Thursday September 19 2019, Weekly News Digest

MAS Singapore

News Comments Today’s main news: SoFi to get its name on a football stadium. Petal raises $300M. Funding Circle closing in on 1-year anniversary of float. Zopa sends warning of imitation scams. Cumulative UK alt lending hits 11.3B GBP. Companies to get social credit in China. Today’s main analysis: Student loan refinancing rates are down. […]

The post Thursday September 19 2019, Weekly News Digest appeared first on Lending Times.

MAS Singapore

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News Summary

United States

Sundays at SoFi: NFL Stadium in Inglewood Lands a Corporate Name (Commercial Observer), Rated: AAA

Online lender SoFi Lending Corp. has secured the naming rights and a 20-year deal with the Rams and Chargers, according to the Los Angeles Business Journal. The firm agreed to pay around $20 million per year, reports say.

SoFi Stadium, which will be the largest in the NFL, is the centerpiece to the much larger $5-billion Hollywood Park project developed by Rams Owner/Chairman E. Stanley Kroenke. Construction is 75 percent complete, and the stadium is expected to open next summer for other events before the NFL preseason begins in August.

Taylor Swift to Open SoFi Stadium Next Summer (KFI AM 640), Rated: B

The opening of the $2.6 billion SoFi Stadium will happen next summer on July 25th. However it’s not for a Rams or Chargers game. Swift announced that she will play two shows (July 25th and July 26th) at the stadium as a part in her much-anticipated 2020 world tour.

Economy is Top Concern for Small Businesses Ahead of 2020 Election (OnDeck), Rated: AAA

Key Findings from the OnDeck Small Business Survey:

  • Economic concerns arise in several dimensions, including tax policy, job growth, support for small businesses, government spending and the overall economic climate. These issues were cited as the top concerns of more than 33% of those surveyed;
  • Immigration was an issue of interest for 11.3% of small business owners surveyed, ranking second behind the economy as a concern.
  • 57% of small businesses surveyed said they were either ”Very Optimistic” or ”Somewhat Optimistic” about the economic outlook for their businesses;
  • 93% of those surveyed said they plan to vote in the 2020 election.
  • 60% of small business owners surveyed said they already know who they plan to vote for in the 2020 presidential election.

President Donald Trump was the choice of 37% of small businesses surveyed, followed by Joe Biden at 18%. When combined, the top five Democratic candidates were the preference of 44% of respondents.

Student Loan Refinancing Rates Down Sharply (Credible), Rated: AAA

During August:

  • Rates on 10-year fixed-rate loans averaged 4.70%, down 22% from a July 2018 peak of 6.05%
  • Rates on 5-year variable-rate loans averaged 4.03%, down 14% from September

A borrower repaying the average graduate school debt of $84,300 over 10 years at 6.36% interest — the average rate for grad school loans in recent years — could save:

  • $20,927 by refinancing into a 5-year variable rate loan
  • $8,327 by refinancing into a 10-year fixed-rate loan

Credit card start-up Petal raises $ 300 million debt round from Jefferies (CNBC), Rated: AAA

The New York City-based company announced a $300 million debt round from Jefferies on Tuesday, adding to existing venture capital investments from names like Peter Thiel’s Valar Ventures.

Plaid adds credit card data to Liabilities product (Tearsheet), Rated: A

In July, Plaid launched its Liabilities product that gives developers access to real time information about what consumers owe. Expanding beyond student loan data, the company has added support for credit card information, so firms can build better debt management solutions.

GoCardless launches US debit payments solution and opens San Francisco office (TechCrunch), Rated: A

GoCardless, the London fintech that aims to become the one-stop shop globally for businesses that want to let customers pay via recurring bank payments, has launched a U.S. debit solution.

Specifically, GoCardless’  new U.S. product supports debit payments on the ACH (Automated Clearing House) network.

The company has also opened an office across the pond in San Francisco’s financial district, headed up by Andrew Gilboy, general manager, North America, who was previously the company’s chief revenue officer.

Nav Launches New Feature to Help Business Owners Boost Business Credit (PR Newswire), Rated: A

Today Nav, a fintech company that matches business owners with their best financing options for free, announced new offerings to help small business owners boost their business credit scores, giving an easy solution to developing a strong business credit profile that alternative and traditional lenders can trust and finance.

Why would HUD gut its own disparate impact rule? (The Times Weekly), Rated: AAA

Since 2013, the disparate impact rule has objectively examined the effects of business practices with lenders, landlords, insurers, and real estate professionals against the provisions of the 1968 Fair Housing Act. The rule required that first a plaintiff must establish a discriminatory effect in policies and/or practices, before the defendant(s) would bear the responsibility of proving their own practices were nondiscriminatory.

During delivery of Capitol Hill testimony earlier this spring, Nikitra Bailey, an EVP with the Center for Responsible Lending (CRL) also underscored the importance of disparate impact in fair housing.

“Disparate impact analysis encourages creative approaches that both increase effectiveness and inclusion,” testified Bailey. “This process and the value of disparate impact analysis was recently pointed out and endorsed by the largest personal loan company in the country, Lending Club.”

BlueVine Appoints Dosh & PayPal Vet Brad Brodigan As New Chief Commercial Officer (Crowdfund Insider), Rated: A

Online lender BlueVine announced on Wednesday it has appointed Brad Brodigan as its new Chief Commercial Officer. BlueVine reported that through this role, Brodigan will be responsible for overseeing revenue-generating functions including sales, customer service, and partner management.

Money360 Closes $ 170 Million in Commercial Real Estate Loans in July and August (GlobeNewswire), Rated: A

Money360, a technology-enabled direct lender specializing in commercial real estate (CRE) loans, announced today it closed approximately $170 million in loans during July and August. This benchmark brings Money360 close to $500 million in loans closed this year.

Groundfloor Now Allows Real Estate Developers to Gain Pre Approval on Loans (Crowdfund Insider), Rated: A

Groundfloor, a real estate lending and investing platform that allows anyone to participate directly in real estate investments, has launched a new product to make the lending process more easier for real estate investors. Groundfloor now allows certain developers to gain pre-approval on loans with a new program called “QC Maxx.”

ABS East; Stripe’s Lending Arm; Madden Decision (PeerIQ), Rated: A

In financing news, student loan fintech “College Ave” locked down a $300MM securitization and a AAA rating this week. The securitization was co-led by both Barclays and Goldman Sachs. Affirm, led by Max Levchin, is reportedly close to wrapping up a $1.5 Bn debt and equity financing with Thrive Capital and Spark Capital leading.

Stripe is mirroring other payments companies that have since built lending capabilities – notably, Square and PayPal. Stripe believes it can compete in an already crowded small business lending market (OnDeck, Kabbage, Fundera, Funding Circle, etc.) due to its data & channel advantages stemming from its payments business.

Fintech Firm OppLoans Announces Its First Bank-Led Credit Facility (GlobeNewswire), Rated: A

OppLoans, a growing fintech and top rated direct-to-consumer online lending platform, announced today that it has secured its first bank-led asset-backed revolving credit facility. This facility structure will enable OppLoans to further its mission by broadening access to online personal lending products for more middle-income consumers with credit challenges.

Aura Completes Three Social Bond Issuances Totaling 5 million Over Last 4 Months (Yahoo! Finance), Rated: A

M&G Investments and Community Capital Management, a mutual fund that specializes in impact and Community Reinvestment Act (CRA) related investments, have joined with U.S. and international banks to invest $145 million in Aura’s social bonds to finance the origination of affordable, small dollar installment loans to working families in the United States.

Challenger banks insist they’re equal to the task of lending (American Banker), Rated: A

Almost all U.S. challenger banks offer no-fee checking, savings accounts and enhanced personal financial management tools. Now some of the most popular have taken, or are poised to take, their next step: making loans.

Personal loans and credit cards are lucrative but inherently risky, and these young companies — like MoneyLion, Varo and others — will have to prove to regulators, investors and the public that they have the wherewithal to weather downturns in the credit cycle.

Cash-flow data shows promise as predictor of credit risk (American Banker), Rated: A

Melissa Koide, co-founder and CEO of FinRegLab, analyzed loan data from six lenders that use cash-flow data in their underwriting. She shares what she found.

Prevu Raises $ 2 Million in Seed Funding to Grow its Digital Home Buying Platform (Digital Journal), Rated: A

Prevu, a customer-focused digital home buying platform delivering industry-leading efficiency and savings, announced today the closing of its $2 million seed funding round. The round was led by Corigin Ventures, a prominent seed-stage venture capital firm with expertise in the real estate technology and consumer industries as well as a history of backing startups disrupting residential brokerage business models.

Embattled Prodigy Network CEO Rodrigo Niño to step down (The Real Deal), Rated: A

Prodigy Network founder Rodrigo Niño is stepping down from his position as CEO amid mounting financial and legal issues, The Real Deal has learned.

Prodigy, a real estate crowdfunding platform, has faced criticism from investors in recent months over underperforming investment properties and unpaid distributions. On Monday, an investor in one of Prodigy’s newest projects — the 13-story Standard Hotel in Chicago — filed a lawsuit alleging the firm was “insolvent” and had used investments “for purposes other than those relating to the project.”

EquityMultiple Provides Investors with Options to Take Advantage of Unique Tax Benefits (Crowdfund Insider), Rated: A

Opportunity Zones are new, tax-advantaged vehicles for investors to earn more on their money. Created by the Tax Cuts and Jobs Act of 2017, the first qualified opportunity zones (QOZs) first hit the market in early 2018. Designated by state authorities, there are now thousands of QOZs in the US designed to boost development in selected communities. Investors receive a break on capital gains taxes which can be significant. Local officials can spur economic development which leads to more jobs. Online investment platforms immediately saw the opportunity intrinsic to QOZs with multiple platforms now offering investments in developments that benefit from these tax breaks.

Why are your Opportunity Zone Offerings better than some others available on competing investment platforms?

Soren Godbersen: There are a number of firms out there now marketing Opportunity Zone offerings to investors. We’re proud of what we have been able to offer to our investor network and there are a few things about our Opportunity Zone investments that are unique:

How to Recession-Proof Your Investments (U.S. News), Rated: A

AFTER A DECADE OF steady growth, the economic cycle is due for a reversal, with concerns of a recession.

  • Consider other types of investments outside of stocks and bonds.
  • Know that timing the market is difficult.

What to Invest in During a Recession?

Other less correlated assets include the real estate niche. With real estate crowdfunding, hypermarket segmentation is available. Investors can choose their property type and geographic region when investing in real estate. Two real estate crowdfunding platforms for accredited investors are CrowdFund and EquityMultiple. Fundrise and Groundfloor open targeted real estate investing to nonaccredited investors as well.

Litecoin Non-Profit to Hold Undisclosed Treasury Sum with Crypto Lender (CoinDesk), Rated: A

The Litecoin Foundation is putting its capital to work, lending at interest through another cryptocurrency program.

The Foundation has tapped the Celsius Network, a blockchain-based crypto lending program, to become its preferred crypto wallet, Celsius Network CEO Alex Mashinsky told CoinDesk.

As part of the deal, the Foundation will allocate an undisclosed portion of its treasury to the Network. LTC holders can receive up to 10.53% annually back on their crypto holdings and dollar loans as low as 4.95 percent as well.

Fintechs give small business more choice for credit than just banks (PaymentsSource), Rated: AAA

It’s no secret working capital is the lifeblood of all small businesses. It’s the fuel that keeps them running, helps them grow and take on new opportunities.

And yet, so many small businesses struggle with cash flow. In fact, according to a recent study from Intuit QuickBooks, 61% of small businesses have had cash flow issues in the past year.

Source: FIS

Walmart’s New Credit Cards Have One Big Goal: Boost E-Commerce (Bloomberg), Rated: A

In a sign of how much Walmart Inc. is betting on e-commerce, the retailer’s revamped credit-card program with Capital One Financial Corp. offers better rewards for online shopping and checking out with its mobile app.

The new options, which become available Sept. 24 and use Mastercard Inc.’s network, offer 5% cash back for purchases made at Walmart’s website, including groceries. At the chain’s physical stores, shoppers only get that rate for a year and have to check out with Walmart Pay at the cashier. Otherwise, store customers get 2% back.

Finicity Releases New Verification of Income and Employment Solution for Lenders (PR Web), Rated: B

Finicity, a provider of real-time financial data access and insights, announced today the release of its new Verification of Income and Employment (VOIE) solution using patent-pending TXVerify technology that will speed up borrower verifications and further advance the industry shift toward a fully digital experience.

The Finicity VOIE solution digitally extracts a borrower’s pay statement data from the paystub and then cross-verifies that key data with their income transactions from their financial institutions. Enabled by its TXVerify technology, this detailed vetting process creates a real-time picture of an applicant’s income and employment for fast, accurate reports. The solution does this by leveraging the highest value data – direct from banks – along with a scan, photo or PDF of a borrower’s paystubs. This process significantly shifts the current paradigm from a mostly manual process to one that is fully digital, all while reducing fraud and increasing confidence in the underwriting process.

Sallie Krawcheck: Why ‘don’t buy daily coffee’ is terrible advice (CNBC), Rated: B

“Don’t buy daily coffee” is the go-to financial advice. Co-founder and CEO of Ellevest, Sallie Krawcheck, says that advice is misleading and just enjoy your latte.

Ethereum Development Studio ConsenSys Announces Codefi, A New DeFi Software Suite (Crowdfund Insider), Rated: A

ConsenSys founder Joseph Lubin announced at the Ethereal Tel Aviv press conference (on September 15) that his New York-based venture studio is launching a new product, Codefi, for the emerging decentralized finance (DeFi) ecosystem.

Despite not having invested in emerging DeFi platforms, Lubin described P2P lending systems such as Uniswap and MakerDAO as some of the blockchain industry’s most promising projects.

ApplePie Capital Partners with LSQ Funding on A/R Franchise Financing (Monitor Daily), Rated: B

Online lender ApplePie Capital entered into a new strategic partnership with LSQ Funding Group, a technology-enabled provider of accounts receivable financing for small and mid-sized businesses.

United Kingdom

Funding Circle nears one-year anniversary of London float (P2P Finance News), Rated: AAA

The peer-to-peer business lender began conditional dealings on the London Stock Exchange on 28 September before being officially admitted to the bourse on 3 October. It launched with an offer price of 440p per share, giving the firm a valuation of £1.5bn.

However, its market capitalisation as of 17 September has since dropped to £348.7m, with its shares now trading at just over 100p.

Zopa warns over imitation scam firms (P2P Finance News), Rated: AAA

ZOPA has warned over a growing number of scam operators targeting UK customers using the peer-to-peer lender’s name to dupe investors.

They include: asking customers directly for their Zopa login details; claiming to work with companies investing money in Bitcoin or other cryptocurrencies; or working with companies who would ask them to take out a Zopa loan to fund an investment.

Record numbers of investors and borrowers as cumulative lending hits £11.3bn (P2P Finance News), Rated: AAA

MORE than 150,000 lenders were invested in 321,483 loans facilitated by Peer-to-Peer Finance Association (P2PFA) platforms at the end of the second quarter, which the trade body deemed “a record level of involvement in the sector”.

Funding Circle is the largest P2P lender among the P2PFA platform members, having lent out a cumulative total of £5.4bn as of the end of the second quarter. It is followed by Zopa at £4.5bn, with ThinCats in third place with just over £491m.

£814m of new loans were made in the second quarter, compared to £866m in the first three months of 2019.

Monzo halts cash referrals as it hits three million users (AltFi), Rated: A

Monzo has ended its cash incentivised referral system as the firm continues to grow users at a rapid pace.

Monzo now has passed the 3 million ‘users’ number, hitting the milestone late on yesterday and is now onboarding 55,000 people to Monzo every week.

Transferwise Books Its Third Consecutive Year of Profits (Lendit), Rated: A

European fintech company Transferwise has recorded its third year in a row of profits; the company reported its net profit after tax climbed to £10.3 million in the fiscal year ending March 2019, up 66% from the previous year on revenue of £179 million;

Payment provider Klarna appearing at London Fashion Week has everybody talking (MyLondon), Rated: A

UK fashion Designer Henry Holland decided to take things up a notch in Saturdays catwalk show with a T Shirt design in collaboration with Klarna.

Klarna expands partnership with Mothercare (The Paypers), Rated: B

Klarna and Mothercare have announced an extension to their partnership, which will see Klarna’s Pay later, Pay in 3, and Slice it products available online and in-store across the UK.

OakNorth Bank provides £3.7m loan to Clearview Developments (London Loves Property), Rated: A

OakNorth Bank the UK bank powered by OakNorth has provided a £3.7m loan to Clearview Developments for a new residential development in Royal Tunbridge Wells.

Smarterly and OakNorth Bank partner to offer new Notice Cash ISA range to Smarterly customers (Fintech Finance), Rated: B

The product range includes five Cash ISA Notice accounts, exclusive to Smarterly, ranging from 35 days at 1.05% to one year at 1.25%; Customers will not be able to apply for these products with OakNorth directly;

These five Cash ISAs Notice Accounts are:

  • 35 days – 1.05%
  • Three months – 1.10%
  • Six months – 1.15%
  • Nine months – 1.20%
  • One year – 1.25%
China/Hong Kong

Coming Soon: ‘Social Credit’ for Companies, Too (WSJ), Rated: AAA

A key target of China’s coming “social credit” system, which among Westerners usually triggers visions of “1984”-style monitoring of people, is actually misbehaving businesses.

Corporate America needs to prepare.

About 80% of information on the main data-sharing platform relates to companies rather than individuals, according to China consulting…

Hexindai Reports Unaudited First Quarter of Fiscal Year 2020 Financial Results (PR Newswire), Rated: A

First Quarter of Fiscal Year 2020 Operational Highlights

  • Total loan volume facilitated[1] was US$ 28.2 million (RMB192.3 million) during the first quarter of fiscal year 2020, a decrease of 93.5% from the first quarter of fiscal year 2019.
  • Gross billing amount (net of VAT)[2] was US$4.7 million during the first quarter of fiscal year 2020, a decrease of 90.7% from the first quarter of fiscal year 2019.
  • Gross billing ratio (net of VAT)[3] for credit loans was 16.7% during the first quarter of fiscal year 2020, an increase from 11.7% during the first quarter of fiscal year 2019.
  • Number of borrowers[4] was 18,546 during the first quarter of fiscal year 2020, a decrease of 36.0% from the first quarter of fiscal year 2019.
  • Number of investors[5] was 9,534 during the first quarter of fiscal year 2020, a decrease of 85.9% from the first quarter of fiscal year 2019.

First Quarter of Fiscal Year 2020 Unaudited Financial Highlights

  • Net revenue was US$4.9 million during the first quarter of fiscal year 2020, a decrease of 90.5% from the first quarter of fiscal year 2019.
  • Operating costs and expenses were US$12.6 million during the first quarter of fiscal year 2020, a decrease of 18.9% from the first quarter of fiscal year 2019.
  • Net loss was US$7.2 million during the first quarter of fiscal year 2020, compared to net income of US$29.7 million in first quarter of fiscal year 2019.
  • Basic loss per ordinary shares in the first quarter of fiscal year 2020 was US$0.15, compared to basic earnings per ordinary shares (“EPS”) of US$0.62 in first quarter of fiscal year 2019.
  • Diluted loss per ordinary shares in the first quarter of fiscal year 2020 was US$0.15, compared to diluted EPS of US$0.56 in first quarter of fiscal year 2019.
  • Adjusted net loss attributable to Hexindai Inc.’s shareholders (Non-GAAP) in the first quarter of fiscal year 2020 was US$7.0 million, compared to adjusted net income attributable to Hexindai Inc.’s shareholders (Non-GAAP) of US$29.9 million in the first quarter of fiscal year 2019.
  • Adjusted EBIT (Non-GAAP) in the first quarter of fiscal year 2020 was (US$5.8) million, compared to US$36.6 million in the first quarter of fiscal year 2019.

Zhang Yue, senior vice president at CreditEase, discusses the demand for credit in China, write downs in her portfolio, P2P lending, their wealth management business and their expansion plans.

Securing privacy concerns in FinTech in Hong Kong (Lexology), Rated: A

Hong Kong has built a strong environment for fostering innovation and financial technology or FinTech. With its large financial sector and its strategic role with Mainland China and gateway to the rest of Asia and the world, Hong Kong has the potential to take on an important role in being a leader in FinTech. In March 2019, for example, Hong Kong issued its first virtual banking licences, which will likely increase adoption of FinTech in the financial services sector.

Emerging technologies used in Fintech services and operations come in different forms, and include:

  • data analytics that support the operations of financial institutions (for example, credit scoring, loan processing);
  • peer-to-peer (P2P) financing (such as P2P lending and crowdfunding platforms);
  • distributed ledger technology, such as cryptocurrency, bitcoin transactions and smart contract applications, as well as blockchain services to help reduce fraud by keeping provenance data on the blockchain; and
  • financial investments, such as stock trading apps, robo-advisors and algorithmic trading and budgeting apps.
European Union

Binance Announces Phase Five of Crypto Lending Featuring Privacy Coins XMR, ZEC, and DASH (Crypto-Economy), Rated: AAA

Leading cryptocurrency exchange Binance has announced its launch of the fifth phase of its cryptocurrency lending product in which it customers subscribe to an allocation to lend other users their funds for interest rates as high as 15% Apr.

the 15% interest rate was only available to Binance’s native coin lenders in the first phase. On Tuesday, the exchange revealed three coins that will be included in the crypto lending product including only privacy-centric coins Monero [XMR], Zcash [ZEC] and Dash [DASH]. Their annualized interest rates will be a constant 3.5% but the lending period is only two weeks starting from this Friday September 20th through October 4th.

P2P Lender creditshelf to Acquire SME Finance Provider Valendo (Crowdfund Insider), Rated: A

creditshelf Aktiengesellschaft has signed a purchase agreement for the acquisition of all shares in Valendo – part of the finleap Fintech ecosystem.

According to a company release, the purchase price was in the “low seven-digit amount.” Payment will take place in two separate tranches. creditshelf has the option of settling both tranches in the course of two capital increases via a contribution in kind.

International

How MAS propelled Singapore to the top of the class (Euromoney), Rated: AAA

Today, Singapore sits proudly atop the Euromoney Country Risk (ECR) rankings. Based on ECR’s blend of financial and economic data, combined with the views of leading economists, no country in the world today has a stronger financial position.

When MAS said in July 2019 that it planned to issue five new digital banking licences, analysts soon spotted that three of them were wholesale licences, open to banks and non-banks alike.

Winners will be encouraged to lend, using digital means, to small and medium-sized enterprises and other non-retail segments – further evidence that corporate banking will be the next segment to feel the hot breath of disruption on its neck.

Source: Euromoney County Risk

Goldman Leads Trulioo’s $ 70M Raise To Expand Global Digital ID (PYMNTS), Rated: A

Trulioo, the global identity verification provider, has raised $70 million in new funding, eyeing growth in its core digital identification efforts, the company announced Tuesday (Sept. 17).

The company said in a release that the funding includes $60 million in a Series C round that was led by Goldman Sachs Growth Equity. Other participants included Citi VenturesSantander InnoVentures and existing investor American Express Ventures. The remaining $10 million came as unannounced follow-on financing from early investors, including BDC Capital and Blumberg Capital.

Equifax Continues Leadership In Alternative Data With Worldwide Urjanet Partnership (PR Newswire), Rated: A

Equifax Inc. (NYSE: EFX) and Urjanet today announced a global partnership that empowers consumers and businesses to share their payment data from thousands of utility, telecom and cable providers worldwide for a more complete picture of individual payment history, easier identity verification and the potential for better access to credit. This partnership builds on Equifax’s leadership in alternative data, using the Urjanet Utility Data Platform to incorporate consumer-permissioned data into the Equifax differentiated data approach.

5 Reasons Investors Should Consider Tokenized Assets (Benzinga), Rated: A

According to Deloitte, we shouldn’t view DLT as just a new type of “database ” but rather as a new way to organize the security value chain from issuance to custody. But what exactly can be transmitted through this chain?

Fractional ownership – take as much as you want

Digitizing shares makes them highly divisible, meaning that investors can buy very small percentages of tokenized assets.

So long, intermediaries! 

Security tokens have a simpler investment structure and lower fees.

On the way to maximum liquidity

Cherry on top

A security token is basically a digital signature connected with a smart contract responsible for facilitation and verification of ownership rights transactions.

India

Ribbit leads Series B funding in online investment platform Groww (VC Circle), Rated: AAA

Groww, an online investment platform that sells mutual fund products, has raised $21.4 million (Rs 152.5 crore at current exchange rate) in a Series B funding round led by Silicon Valley-based venture capital firm Ribbit Capital.

Groww said existing investors Sequoia India and Y Combinator also participated in the funding round.

RBI looking at how NBFCs, HFCs set their lending rates (livemint), Rated: AAA

The Reserve Bank of India (RBI) is studying how non-bank lenders and home financiers price their loans, close on the heels of directing commercial banks to link their loan rates to external benchmarks.

Source: livemint

RBI restricts access to credit data of consumers (Economic Times), Rated: A

The Reserve Bank of India has ordered commercial banks and non-banking lenders to stop providing unregulated entities access to consumer data held by credit bureaus, dealing a blow to scores of fintech startups that have based their business models on such information.

Source: India Times

RBI not in favour of ‘teaser’ loans, examines rate-setting mechanism of NBFCs, HFCs (CNBCTV18), Rated: B

The banking regulator is not in favour of hybrid loan products or ‘teaser loans’, a senior Reserve Bank of India (RBI) official today clarified. The remark gains significance in the light of State Bank of India chairman Rajnish Kumar’s recent comment that SBI would seek the regulator’s view on whether banks can introduce fixed-cum-floating rate products.

No dearth of demand on credit side, disbursed credit worth INR 5 billion: Flexiloans Co-founder (IBS Intelligence), Rated: A

FlexiLoans.com, an online lender for MSMEs in India, said that it has crossed a milestone number of disbursing over INR 5 billion of unsecured business loans across the country with its unique digital-only model. The Mumbai-based company, which has disbursed over 16000 loans across 1000 cities and towns in the country, says that there is no dearth of demand on the credit side. The company caters primarily to micro, small and medium-sized businesses.

How has the online lending market shaped up in the last few years?

Digital Lending market is currently at about USD 2 billion, up from about USD 1 billion in 2016. Significant traction and market niches discovered by various FinTech startups across the country have made this space very exciting, holistic and game-changing.

Online SME lender Cash Suvidha plans to raise upto $ 10 million (IBS Intelligence), Rated: B

The online lender for business and personal loans, Cash Suvidha, is planning to raise $5 million -$10 million equity funds in the next six months.

Asia

Terafunding Closes US$ 18M Series B Financing Round (FINSMES), Rated: AAA

Terafunding, a Seoul, South Korea-based Peer-to-Peer (P2P) lending platform, raised US$18M in Series B funding.

Backers included KB Investment, Hana Ventures, IBK Industrial Bank and Woomi Construction.

Julo raises $ 10M to expand its P2P lending platform (TechCrunch), Rated: A

Julo, a peer-to-peer lending platform in Indonesia, said on Wednesday it has extended its $5 million Series A raise to $15 million as it looks to scale its business in the key Southeast Asian market.

The $10 million Series A2 round for the Jakarta-headquartered startup was led by Quona Capital,  with Skystar, East Ventures,  Provident, Gobi Partners and Convergence participating.

Chinese P2P Firms Seeks Business in Vietnamese Market (W7 News), Rated: A

The declining demand for peer-to-peer (P2P) lending in China has prompted firms to find business elsewhere. LearnBonds report that Chinese P2P companies are eyeing Vietnam, which alarmed local lending companies.

MENA

Now Money offers alternative for Gulf’s unbanked expats (Financial Times), Rated: AAA

About 70 per cent of the population in the Middle East and north Africa do not have access to banking services, says Ian Dillon, co-founder of Now Money, a Dubai-based financial technology group.

The GCC recorded outbound remittances of $120bn in 2017, according to World Bank data. However, Gulf banks tend to exclude workers earning less than $1,400 a month, leaving most of them reliant on exchange houses to remit cash home.

Authors:

George Popescu
Allen Taylor

The post Thursday September 19 2019, Weekly News Digest appeared first on Lending Times.

Thursday June 29 2017, Daily News Digest

U.S. venture capital exits

News Comments Today’s main news: PayPal invests in LendUp. KBRA upgrades SoFi Consumer Loan Program 2016-1. Revolut spent 7M GBP on incredible sales growth. Today’s main analysis: VCs may face cash crunch as more tech startups stay private longer. Today’s thought-provoking articles: FSB issues report on fintech. Inside Ping An’s massive expansion. Chinese players pursue $3.4T international digital payments opportunity. Auto manufacturers leverage […]

U.S. venture capital exits

News Comments

United States

  • PayPal invests in LendUp. GP:”An outstanding partner to have for LendUp. With a little luck maybe Paypal and LendUp can also partner on customer acquisition.”AT: “I wonder why PayPal isn’t in the top 25 largest Internet companies. They’ve always had such great potential, but they never make the lists. Perhaps they aren’t diversified enough.”
  • KBRA upgrades SoFi Consumer Loan Program 2016-1. GP:”SoFi seems to go from high to even higher. “
  • Venture capitalists may face cash crunch, tech startups stay private longer. GP:”This could also be a hint that the companies private VC-driven valuations are not in line with the general public’s perception of their value”AT: “Not specific to online lending or fintech companies, but there is certainly an application to the alternative lending space. I can’t help but wonder if this is a long-term or shorter-term trend, but it seems to have started in the middle of last year some time.”
  • Global Debt Registry develops blockchain-based proof of concept for online lending. GP:”Slowly but surely we are starting to see the first blockchain applications that make sense.”AT: “There hasn’t been a single public ledger make a breakout, so these kinds of initiatives make me wonder if developments are based on demand or high hopes. I like this particular one, it’s interesting and innovative, but how many online lenders are asking for it?”
  • Home Point Financial grows third-party origination channel.
  • SEC’s robos handling is a big charade. GP:”The workings of a government are often obscure. I would call it politics. Perhaps one shoudl watch House of Cards TV series more often.”
  • Better Mortgage empowers consumers with a better price guarantee. GP:”I am not sure if this was necessary in order to convince people that a simpler and faster application is needed. In fact I usually advise companies not to price cheapest but to price as expensive as they can get away with as long as they provide real value to the users. Cheap has many issues: low margins, no profits, perceived lack of value, etc.”
  • Why Square is the ‘Tesla of payments’. GP:”I personally am not convinced that a Tesla car makes sense economically or practically over a gas or hybrid car at this time. There is a lot of hype and fashion into Tesla. I do have to recognize the Tesla cars look great though. I don’t think there is a hype behind Square, as it offers a really easy solution to accept credit card payments. Setting up credit card payments has always been a nightmare for all small businesses for no aparent reason. I am glad Square solved that.”
  • Which payment app is best? AT: “A pros/cons look at Venmo, Apple, and Zelle.”
  • Veem integrates with Intuit QuickBooks.

United Kingdom

  • Revolut spent 7M GBP last year to fuel growth. GP:”What one needs to look at is not how much money was spent but what was gained and built through that. I am happy with a company spending 100mil GBP if they build 200mil GBP in revenue per year. A ration of spending 7mil for a revenue of 2.3mil is not impressive, however lets see the impact of this spent the following year.”AT: “Customer acquisition costs money. Remember, it took Amazon 10 years to make a profit. Now they’re the largest Internet company on the planet. While Revolut’s sales went up more than 500% in one year, they spent over half of their equity capital to do it. I see another funding round on its way.”
  • Financial Stability Board issues report on fintech.
  • Are alt lenders ready to publish APRs? GP:”Many of them already are publishing APRs on their websites. I am not sure why this is a question. While it is not a requirement I think it’s good practice and the serious ones are publishing it.”
  • Building a bank is not easy. GP:”Nobody ever said building a company , a startup , or a bank was easy. This is why often people with no experience and who don’t know what it takes are better position to take such a project. They are not afraid of what they don’t know and often they even find new solutions and innovate withotu being constrained of the existing established solutions to known problems. Many VCs, because of this reason, invest in inexperienced CEOs seeing it as a strenght. “
  • Hargreaves scraps P2P lending plans.
  • How to save cash, make more using P2P lending.

China

International

European Union

India

Asia

Canada

News Summary

United States

PayPal invests in online lender LendUp (Reuters), Rated: AAA

PayPal Holdings Inc has invested in LendUp, a San Francisco-based startup that offers loans online to consumers who have been traditionally overlooked by banks because they are considered too risky.

LendUp said it had secured a strategic investment from the payments company on Wednesday. It did not disclose terms of the deal. PayPal confirmed in a statement that it had made an investment.

PayPal has been expanding partnerships and acquiring new services to gain advantage over rivals in a highly competitive digital payments market.

KBRA Upgrades the Ratings on SoFi Consumer Loan Program 2016-1 (KBRA Email), Rated: AAA

Kroll Bond Rating Agency (KBRA) upgrades the rating on the Class A notes issued under the SoFi Consumer Loan Program (SCLP 2016-1), a consumer loan ABS transaction which closed on June 27, 2016. The credit enhancement has built for the Class A notes since closing. While cumulative net losses are slightly above KBRA’s initial loss expectations, the transaction has breakeven loss multiples which are sufficient for an upgrade of the Class A rating.

The collateral in the SCLP 2016-1 deal currently includes $382.3 million of loans, as of May 31, 2017. The collateral in the transaction has amortized from the initial pool balance of $506.4 million at closing. The current credit enhancement levels are 31.66% for the Class A notes. Credit enhancement consists of overcollateralization, cash reserves, and excess spread.

Please click on the link below to access the report:

Venture capitalists may face a cash crunch as more technology startups stay private longer (Quartz), Rated: AAA

Private equity research firm Pitchbook reports startup exits—sales or mergers of companies delivering returns to shareholders—has fallen in recent years. The number and value of startup exits were down about 70% last year from their 2014 peak. Despite big IPOs of companies such as Snap, 2017 has yet to yield a bumper crop of new exits as companies stay private longer.

It’s not a new problem, says Scott Jordon, managing director at Glynn Capital, but it’s now more acute. The time it takes for technology firms time to IPO has stretched (pdf) from around five to eight years in 2000 to about 11 years today. Pitchbook’s Nizar Tarhuni says they’re seeing venture firms extend funds or negotiate longer periods than the standard 10 years to return money to their limited partners such as pension funds.

A resurgence in IPOs is still possible. Public investors extended a (mostly) warm welcome to the 11 or so tech companies that have gone public so far this year, including Appian, Carvana, Cloudera, Elevate Credit, Netshoes, Okta, Veritone, and Yext.

Global Debt Registry Develops Blockchain-Based Proof Of Concept For Online Lending (Fin Alternatives), Rated: A

Loan data specialist Global Debt Registry has completed a proof-of-concept that utilizes the blockchain to provide investors with an immutable audit trail and a single source of core loan data.

The firm’s inaugural blockchain proof-of-concept (POC) lays the groundwork for providing investors and senior lenders in the online lending space with a safe and secure way to confirm loan ownership and collateral interests across companies within the ecosystem, GDR said.

In developing the blockchain POC, GDR worked with three leading blockchain platforms – Hyperledger, Ethereum and Chain.

Home Point Financial grows third-party origination channel (Housingwire), Rated: A

Shortly after wrapping up its acquisition of Stonegate Mortgage Corp.Home Point Financial Corp. already announced it’s expanding its third-party origination channel.

The lender plans to increase its wholesale client base by expanding the geographic reach and number of third-party originators the channel will serve.

Home Point finalized its $211 million acquisition of Stonegate Mortgage back at the beginning of the month.

‘Big Charade’ Seen in SEC’s Handling of Robos (Financial Advisor IQ), Rated: A

The rising popularity of robo-advisors is bringing increased scrutiny by regulators. At the same time, industry lawyers say they don’t foresee any substantive changes coming in the form of new rules.

This year for the first time, the SEC put online advice-giving on its list of examination priorities, raising concerns about “heightened risk to investors and/or the integrity of the U.S. capital markets.”

A key issue securities lawyers like Fein raises is that if the SEC insists its current rules adequately apply to robos – yet there seem to be shortcomings in how some robos execute their fiduciary duty – then any perceived enforcement gap will only widen.

But MacKillop, whose startup indie RIA manages about $50 million, scoffs at notions that computer-based investing can live up to the same sort of “best interest” standards for individual clients as brick-and-mortar advisors.

Better Mortgage Empowers Consumers with the Better Price Guarantee (BusinessWire), Rated: A

Better Mortgage officially rolled out the Better Price Guarantee — a promise to all of its borrowers that it will beat any competitor’s loan estimate by $1,000. If not, Better will actually give the borrower $1,000.

Better’s mission is to embolden consumers to confidently shop around while also de-risking one of the largest financial transactions they’ll ever make. According to a report published by Oliver Wyman, 71% of customers only get a loan estimate from one lender, which could mean that many home buyers aren’t actually getting the best price on their mortgage.

How the Better Price Guarantee works:

  • If the customer thinks another lender has a more competitive price, they can send Better the competitor’s Loan Estimate(LE) within three business days from the date on the loan estimate. If Better can’t beat the competitor’s LE by at least $1,000, Better will give the borrower $1,000 in cash when they fund with the other lender.
  • An LE is a standard form that all lenders are required to provide a consumer.
  • Better Mortgage may extend this guarantee to non-standard rate sheets.

Why This FinTech Firm Reminds One Analyst of Tesla (Barron’s Next), Rated: A

What do you call a financial-technology company whose stock is up 75% this year as investors bank on its ability to bring a disruptive product into the mainstream? The “ Tesla of Payments,” apparently.

That’s the way to describe Square, according to Mizuho analyst Thomas McCrohan, who began covering the company on Tuesday. The key question for Square is whether it can scale its business up to serve larger customers, and McCrohan is optimistic about the payment processor’s ability to do so while still making money.

Tesla happens to be up 74% this year. Tesla and Square are the top two performers in the Barron’s Next 50 index.

Which Payment App Is Best for You: Venmo, Apple or ‘Zelle’? (WSJ), Rated: A

Venmo

Pros: Works across several types of mobile devices and bank accounts. Funds can immediately be used to shop with Venmo.

Apple

Pros: Service works with Apple’s iMessage, so users don’t need to download a separate app.

Zelle

Pros: Will work within the apps of the biggest banks such as J.P. Morgan Chase, Bank of America and Wells Fargo. Funds are deposited directly into bank accounts within minutes.

Blockchain Payments Startup Veem Integrates with Intuit QuickBooks (Coindesk), Rated: B

Intuit QuickBooks customers can now send international payments via blockchain payment provider Veem as an alternative to traditional wire transfers.

United Kingdom

Hot foreign exchange app Revolut burned through £7 million fuelling its growth last year (Business Insider), Rated: AAA

London-based Revolut, which offers a pre-paid international currency card, made a pre-tax loss of £7.1 million in 2016, its first full year of operations. Revenue was £2.3 million in the year to December 31, accounts filed with Companies House show.

The loss was largely down to “card scheme costs, acquiring costs, and user acquisition costs,” the company’s directors write in the accounts. In plain English, that means the cost of processing payments done on its cards, and the cost of getting people to sign up for the cards in the first place. The cost of sales jumped from £1.5 million to £7.8 million.

Staff numbers jumped from 7 in 2015 to 32, with staffing costs climbing from just under £300,000 to £1.5 million.

The startup has raised £12.1 million in equity capital to date.

Financial Stability Board Issues Report on Fintech: “Regulators Need to Understand the Impact” (Crowdfund Insider), Rated: AAA

The Financial Stability Board (FSB) has weighed in on the burgeoning Fintech sector of finance. The FSB has been analyzing “financial stability implications” potentially created by Fintech innovation. The FSB says it is specifically seeking to identify “supervisory and regulatory issues that merit authorities’ attention”.

The FSB stated there are currently no compelling financial stability risks from emerging Fintech innovations.

According to the FSB, ten areas of interest have been identified of which the following three are seen as priorities for international collaboration. These three priorities are viewed as “essential” to supporting financial stability “while fostering more inclusive and sustainable finance.” The three priorities are:

  • The need to manage operational risk from third-party service providers;
  • Mitigating cyber risks; and
  • Monitoring macro financial risks that could emerge as Fintech activities increase.

The other areas that merit attention include:

  • Cross-border legal issues and regulatory arrangements.
  • Governance and disclosure frameworks for big data analytics.
  • Assessing the regulatory perimeter and updating it on a timely basis.
  • Shared learning with a diverse set of private sector parties.
  • Further developing open lines of communication across relevant authorities.
  • Building staff capacity in new areas of required expertise.
  • Studying alternative configurations of digital currencies.

Are the UK’s alternative lenders ready to publish APRs? (AltFi), Rated: A

In May of last year, the Competition & Markets Authority (CMA) published its rather hefty “Retail banking market investigation” report. Buried among its “proposed remedies” was a provisional decision to require lenders specialising in unsecured loans and overdrafts of up to £25k for SMEs to use annual percentage rates (APRs) to show the cost of these products. The proposed measure is set to become a reality in August, according to multiple sources. But are the UK’s alternative lenders ready?

The impending APR directive will not affect merchant cash advance firms, such as Liberis, because merchant cash advance is not technically considered lending. Nor will it affect asset-backed finance firms like MarketInvoice.

GrowthStreet is another business lending platform that would be affected by the directive, had it not taken the decision some time ago to publish APRs of its own accord.

One group that will presumably take a keen interest in the upcoming APR directive is the Association of Alternative Business Finance. The trade association, which launched in February, represents ten of the UK’s small business-focused direct lenders.

Building A Bank Is Not Easy (Forbes), Rated: A

UK Challenger banks, like AtomStarlingTandem and Monzo, are building from the ground up to do things differently.

But building a bank is not easy. Sophisticated and diverse product offerings, consumer trust, and security are three vital components. And in this regard, the incumbents often have a head start.

In our portfolio, we have seen AukaPay partnering with Sparebank1 in Norway to provide a white label payments app, MarketInvoice joining forces with BNI Europa to enable SMEs to access more working capital on its platform, Crosslend working with institutions to provide investment opportunities in consumer loans, and iZettle in successful partnership with Santander.

And when talking challenger banks, we can’t forget to mention BBVA’s acquisition of Holvi last year.

While P2P lending still represents a small proportion of total lending volumes, in the UK, origination grew 36% year on year in 2016.

Zopa is approaching bank building from a different base to the other challenger banks, and a case in point of collaboration with the incumbents.

Hargreaves scraps peer-to-peer lending plans (Money Marketing), Rated: A

Hargreaves Lansdown has dropped its plans to set up a peer-to-peer lending platform.

The company, which was expected to launch both a P2P lending platform and a cash management service to clients this year, has now decided it will solely focus on the cash management service.

Hargreaves Lansdown chief executive Chris Hill tells Money Marketing that despite P2P being “interesting”, the firm would rather focus on the new savings proposition because it is “a much bigger market”.

How to save your cash and make some more using P2P lending (Born2Invest), Rated: B

P2P lending seems to be a novel and definitely, profitable investment opportunity. It is becoming more and more popular and so there is a constant boost in the number of lenders who are getting profitable returns from this investment option. Here are a few essential steps for making money from the P2P investment.

Step No.1: P2P investment should be treated as an extra element in the overall financial portfolio

You must do ample research, deliberate and then come to a decision about what all should be included in your financial portfolio. You must possess a diversified and comprehensive financial portfolio. P2P lending seems to be a wonderful addition to this portfolio.

Step No. 2: Set a target and attain it

A profit of 2 percent over a 12-month deposit seems to be realistic. The two percent would be paying for the risk factors including investment in time.

Step No.3: Fortify your financial foundation

In order to make an impressive profit in your P2P investment, you must have a fantastic and truly solid financial foundation. This is certainly not a getting rich fast scheme but eventually, you could expect good returns.

Step No.4: Create a comprehensive system

Create a comprehensive system for investing in borrowers that is based on important information which is available, and is relating to the borrower.

China

Inside Ping An’s Massive Expansion (Institutional Investor), Rated: AAA

Almost 30 years after founding Ping An, Ma is ambitiously broadening his supermarket of financial products, much like U.S. financier Sandy Weill did as chief executive officer of Citigroup from 1998 to 2003.

Ma founded Ping An in 1988 in Shenzhen, the financial hub of southern China, which lies just north of Hong Kong’s border with the mainland. Over the past five years, the company has climbed onto the list of the world’s ten largest insurers, now ranking No. 4 behind France’s AXA, Germany’s Allianz, and U.S.-based MetLife in terms of assets, according to Relbanks.com. Though Ping An’s insurance assets rose 17 percent in 2016, to $802 billion, the company’s double-digit profit growth is benefiting in part from a diverse group of revenue streams, including banking, securities, asset management, wealth management, private equity, and, more recently, China’s booming arena of Internet finance.

Ping An saw 11.7 percent revenue growth, with gross earnings reaching a record high of 774 billion yuan ($112 billion), and a 15 percent growth in profits; net earnings rose to 62 billion yuan. About 56 percent of the group’s profits were derived from insurance, down from more than 80 percent a decade ago. The rest came from banking (20.6 percent), asset management (15.5 percent), and Internet finance (8.3 percent).

Among the company’s most touted technology successes is the 2011 founding of peer-to-peer lender Shanghai Lujiazui International Financial Asset Exchange Co. Lufax, as the company is known, has become an e-commerce giant for finance in China, the world’s second-largest economy. It’s the country’s biggest online marketplace for wealth management products: Last year more than 7.4 million individual and corporate investors used Lufax to purchase 6 trillion yuan worth of investment products from Ping An and thousands of other Chinese financial institutions.

Chinese Players Pursue $ 3.4 Trillion International Digital Payments Opportunity (PR Newswire), Rated: AAA

A new study from Juniper Research highlights the increasing dominance of Chinese companies in digital payments, with players such as Alibaba, Tencent and UnionPay seeking to bolster their revenues through international expansion.

According to the research, Strategies for Payment Providers: Opportunities, Risks & Competition 2017-2021, digital payment transaction values are expected to reach $5 trillion by 2021, up from $3.6 trillion this year, of which $3.4 trillion will come from sales outside mainland China.

The research includes the latest Juniper Leaderboards, highlighting best-in-class players in key payments arenas, including PayPal (for eWallets), Worldpay (for payment service providers) and Vodafone (for telco payments in emerging markets).

The complimentary whitepaper, Who will Own the Digital Payments Sector in 2021?, is available to download from the Juniper website together with further details of the full research and the attendant IFxl (Interactive Forecast Excel).

Hong Kong’s future is in learning new words: fintech, regtech, wealthtech (SCMP), Rated: A

Hong Kong’s role as a global financial hub may be under threat unless the city can embrace technology and adapt quickly to the tectonic changes that have taken place in the financial landscape in the two decade since its return to Chinese rule, experts say.

Hong Kong’s greatest moment of innovation was in 1997 with the Octopus card, a smart-card payment system that is now a ubiquitous part of daily life. Two decades since, the city has not made further progress and has lagged mainland China in exploring new forms of electronic payment such as Tencent Holdings’ WePay or Alibaba Group Holding’s Alipay.

Hong Kong’s existing banking model would change dramatically with the rise of fintech, similar to how Amazon.com revolutionised America’s retail industry, he said.

For Hong Kong to succeed as a fintech hub, regulators should license more companies to handle clients’ money to accelerate innovations in fintech and wealthtech, or the use of technology for wealth management and investing, he said.

“More than 70 of the world’s largest 100 banks are in Hong Kong, and this gives the city a big advantage because in fintech, the majority of the customers are going to be banks,” he said.

As many as 82 per cent of incumbent banks and financial institutions plan to increase partnerships with fintech companies in the next three to five years, according to a fintech survey in Hong Kong by PwC this year.

 

China’s Central Bank Vows to Push for Blockchain in Five-Year Plan (Coindesk), Rated: A

The People’s Bank of China (PBoC) is releasing new details about a forthcoming five-year development plan focused on its strategy for advancing technology use in the country’s domestic financial industry.

According to the announcement by the central bank, the PBoC intends to actively push forward the development of new technologies such as blockchain and AI. It also plans to strengthen its research on applications of fintech in regulation, cloud computing and big data.

Hong Kong Asserts Its FinTech Prowess (Financial Technologies Forum), Rated: B

In fact, the FinTech Association of Hong Kong (FTAHK) had its official launch on June 28, underscoring the point that financial IT innovation is no longer restricted to New York City and its concrete canyons or Silicon Valley in Northern California.

There will be committees taking on key sectors such as:

  • Blockchain/DLT;
  • Artificial intelligence;
  • Big data;
  • Payments;
  • Regulatory tech;
  • and financial literacy.
International

Automotive Manufacturers Leverage Fintech through Partners to Deliver a Differentiated In-vehicle Experience (Cision), Rated: AAA

The thinning margins in the automotive industry are making a strong case for vehicle original equipment manufacturers (OEMs) to explore revenue streams beyond sales and periodic maintenance. As customers become accustomed to digital transactions, OEMs will look to tap the hitherto underutilised fintechservices segment to generate additional revenues. Active partnerships with fintech companies will enable OEMs to offer multiple use cases that enrich in-vehicle experience, which will ultimately influence customers’ purchase decisions.

Fintech in the Global Automotive Industry, Forecast to 2025 is part of Frost & Sullivan’s Automotive & TransportationGrowth Partnership Subscription. The study examines key application areas of fintech in the automotive industry: leasing and finance, insurance, digital retailing, digital payments, and automotive services. Europe, followed by North America, is anticipated to lead in digitising finance, and North America, followed by Europe, in automotive service investments. The average investment in fintech is estimated to grow from $16 million in 2016 to $230 million by 2025with the emergence of digital car retailing and new business models in insurance.

The synergies between automakers and technology companies will power next-generation financial service infrastructure. Even though fintech partnerships with big banks slow down transactions, it is important to note that banks manage almost 32% all new vehicle financing in North America. Besides:

  • The competition for market share between banks and captives finance companies is expected to digitise new car sales and result in a $1 trillion auto financing market; and
  • Fintech will monetise services based on subscription models and on-demand vehicle features.
European Union

Fintonic Closes €25M Funding Round (Finsmes), Rated: A

Fintonic, a Madrid, Spain-based provider of a mobile app to optimize personal finances, closed a €25m round of funding.

Backers included ING Group and insurance group PSN, amongst other investors.

The company intends to use the funds to drive its growth in Spain and LatAm and increase its value proposition.

Luxembourg and Singapore fintech hubs connect (Finextra), Rated: A

The LHoFT, Luxembourg House of Financial Technology, and LATTICE80, the world’s largest Fintech Hub located in Singapore, are excited to have signed a Memorandum of Understanding (“MOU”) at Money 2020 Europe, setting a foundation for collaboration between the two centres.

This Memorandum of Understanding provides a framework to intensify the cooperation between two leading financial centres with a specific focus on Fintech and driving digital transformation in financial services.

Swiss Crowdlending Fintech Opts for Blockchain (Finews), Rated: A

Splendit is a Swiss fintech firm dedicated to broker loans to students paid for by financiers.

The company has decided to link up with Blockchain-fintech Lykke, Splendit said in a statement today.

Thanks to the deal with Lykke, Splendit henceforth will be able to finance foreign students by sending them their loans via the Lykke Wallet. Florian Kuebler, the co-founder of Splendit, says that this will save transaction costs and enable crowdlending across the globe.

Agreement between Willis Towers Watson and Workinvoice to support companies on the commercial credit market (Intermedia Channel), Rated: A

Willis Towers Watson (WTW) and Workinvoice have signed a collaboration agreement exclusively with the aim of bringing more and more Italian companies on the commercial credit market run by the Italian Fintech company.

The Workinvoice activities enable companies ‘ access to a particular market to obtain immediate liquidity, and to protect themselves from payment risks through the sale of its trade receivables to Italian and international institutional investors “ .

India

Rohan Tibrawalla Takes On Country Director-India Role for MPOWER Financing (PRWeb), Rated: B

MPOWER Financing (), an innovative fintech company and provider of educational loans to high-potential, international students, recently appointed Rohan Tibrawalla to the position of Country Director-India to oversee the company’s operations in the region from its soon-to-be-opened office in Bangalore.

In his new position, Tibrawalla is responsible for expanding and executing MPOWER Financing’s operations, marketing and business development strategies as well as for managing the loan portfolio and debt and equity capital sourcing.

MPOWER Financing is a public benefit corporation whose mission is to remove the financial barriers to higher education in the U.S. by providing loans and other resources necessary for students to complete their undergraduate or graduate studies.

Asia

Challenge is to navigate global fintech regulations and scale: Finastra’s Nadeem Syed (Deal Street Asia), Rated: AAA

Nadeem Syed, who heads mega fintech firm Finastra, believes regulators worldwide will need to evolve guidelines for the emerging sector  (fintech) but the challenge for many financial services firms would be to navigate the new environment and also scale services.

What are your plans in Asia Pacific in terms of expansion and growth after the merger and how has the journey been in Asia so far in terms of revenues and capturing markets?

We have long been committed to Asia Pacific and continue to see great opportunity across the region with double-digit growth rates. Developed and growth markets of Asia Pacific are successfully riding the digital wave especially with the tremendous opportunities that lie ahead of us in Indonesia, Myanmar, Thailand and China to name a few.

Misys has over 400 customers that cut across from Japan to Australia and we see tremendous opportunity to leverage our strength in the region to bring the D+H products to market, especially payments and cash.

Over the years, how have you seen Asia’s competitiveness in fintech being transformed? Has that been affected by the rivalry between region’s financial centres – Singapore and Hong Kong?

The financial services landscape, not just in Asia but globally, has seen a lot of regulators becoming more and more receptive to new technologies – distributed ledger technology, artificial intelligence, P2P lending and so on.

The challenge for all financial services companies is to navigate each jurisdiction’s new or upcoming regulations on fintech while translating their various innovations into services that can be scaled up and rolled out in a safe and reliable manner.

What kind of competition do you see from the internet giants like Baidu or Alibaba are fast emerging as fintech players worth noticing. What future do you see for Chinese fintech industry?

China’s internet giants are increasingly looking at fintech as it is a complementary sector that helps create a tighter online ecosystem for their customers. They are mostly focused on personal banking and payments solutions, which means traditional banks need to concentrate on evolving their own digital and online presence.

As the fastest growing region, do you see Asia emerging as a digital champion anytime soon. If yes, what will help to bring it and where are the major challenges?

Many countries in Asia are seeing exponential growth in the number of Internet and mobile device users – this has a direct correlation to the boom in digital or online banking, as well as other services being carried out online. Digital platforms mean that rural populations now have easy access to services previously unavailable to them, but the challenge is always how to ensure these platforms are safe and secure as cyber criminals get more sophisticated.

Fujitsu Starts Sales of Cloud-based Lending and Leasing Services from Cloud Lending Solutions (Fujitsu), Rated: A

Fujitsu today announced it is commencing sales in Japan of cloud-based solutions for lending and leasing businesses. Developed by US-based Cloud Lending Solutions and known as the CL Series, the solutions will be deployed and operated as Software as a Service (SaaS) with the support and operations services of Fujitsu technicians with expertise in financial systems. This is the first time services from Cloud Lending Solutions will be available in Japan.

ALT Corporation, a subsidiary of Yayoi Co., Ltd., Japan’s largest accounting software company, has decided to become the first Japanese customer for these solutions. ALT is using these solutions to set up a unique online lending business, with plans to begin trial lending in October 2017.

With the goal of offering solutions to transform business using Fintech to customers at financial institutions around the world, on July 12, 2016, Fujitsu signed a Memorandum of Understanding (MOU) with Cloud Lending Solutions for a strategic partnership.

The CL Series is a set of cutting-edge cloud services offered as SaaS, which digitize a suite of business processes for lending and leasing businesses, from applications to reviews, contracts and collections.

Canada

WEALTHSIMPLE, TRULIOO AMONG CANADIAN COMPANIES IN CB INSIGHTS FINTECH 250 (Betakit), Rated: A

Canadian FinTechs that made the list include Wealthsimple, which recently announced its UK expansion and raised a $50 million Series B; Montreal-based Blockstream, which raised a $55 millionSeries A in February 2016; and Toronto-based Wave, which raised $32 millionfinancing round from RBC, Portag3, and other investors in May.

The list also includes Vancouver-based Trulioo, which produces ID verification software for compliance and to fraud risk mitigation; Toronto-based Financeit, a cloud-based point-of-sale platform; and Toronto-based Street Contxt, which raised a fresh round of funding from 8VC, Point72 Ventures, Palm Drive Capital, and Portag3 Ventures in April.

Authors:

George Popescu
Allen Taylor