London – Still The #1 FinTech Hub (Let’s Talk Payments), Rated: A

In H1 2017, UK attracted $564 million of VC investment, up 37% on H1 2016. FinTech is worth $9.25 billion to the UK economy and now employs 60,000 people.

About 77% of UK businesses are aware of FinTech products and services and 65% have adopted at least one FinTech application, with a fifth (19%) taking on four. MarketInvoice, a London-based invoice financing firm found that these as result of using FinTech products and services, adopters reported saving (on average) over £5,500 a year.

London consistently attracts foreign direct investments (FDI) from around the world. Between 2006 and 2016, the capital has recorded investments from 67 different countries. The US, India, China, Japan and Spain together accounted for 56% of the investment. Of top source countries, the fastest-growing contributors to FDI into London are China, which has seen a tenfold increase over the last 10 years, Italy (+450%), and Canada (+400%).

Seven tips to help prepare to raise funds for your GP practice (Practice Business), Rated: B

1 Decide on equity or debt – or a combination

For example, if your business is already two-years old try Funding Circle.

Thirty per cent equity and 70% debt is a good ratio and can make the company easier to manage.

2 Test your financial model – it must be robust

3 Be realistic about your valuation

4 Decide on the appropriate people to approach

In the £1 to £5m area, try EIS/SEIS funds and VCT funds. This is where an expert adviser can be helpful in providing introductions and knowledge. For smaller amounts contact Angel Investors.

5 Make contact and ensure you follow-up

6 Prepare the right information for the right stage in the process

7 Take your team with you

Number of UK financial services trade marks surges due to fintech growth (Finance Feeds), Rated: B

According to data provided by professional services firm RPC, the number of trade marks registered by financial services firms has jumped 35% in five years – from 3,141 in 2011 to 4,228 in 2016.

Examples of fintech companies and challenger banks that have registered a number of trade marks recently include Atom Bank, Monzo, and Redwood Bank. Last year, the raft of fintech and financial services trade marks registered in the UK comprises names like “ Zentity” and “Numus Cash”.

China

A glimpse at how Qudian and China’s online micro lenders revolutionise financing (SCMP), Rated: AAA

One day in July, Carina Shi awoke to incessant phone calls by angry, loud men, seeking repayment on a 20,000 yuan loan taken out by a friend.

Unbeknown to Shi, the 20-year-old college student had been listed as the contact by a friend who defaulted on a loan borrowed from Qudian Inc, the Beijing-based online lender at the centre of the fourth-largest US initial public offering this year. Debt-collection calls only ceased after Shi called her friend’s mother in Inner Mongolia to resolve the debt.

Shi’s experience offers a glimpse into the inner workings of Qudian, a provider of micro loans that ballooned within three years into a sizeable lender offering a loans book of 38.2 billion yuan (US$5.6 billion) to 7 million active users during the first six months of 2017.

The annualised interest rate on 59.5 per cent of loans lent last year surpassed 36 per cent, according to the company. That compares with between 12 and 14 per cent among the country’s largest commercial banks.

That crackdown gave Qudian and other online lenders like Ppdai, Fenqile and Hexindai the niche to build a market, which expanded by 23 per cent in two years to 452.4 billion yuan at the end of last year.

Chinese overseas investors prefer tech stocks (Technode), Rated: AAA

China’s sizable middle class is on fire. A McKinsey & Company report projected that they would account for 76% of the country’s urban population by 2022.

When we say Chinese people are becoming increasingly tech-savvy, we don’t only refer to the fact they are the first adopters of cutting-edge technology software and voracious buyers of smart gadgets. We also have a knack and understanding for technologies to seek better investment returns. The report shows that tech stock is the most popular category for Chinese-speaking investors.

A dominating 56% interviewees said they have invested in Alibaba, which had a growth of nearly 80 percent since the start of this year. JD and Apple performed equally well to rank the second and third.

Source: Technode

As digital natives, the country’s younger generations are first-movers to the sector. The report points out that post-80s gen represents nearly half (47.2%) of the users with post-90s gen comes as a close second (36.2%).

Over 65% of Chinese traders prefer Chinese companies when investing in the US.

Over 55% of Chinese investors will hold a position for over three months, and 20.03% for longer than a year.

The Role of Punctuation in P2P Lending: Evidence from the People’s Republic of China (Asian Development Bank), Rated: AAA

Using data from Renrendai, one of the largest P2P lending platforms in the People’s Republic of China, we investigate how the amount of punctuation used in loan descriptions influences the funding probability, borrowing rate, and default. The empirical evidence shows that the amount of punctuation is negatively associated with the funding probability and borrowing rate. We propose that the use of punctuation affects the readability of a loan description and reflects borrowers’ self-control and cognitive ability.

Source: ADB.org

Download the full report here.

China’s Latest Fintech Offering Looks Overpriced (WSJ), Rated: A

Investors sent the stock of Chinese online microcredit company Qudian Inc. QD 7.00% —which literally translates as “Fun Shop”—up nearly 50% on its first day of trading on the New York Stock Exchange last week. But on Monday, following criticism of Qudian’s high lending charges in Chinese social media and newspapers, the stock tanked, dropping almost 20%.

The market does seem ripe for growth: Nonmortgage consumer loans are only around 20% of household deposits in China, according to Bernstein analysts.

Still trading at 6.6 times book value even after Monday’s share price tumble, Qudian is asking for a lot of faith compared with more-established lenders.

Source: The Wall Street Journal

Chinese P2P lenders face IPO scrutiny (International Financial Law Review), Rated: A

Online lending companies are facing a number of issues when planning an initial public offering in Greater China and the US, according to panelists at last week’s IFLR Fintech Asia conference in Hong Kong. Regulators’ attitudes towards business models,
accounting requirements and risk reserves are issues companies need to be mindful of.

Credit Industry Leader Joins China Rapid Finance Board of Directors (PR Newswire), Rated: B

China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE: XRF), one of China’s largest consumer lending marketplaces, today announced the appointment of Zhou Ji‘an, Executive Director and General Manager of China United SME Guarantee Corporation (“Sino Guarantee”), to its board as a non-executive independent director.

A seasoned chief executive in the financial industry, Mr. Zhou brings to the Company more than 18 years of experience in global organizations, financial institutions and government.

European Union

3 Advices For Peer-To-Peer Investors From ‘Inspeer’ Ceo (Coinidol), Rated: A

AltFi Data Analytics, published by investment bank Liberum, shows that the ratio of operating costs to the loan portfolio at the crowdlending platforms is lower by almost 40% comparing to banks.

  • Diversification is a key
  • Know your borrower
  • Pay attention to risks
International

Creation of Billion Dollar Startups Shifting Out of US (BW Disrupt), Rated: AAA

Today, there are 214 unicorn startups globally — private companies that have reached a hefty valuation of over $1 billion.

Of these, the United States has taken the largest share of the world’s most valuable private companies, with 127 US-based startups reaching unicorn status since 2013. China follows in second place, producing 59 unicorn companies over the same time period.

Since 2013, the share of new unicorns born each year in the United States has consistently dropped, from 75 percent of all unicorn births in 2013 to less than half (49 percent) by 2015. That number sunk even lower to hit just 43 percent last year.

Chinese unicorns rising

In 2017 YTD, 16 new unicorns have been born in China.

In the third quarter of 2014, Lu.com, a finance marketplace that deals largely with P2P lending, reached a $10 billion valuation after a VC round backed by Morgan Stanley and Ping An Insurance.

Looking at companies with the highest valuations upon their entrance into the unicorn club, 7 of the top 10 spots go to China-based companies, with the US claiming the remaining 3.

Wish Finance: Small Business Lending Blockchain Platform (BlockTribune), Rated: A

BLOCK TRIBUNE: Could you tell us a bit how Wish Finance got started?

EUGENE GREEN: A decade ago I was a small businessman. Several of my closest friends are small businessmen in Asia, Europe and the US. All of them had the same massive problem, which I had – an inability to get a loan. So I founded Wish Finance to solve this major pain point.

BLOCK TRIBUNE: Where do you see the value of Wish tokens in the medium to long-term and the ultimate benefit for token holders?

EUGENE GREEN: We are not selling digital candy wrappers, but a token convertible to real company equity. The token price will go up with the company valuation, and comparable FinTech lending companies showed a fiftyfold valuation growth in only a few years. So the token holders could stand to benefit in a big way.

Better structure could protect investors in P2P market – BoJ paper (Central Banking), Rated: A

A research paper published by the Bank of Japan on October 23 suggests using specific purpose companies and specific purpose trusts to strengthen investor protection in the field of P2P lending.

P2P lending matches borrowers and lenders online without making use of traditional financial intermediaries such as banks. In recent years, the amount of outstanding loans in the P2P sector has grown significantly in the UK, the US and China.

Australia

Australia publishes draft laws for relaxed fintech regulation (Reuters), Rated: AAA

The Australian government published draft laws on Tuesday that would let financial technology companies operate without a full licence, a measure it said would encourage innovation without compromising existing levels of consumer protection.

Financial technology companies would be able to test products involving non-cash payments, crowdfunding, consumer credit and provide financial advice on pension funds, life insurance and domestic and international securities.

Industry superannuation funds need to adopt digital advice into their offering to retain those members who eventually seek advice elsewhere and inevitably leave their industry fund.

Through digital advice, super funds should begin focusing on what Cheung terms as “incremental advice”.

Instead of providing just intra-fund and single-issue advice, super funds should provide members with the ability to deal with cashflow, debt management, or protection and insurance needs, as needed.

India

Fintech Valley Vizag and Knowledge Partner KPMG Announce Finackathon 2017 (BW Disrupt), Rated: AAA

HackerEarth, a leader in innovation and talent management software, has been selected by Fintech Valley Vizag – a Government of Andhra Pradesh initiative, to host Finackathon 2017.

The hackathon will be held in two stages. The idea phase which began on September 14th is currently underway with entries set to close on October 30th. The shortlisted teams will participate in the final round to be conducted in the first week of December in Visakhapatnam. The winning teams in each category (Banks, Insurance, Capital Markets, and NBFCs) will be awarded a sum of INR 3,00,000. The winners will also be given a chance to carry out Proof of Concept (PoC) with corporates and will need to be executed in Fintech Valley Vizag. Investor network of The Fintech Valley, Vizag will be invited for Hack Day, where they will go through the prototyped solution.

The hackathon is looking for solutions across the following 5 themes:

  1. Customer Experience
  2. Process Automation
  3. Financial Inclusion
  4. Risk Management
  5. Lending
MENA

Betterpaydayloansonline.com Now Allows Getting Quick Payday Loans (MENAFN), Rated: B

Betterpaydayloansonline.com is a web-based service, which makes it possible to get quick, safe and convenient payday loans with no hassle at all.

Canada

LENDING LOOP HITS MILESTONE OF PROVIDING $ 10 MILLION IN FINANCING (Betakit), Rated: AAA

Lending Loop, a Canadian P2P lending platform, has officially provided financing of more than $10 million across the country.

The company says it has supported the expansion of over 180 small businesses through a system that allows investors to reach out to small businesses on Lending Loop’s digital marketplace.

Lending Loop’s investment model moves away from institutional or accredited investors; Canadians can even invest $50 into a pool of larger loans.

A new service is helping employers reduce turnover by paying their employees by the day (The Washington Post), Rated: A

Restaurant News reports that hourly employees can use a smartphone app to access money for hours worked and have it deposited on a debit card. The amount is limited to 50 percent of what’s earned and–to discourage impulse buying–employees only have an hour after their shift to access the money. There’s no fee for the worker, but businesses pay Instant Financial $1 per active user per month.

Barha is aiming to put a dent into the burgeoning payday loan industry, which was used by approximately 12 million Americans in 2015. His service is also being looked at as a potential recruiting and motivation tool by employers, particularly in — but not limited to — the retail and restaurant industries.

According to a recent USA Today report, almost 150,000 employees at more than 50 companies like McDonalds, Outback Steakhouse and Dunkin’ Donuts as well as other restaurants and retailers, trucking companies and staffing firms have access to the service.

GDS Link Joins Canadian Lenders Association to Support Innovative Lending; Sponsoring Canadian Lenders Summit (PRWeb), Rated: B

GDS Link, a global provider of risk management solutions and consulting for multiple verticals within the financial services industry including marketplace lending, retail finance, alternative financial services, credit card, auto, and business lending and leasing, today announced that it has joined the Canadian Lenders Association (CLA) as an affiliate member and will be sponsoring the Canadian Lenders Summit.

GDS Link is sponsoring the Canadian Lenders Summit, which has partnered with the CLA. The inaugural event will take place on October 26, 2017 in Toronto, Canada. Representing GDS Link is Rich Alterman, EVP of Business Development.

Latin America

Brazilian fintech Nubank offers accounts for transfers, payments (Reuters), Rated: AAA

Brazilian startup Nubank said on Tuesday it would expand from credit cards into digital accounts allowing users to make transfers, pay bills and earn more interest than average savings account, beefing up its challenge to traditional banks.

Tech-savvy millennials have been the core demographic for Nubank’s credit card, but Velez said he hoped new accounts would serve some of the roughly 60 million Brazilians – around 30 percent of the population – who do not have a bank account.

Venture capital firms including Sequoia Capital, Kaszek Ventures, Tiger Global Management and DST Global have invested $179 million in Nubank since 2013, giving it a value of $500 million in early 2016 that made it the largest Brazilian fintech startup.

Authors:

George Popescu
Allen Taylor

Thursday August 24 2017, Daily News Digest

corporate bond credit spreads

News Comments Today’s main news: Walmart getting closer to a deal with Afffirm. AutoFi raises $10M. Zopa reports diminishing losses, rising revenues for 2016. Landbay closes 2.4M GBP round on Seedrs. USAmeriBank goes live on Finastra. Today’s main analysis: After shallow sell-off, corporate credit spreads stabilize. Today’s thought-provoking articles: A call for more considered critiques of P2P lending. What’s behind […]

corporate bond credit spreads

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

News Summary

United States

Walmart reportedly closes in on pilot deal to offer Affirm loans (Retail Dive), Rated: AAA

Walmart reportedly is closing in on an agreement with loan services startup Affirm for a pilot program under which Affirm would offer the retailer’s customers installment loans for purchases, sources familiar with the matter told The Wall Street Journal.The pilot could start as early as this fall.

Why are retailers so enamored with Affirm? Giving customers the option to take out an installment loan to finance a purchase gives customers more choices, making it more likely that they actually will make the purchase. Millenials and other younger demographioc consumers are often loathe to carry mountains of personal debt that way previous generations have.

However, it also has to do with the inflexible and sometimes excessive terms of store credit cards, which generally charge higher interest rates than the lowest portion of Affirm’s rate range. Still interest revenue and late fees from store cred cards contribute a significant amount of money to retailers’ bottom lines, making it difficult for them to commit to giving their customers more financing choices.

Overall though, retailers, banks and credit card companies are all starting to understand that at a time of massive change in how and where people shop, they need to make it easier for shoppers to close the deal. Mastercard may recognize this as well as Walmart does. The card network aligned with Verifone late last year to begin offering instant installment financing at the point of sale.

You can now buy 0 pants with a subprime loan (The Outline), Rated: A

Affirm may be a relatively new company, but the service it offers isn’t particularly innovative: It’s taking the concept of layaway, a type of no-interest payment plan that became popular during the Great Depression that lets you pay for things in fixed installments and take them home once you’ve paid for it in full, and twisting it for millennials.  Unlike layaway, Affirm delivers your purchases instantly — but the cost of instant gratification is interest rates as high as 30 percent.  The service is basically a cross between credit cards and layaway, combining the worst aspects of both.

Once your Affirm loan is approved, you can choose to pay it off in 3, 6, or 12 months, and interest rates range from 10 to 30 percent. The average customer takes out a $750 loan with a 21-percent interest rate and pays it back in nine months. Compared to credit cards, which have an average APR of 17 percent, and personal loans that typically have interest rates ranging from 5 to 36 percent, Affirm isn’t a particularly good deal.


Wal-Mart Stores To Exacerbate Synchrony Financial Woes With Affirm Deal (Baystreet), Rated: A

Affirm and Walmart have been in discussion about the possibility of teaming up since last year. Talks appear to have picked pace this year as the retailer continues to explore ways of giving customers access to a wide range of financing options to boost sales and shrug off competition posed by e-commerce platforms.

However, the move would also spell trouble for Synchrony Financial (NYSE:SYF) which is the retailer’s exclusive U.S card issuer.

The fact that Affirm offers loans could significantly reduce the number of people who apply for Synchrony credit cards.

After shallow sell-off, corporate credit spreads stabilize (Morningstar), Rated: AAA

Credit spreads in the corporate bond market stabilized last week after a brief sell-off the prior week pushed spreads higher. The average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade bond market) tightened 2 basis points to +113, and the average credit spread of the BankAmerica Merrill Lynch High Yield Master Index tightened 2 basis points to +398.

Earlier this month, British American Tobacco (BBB, stable) decided to issue $17.25 billion worth of bonds to fund its acquisition of Reynolds Tobacco. This transaction is the second-largest corporate bond deal Page 3 of 22 Morningstar Corporate Credit Research Highlights | 21 August 2017 | See Important Disclosures at the end of this report. Page 3 of 22 Page 3 of 22 Page 3 of 22 Page 3 of 22 Page 3 of 22 Page 3 of 22 Page 3 of 22 issued this year, surpassed only by AT&T’s (BBB/UR-) $22.5 billion transaction, which itself was the third-largest corporate bond deal in history. The proceeds from the AT&T transaction will be used as the final installment for the permanent financing of its pending acquisition of Time Warner (rating: BBB+/UR-). In addition, McCormick & Co. (A+/UR-) had issued $2.5 billion of new bonds two weeks ago to finance its acquisition of Reckitt Benckiser’s food division.

Through the week ended Wednesday, Aug. 16, investors pulled $2.3 billion of assets out of the highyield market. Among the open-end funds, investors withdrew $1.0 billion of funds, and across the highyield exchange-traded funds, there was $1.3 billion of net units redeemed.

AutoFi Raises $ 10 Million Series A To Make It Easier To Get A Car Loan (Forbes), Rated: AAA

AutoFi has raised $10 million in its quest to make it easier to take out a car loan.

The San Francisco-based financial technology company said on Thursday it has completed a Series A funding round, with investors including Crosslink Capital, Ford Motor Credit Company and Lerer Hippeau Ventures.

AutoFi makes a white-label technology platform that allows car dealers to offer faster, online financing to customers. It recently partnered with Ford Motor Credit and is in the midst of launching at select Ford and Lincoln dealerships.

How TD Ameritrade tackles security in Facebook Messenger chatbot (Financial-Planning), Rated: A

A common refrain in financial services these days is that companies need to go where customers are, not wait for people to come to a banking app or brokerage website.

TD Ameritrade is following that advice with a Facebook Messenger chatbot that will give customers instant updates on their portfolios and trades. The bot, unveiled Tuesday, will require the unit of Toronto-Dominion Bank to work through the privacy and security issues financial firms face whenever they communicate with customers via third-party platforms such as Messenger and Amazon’s Alexa.

The Future of Simple (Simple.com), Rated: A

Over the last few years, we have been focused on rebuilding Simple’s technology on our new partner bank, Compass. Our focus on infrastructure and supporting customer growth means we haven’t been fully invested in building new technology that helps people feel confident that they’re doing money right. We have not made good on our promise to change an industry that is failing them.

We have been focused on growth instead of innovation. We have been acting like a bank instead of a technology company. And that changes today.

Today, we are recommitting to being a technology company that is completely focused on product. We are re-designing our team so that everything we do is in support of this focus. We will be ruthlessly dedicated to identifying customer problems and building products that solve them.

SuperMoney’s Auto Loan Offer Engine Will Change the Way You Buy A Car (Supermoney), Rated: A

After debuting its personal loan offer engine at Finovate in April 2017, SuperMoney today unveiled an automotive focused loan offer engine where its lending partners compete in real-time with customized auto loan offers.

The new auto loan offer engine allows borrowers to submit a single, easy, online application and receive multiple auto loan offers back. The tool makes apples to apples comparisons easy when shopping for the best auto financing rates, fees, and terms.

Only 31.6% of car buyers negotiate the interest rate on their loan

A recent survey by the Federal Reserve reported that 76.1% of car buyers negotiated the purchase price with the seller, but only 31.6% negotiated the interest rate on their loan. It gets worse. 27.1% of car buyers considered the monthly payment on their auto loan as the most important factor, but only 6.1% considered the interest rate on the loan as the most important factor (source).

 

 

Lending as a service (LaaS) and why it matters (CIO), Rated: A

Banks today are turning away more loan applicants than in recent memory thanks to stricter regulations and lingering memories of the recent financial crisis. Younger entrepreneurs who have little or no credit history often find themselves rejected from these financing options.

Even when they are accepted, the loan process can be arduous and needlessly complicated, taking longer than business owners can afford. Applications take several visits to the bank, credit checks, records requests and weeks’ worth of back-and-forth communications just to reach the underwriting phase.

The major catalyst for this new lending paradigm has been the rapid pace of online technology innovation over the last decade. Improvements in cloud infrastructure and artificial intelligence systems enable fintech companies to create reliable evaluation and matching systems for loans. Companies can now examine a potential borrower’s financial records in minutes instead of weeks. Thanks to this compressed timeline, approval can now happen in as little as one day.

Instead of multiple meetings with bank lenders over the course of many weeks to compare options, users can often be approved in under a day by a reputable LaaS company.

LaaS platforms such as Ezbob promise to approve a business loan for companies and deliver funds in under thirty minutes. The company’s algorithm examines more than credit scores, evaluating company financials and records to quickly distribute capital to those that require it most.

New Report on Fintech from the World Economic Forum (Lend Academy), Rated: A

Today, the World Economic Forum released a report titled, Beyond Fintech: A Pragmatic Assessment Of Disruptive Potential In Financial Services, that was the result of those and many other discussions they had with leaders from around the world. The report aims to answer the question about whether fintech companies will really change the financial landscape.

Below are some of the key findings from the report:

  • Fintech start-ups have so far fallen short of their ambitions to upend the competitive landscape in finance, driving innovation but struggling to capture market share in mature markets.
  • What fintechs have done is define the direction and speed of innovation across most areas of financial services; they have also set new and higher bars for user experience.
  • Large technology firms like Amazon and Google may represent the largest competitive threat to financial institutions, as their AI and cloud computing services become more central to the sector, and customer data rises in importance.
  • Models of financial services innovation around the world are diverging, benefitting local firms and making it harder to co-ordinate a regulatory response.

Douugh Rises to Challenge with AI-Powered Banking (Paybefore), Rated: A

Banking challenger Douugh has unveiled its artificial intelligence (AI)-powered financial platform, guided by “Sophie”—a 24/7 personal assistant for finances, reports Paybefore sister publication Banking Technology.

Douugh plans to use Sophie to help consumers make better financial decisions by:

  • Connecting a user’s existing bank accounts and credit cards, Sophie will collate, organize and inform on spending habits all in one place;
  • Using Sophie as their own personal banker to perform transactional tasks—such as paying and splitting bills, requesting money, saving, tracking and management of spending and savings goals;
  • Integrating with Alexa and Siri for voice activation.

Rebundling financial services is aspiration of startup Douugh (American Banker), Rated: A

“You are 0% of the way to your retirement goal! You have plenty of time, keep up the good work.”

This message I recently received from the Wela app reminded me to kick my retirement saving efforts into gear. It’s an example of the kind of personalized financial advice many banks and fintechs are trying to provide right now, often with artificial intelligence engines analyzing customers’ account data, predicting future trends and making recommendations.

Based in San Francisco, Douugh strives to use artificial intelligence to help the 25-to-35-year-old set reduce their credit card and student loan debt and make better spending and saving decisions.

Ripple- Just As Good If Not Better (Investing.com), Rated: A

If you could buy a wristwatch that is the same quality as a Rolex or a Cartier for $350, would you wear it?

A company called Filippo Loreti aims to deliver just that. The level of support that the young company is receiving from alternative investors is truly inspiring.

Thanks to the power of the Internet this watchmaker has already raised $6 million in two rounds of funding making it one of the most successful crowdfunding projects in history.

Smart Solutions for Smart Cities (JD Supra), Rated: B

Property “consumers” will be able to compare real-time information on a wide range of variables affecting property assets – for example, energy efficiency, connectivity and traffic noise.  Banks will no longer be the only source of funds, with fast availability of internet peer-to-peer lending speeding up the time taken to put a deal together.

Blockchain or distributed ledger technology raises a number of opportunities in this field, from mortgage valuations, to rental and service charge payment systems. Smart contracts will replace the traditional approach to conveyancing – the main incentives being that the technology will expedite the process, reduce fraud and offer total transparency.

SCORE: Dos and don’ts for crowdfunding small businesses (PostBulletin), Rated: B

To help make a rewards-based crowdfunding effort successful, Dargie offers these dos and don’ts:

Do:

  • Understand the differences between rewards-based crowdfunding, equity crowdfunding and peer-to-peer lending.
  • Pick the right platform for your rewards-based campaign.
  • Follow through on your promises. Watchdog groups and state and federal consumer protection bureaus have begun to shift their attention to deceptive crowdfunding campaigns.

Don’t:

  • Fail to manage the expectations of your campaign’s backers.
  • Launch a campaign without the liability protection of a properly formed business entity.
  • Forget about taxes.

“When We Decided to Sell the Company, it Became Apparent that RealtyShares Was the Right Choice” (Crowdfund Insider), Rated: B

Last month, Real estate crowdfunding platform RealtyShares announced it acquired technology-first, marketplace platform Acquire Real Estate.

Now, less than 30-days later, Director of Business Development at RealtyShares and former CEO of Acquire, Josh Klimkiewicz, is sharing more details about the acquisition.

“The mission doesn’t end here. I will join the RealtyShares team as the director of commercial business development to lead that channel as RealtyShares continues to scale. In my new role, I will concentrate on building long-term relationships between RealtyShares and real estate owners across the country.”

Wealth Management vs. Financial Advice: They’re Not the Same (Kiplinger), Rated: B

Wealth management is one of the terms that is most overused, and it’s often misunderstood. But it’s actually pretty straightforward. Wealth management takes things up a notch, with an adviser or advisory team providing a full range of services for the client in three distinct ways.

  1. Investment consulting
  2. Advanced planning
    • Wealth enhancement: This is the use of strategies to deal with cash-flow issues and liquidity concerns, mitigate taxes and maximize growth.
    • Wealth transfer: Advisers look for the most efficient ways to pass your wealth on to your heirs in a way that lets your beneficiaries keep most or all of the money.
    • Wealth protection: For those who are subject to a lot of liabilities, there are strategies that can help protect hard-earned savings and avoid any blind spots.
    • Charitable giving: With proper planning, donating to a charity or charities can be a win-win, maximizing support for a favorite cause while making the most of certain tax advantages.
  3. Relationship management

How to Win an Argument (Mental Floss), Rated: B

To persuasively drive your point home, follow the tips below, provided by online lender CashNetUSA’s SavingSpot blog and spotted by Entrepreneur.

United Kingdom

Zopa Reports Diminishing Loss as Revenues Rise for 2016 (Crowdfund Insider), Rated: AAA

Zopa, the first peer to peer lender to set up shop in the UK, has filed its annual accounts for 2016, and according to their numbers business is looking better.

Top line revenue improved by 61% jumping to £33.2 million for 2016. The operating loss stood at £5.9 million for the year, an improvement over the £8.9 million from year prior.

A call for more considered critiques of P2P lending (AltFi), Rated: AAA

Between RateSetter’s wholesale lending saga and subsequent withdrawal from the Peer-to-Peer Finance Association, Zopa’s heightened loss expectations, and Funding Circlesignalling an end to manual investment, industry detractors are hardly short of fuel for their fires.

And yet we continue to endure spurious headlines that seem to be born of a broad desire to bash P2P, on the basis of seemingly anything.

Anyway. The latest episode of this kind comes courtesy of The Financial Times, which reported on Monday that peer-to-peer lending websites are “struggling to attract UK customers who want to borrow money”.

Source: AltFi

Landbay Closes £2.4M Crowdfunding Round on Seedrs (Finsmes), Rated: AAA

Landbay, a London, UK-based buy-to-let mortgage lender, has closed a £2.4m crowdfunding round.

The funds were raised via Seedrs.

The company, which has raised approx. £7m to date via the crowdfunding platform, intends to use the funds to continue to expand operations and launch new products.

IFAs still most influential source of financial advice (P2P Finance News), Rated: A

INDEPENDENT financial advisers (IFAs) are the most trusted source of external investment advice, but investors are still more likely to trust their own judgement, new research claims.

A survey by property finance firm Minerva Lending found that almost three quarters (72 per cent) of active investors prefer to take the advice of an IFA. However, the vast majority of active investors (77 per cent) said that they would rather trust their own judgement. Three in five (60 per cent) said that they would be more likely to trust word of mouth.

The survey also found that investors still prefer traditional investment advice over newer fintech solutions. Only 12 per cent of the investors surveyed said that they would trust a robo-adviser to offer financial guidance, and just 22 per cent would trust a standalone piece of software.

Should more banks form partnerships with alternative lenders? (Bridging and Commercial), Rated: A

More banks should be forming partnerships with alternative lenders, one business finance provider has stated.

In the bank referral scheme, the UK’s biggest banks pass on the details of SMEs that have been turned down for loans to three SME finance platforms, which then share their details with alternative finance providers.

Almost £4m of funding was accessed by 230 SMEs under the matchmaking scheme.

Chirag Shah, CEO of Nucleus Commercial Finance, felt there were clear benefits to the collaboration between banks and alternative lenders, but also urged for transparency.

Debunking the peer-to-peer lending myths (City A.M.), Rated: A

So let’s look at some of the common arguments raised and try to filter out the fact from the fiction.

P2P will suffer in an economic downturn

Yet the oldest UK platform Zopa – which launched in 2005 – managed to survive during the financial collapse of 2008.

Admittedly the default rates jumped to 4.2 per cent from 0.4 per cent the year before, but figures from Zopa show that investors were still able to earn a four per cent annual return during the financial crash, compared to six per cent in 2007.

P2P platform Landbay commissioned an independent report in 2015 to find out how it would perform in poor economic conditions.

While the loss rate on Landbay’s loans is 0.03 per cent in normal economic conditions, the loss rate was estimated to hit 0.48 per cent if times got tough – that is, if GDP was down 3.5 per cent, unemployment rose to nine per cent, and UK house prices fell by 20 per cent. So even if the economy shrinks, investors would not have lost money.

An interest rate rise will kill the P2P industry

But Lucy Bott, head of customer operations at RateSetter, points out that interest rates on P2P platforms are not set by the banks, but by the supply of and demand for money.

P2P is for young people

He points to a report from Nesta, which found that more than half of P2P lending investors are aged 55 and over, while a third of lenders are aged 35 to 54, and just 12 per cent of investors are under 35.

P2P Lending Sites Not Quite Wooing UK Customers (PYMNTS), Rated: A

Among 1,100 British consumers polled by consultancy firm EY, only 7 percent indicated they had used such a service to borrow money this year. A separate poll of 1,050 Brits by Blumberg Capital revealed just 4 percent of them had utilized alternative lending platforms over the previous year, according to the Financial Times.

Where FinTech firms worldwide attracted $20 billion in investments over the first half of 2016, that number dropped to just $12 billion during the first six months of 2017.

The lower funding amounts could be attributed to banks having joined the peer-to-peer lending landscape, creating their own technologies or joining forces with startups to stay current, thus broadening the competitive field.

China

Fintech in China: What’s Behind the Boom? (Brink News), Rated: AAA

The country makes some of the world’s largest investments in the sector, and it has adopted fintech technologies faster than anywhere else. Companies such as Alipay, Lufax and ZhongAn Insurance have made their names across the globe by using fintech to develop some of the most disruptive business models. These players have enjoyed the fruits of fintech’s unprecedented growth by filling the gaps in China’s structurally imbalanced financial system in an open regulatory environment.

We believe the development of fintech in China has reached an inflection point. From this point, technology will be the key driver of value-chain disruption in an increasingly data-driven industry.

For example, it took four years for peer-to-peer transaction volume to exceed $5 billion in the U.S., while it took only two years in China. Lufax, a Chinese peer-to-peer lending platform founded in 2011, reached an annual loan origination amount of 9 billion yuan in just two years, compared to five years for Lending Club, the biggest peer-to-peer lending company in the U.S.

A global block chain summit was spot inspected, caused shock on ICO market (Xing Ping She), Rated: A

Recently, the Market Supervision Bureau of Shanghai Pudong New District has raided a global block chain summit that is suspected of false propaganda. According to the investigation, 35 companies set up booth to promote technology and financial products on the spot, and nearly 2,000 people attended the summit. The organizer is a Shanghai-based software technology company. The company referred to “bitcoin” technology and has developed a digital cryptocurrency ETP (entropy) on its own, which was traded on its platform.

On the spot, Law enforcement officials ordered the meeting to be halted immediately and interviewed with the parties involved. And in the same day, this news triggered a nearly 200% shock in the value of related tokens on some trading platforms, reflecting the growing risk of the ICO market. Now the company is still under investigation for alleged violations.

European Union

Klarna co-founder seeks to spur European tech giving (Financial Times), Rated: AAA

In the US, technology magnates from Microsoft’s Bill Gates to Facebook’s Mark Zuckerberg have started a long line of high-profile, high-minded initiatives often aimed at combating disease and helping the poor.

But in Europe, where many of the unicorns — start-ups valued at more than $1bn — are of a more recent vintage, many founders are still thinking of how to make money rather than spend it.

Two years ago, Mr Adalberth had become bored with what he describes as “the constant chasing of the next goal or achievement” at Klarna. So he stepped aside from the group and its relentless attempt to conquer the digital payment world by becoming a bank and attracting Visa in as an investor.

Instead, Mr Adalberth became one of the first of the recent crop of European tech founders to think about giving away money. The result is Norrsken Foundation, which has a triple-pronged approach aimed at encouraging social entrepreneurship. His venture is risky but is likely to be closely watched by the growing ranks of multi-millionaire European founders to see if it can provide some kind of blueprint. “There is a trend in the US to give something back. This trend has come to Sweden and maybe Europe as well,” he says.

Rabobank constructs physical model to understand IT architecture (Finextra), Rated: A

Rabobank has built a 3D model of its own organisation and supporting IT systems to help visualise improvements that can be made as it embarks on its digital transformation programme.

As a banking co-operative operating at both local and regional levels, the Dutch bank runs a complex network of independent IT platforms often performing the same functions depending on local practices.

International

USAmeriBank live on Finastra hosted payments hub (Finextra), Rated: AAA

USAmeriBank selected Finastra’s hosted solution in order to have the flexibility to quickly add new payments rails and services, future-proofing its technology investment, while improving customer service and increasing straight-through processing.

In addition to quick time-to-market and ease of implementation, another benefit of using a hosted solution is a reduction of maintenance effort and total cost of ownership, as the technology and business services are maintained by Finastra.

In the coming months, the bank plans to add US ACH, and eventually real-time payments components, completing the bank’s journey to a fully-outsourced payment processing model.

AI Is the New UI – Exclusive Interview With Jake Tyler, CEO of Finn.AI (Let’s Talk Payments), Rated: A

 

LTP: Give us a high-level paragraph pitch for your company.

JT: The Finn Virtual Banking Assistant is a personal banking and financial management assistant, powered by artificial intelligence.

Finn delivers a personal banker within a customer’s favorite channels, including Facebook Messenger, Amazon Alexa, Google Assistant, SMS, iOS and Android apps, and web chat. We believe that AI is the new UI.

LTP: In a sentence or two, what specific problems are you solving today?

JT: We help banks connect with customers where they already are (in major instant messaging and voice platforms), adapt to a new paradigm of consumer expectations set by Apple, Amazon, Google and Facebook where deep personalization and simple conversational interfaces are the norm, and reduce costs by augmenting human customer care agents with AI.

LTP: What are the biggest challenges you face when building with AI and ML, being nascent technologies? How have you overcome, or are you overcoming, those challenges?

JT: The biggest challenge is data, both quantity and quality. We address this by going deep in one core vertical – banking. We have a large, pre-existing data model in this domain that grows daily as consumers use our assistant. As new banks adopt Finn they are able to leverage this data model to deploy a high-quality assistant with proven features much faster than they would otherwise be able to do.

India

RBI to harmonise NBFC regulations (India Times), Rated: AAA

There is scope for harmonisation of regulations covering non-banking financial companies (NBFCs) and the Reserve Bank is moving in that direction, Deputy Governor N S Vishwanathan said today.

He also said there is a need to create some new types of NBFCs to cater to the needs of the growing economy.

Guernsey consultation to update regs governing ‘non-regulated’ financial businesses (International Investment), Rated: A

The 103-page Lending, Credit & Finance Consultation Paper  is aimed jointly at enabling Guernsey to accommodate the growing number of “innovative, often digitally-enabled, financial services which don’t neatly fit into the boxes marked banking, insurance, investment or fiduciary covered by current laws”, as well as to better protect Guernsey consumers and investors, “particularly those who are less financially able, from unscrupulous lending practises”, the GFSC says, in a summary of the LC&FCP‘s contents.

The proposed legislation would replace this existing NRFSB Law.

To read and download the consultation paper, click here.

Asia

He also said there is a need to create some new types of NBFCs to cater to the needs of the growing economy.

Read more at:

The future of banking in Southeast Asia is in Cryptocurrency (Hero Email), Rated: B

There are an estimated two (2) billion people in the world who remain unbanked and underbanked. That’s roughly a quarter of the entire planet’s population who have little to no direct access to financial services most commonly found in banks and formal lending institutions.

In Southeast Asia, approximately only twenty-seven (27%) of the entire region are financially included, leaving the rest with little to no defense in times of economic crises.

Hero will build a blockchain-based credit algorithm and lending platform. Hero will be launching its own cryptocurrency coin called Hero Token through an upcoming token sale.

The majority of populations who suffer from financial exclusion live in emerging countries such as the Philippines, Indonesia and their neighbors in Southeast Asia. A notable fact about this region [SEA] is that it is the fastest growing Internet region in the world and is also the fourth largest.

Backed by an award winning group of experts, the organization started operating in the Philippines in 2015 as PawnHero, offering collateralized loans using an online platform, and since then has been helping thousands of Filipinos obtain access to affordable credit.

There will also be a ‘pre-sale’ wherein people can buy tokens prior to the actual token sale and get bonuses. During the pre-sale, Hero will offer 80% of all tokens to be created for purchase by the public in the Hero Initial Coin Offering under the ticker symbol Hero. The remaining 20% of all Hero tokens will be distributed to early believers, advisors and founders.

To participate in the Hero token sale people can send the following currencies – Ethereum (ETH), ETH Classic, BitCoin (BTC), Ripple, LiteCoin, and Waves from a wallet they directly control to the Hero wallet. Aside from these, extra tokens will be offered to those who commit early. Bounties are provided when the crowdsale ends. All payments received for Hero tokens in connection with this token sale will be held in escrow in a multi-signature address, with a multi-key structure.

For more information go to .

Authors:

George Popescu
Allen Taylor