Thursday August 22 2019, Weekly News Digest

Funding Circle loan originations

News Comments Today’s main news: Better.com raises $160M. Funding Circle passes $10B in global small business lending. Numbrs Personal Finance achieves unicorn status. Tala raises $110M, expanding into India. LendingKart raises $2.95M. Today’s main analysis: LendingTree Personal Loan Report–July 2019. Today’s thought-provoking articles: Slack’s direct listing and the future of security tokens. Is Funding Circle […]

The post Thursday August 22 2019, Weekly News Digest appeared first on Lending Times.

Funding Circle loan originations

News Comments

United States

United Kingdom

European Union

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News Summary

United States

Better.com Closes Series C at $ 160 Million (BusinessWire), Rated: AAA

Better.com, one of the fastest-growing homeownership platforms in the country, today closed its Series C fundraise at $160 million, bringing the company’s total funding to $254 million to date. Activant Capital, Ping An Global Voyager Fund, Ally Financial, Citi, AGNC, Healthcare of Ontario Pension Plan (HOOPP) and American Express Ventures joined existing shareholders Goldman Sachs, Pine Brook, and Kleiner Perkins in the round.

The new investment round comes amid a period of tremendous growth for the fin-tech disruptor: Better.com has grown 3x year-over-year and is currently funding $375 million in mortgages a month. This puts the company on track to lend over $4 billion in 2019. Better.com also funded $1 billion of loans in Q2 of this year alone, more than in all of 2016 and 2017 combined.

LendingTree Personal Loan Offers Report – July 2019 (LendingTree), Rated: AAA

The most common reasons for seeking a personal loan are credit card refinancing and debt consolidationThese two categories comprise 67% of loan inquiries in July.

Source: LendingTree

Slack’s Direct Listing: The Non-IPO Threat to Wall Street and its Future in Security Tokens (Global Banking Finance Review), Rated: AAA

Removing the middleman through security tokenization also means democratizing access to investment opportunities. By breaking up large assets into individual tokens, exclusive investment opportunities that would otherwise be reserved for the super-rich are opened up. Essentially, security tokenization is doing to private investments what peer-to-peer lending has done to private lending by removing the lock-up, liquidity, and the lower minimum investment involved in traditional venture capital and private equity investing.

As well as tokenized VC investing, it is also becoming possible for a small investor to buy a stake in luxury assets such as a multi-million dollar Manhattan apartment, or a share in a new blockbuster movie or a hit album.

Elevate Credit Issues Quarterly Earnings Results (Mayfield Recorder), Rated: A

Elevate Credit (NYSE:ELVT) released its quarterly earnings results on Monday, July 29th. The company reported $0.13 earnings per share for the quarter, beating analysts’ consensus estimates of $0.07 by $0.06, Briefing.com reports. The business had revenue of $177.76 million for the quarter, compared to the consensus estimate of $187.48 million. Elevate Credit had a net margin of 2.45% and a return on equity of 19.19%. Elevate Credit’s revenue for the quarter was down 3.6% on a year-over-year basis. During the same quarter last year, the firm earned $0.07 EPS. Elevate Credit updated its FY 2019 guidance to $0.55-0.65 EPS and its FY19 guidance to $0.55-0.65 EPS.

Reliant Funding Celebrates Seven Years on the Inc. 5000 (PR Newswire), Rated: A

Today, Inc. magazine revealed that Reliant Funding is number 3,838 on its annual Inc. 5000 list, the most prestigious ranking of the nation’s fastest-growing private companies. The list represents a unique look at the most successful companies within the American economy’s most dynamic segment—its independent small businesses. This is Reliant Funding’s seventh consecutive year the Inc. 5000.

Eisman slams Zillow; US Consumer Mixed; 30-Yr Hits Record (PeerIQ), Rated: A

A year ago the prevailing view was the era of low rates was over. We find ourselves now testing record low 30-year US Treasury yields, and potential issuance of 50-year and 100-year bonds. Mohammed El-Erian is raising the concern that with the panic headlines we might be talking ourselves into a recession.

Steve Eisman, famed for shorting subprime mortgages, took a direct shot at Zillow’s new business model. We highlight the excerpt of Steve’s comments, particularly as a number of FinTechs are entering the market for intermediating residential homes:

Zillow has one of the most flawed business models I’ve seen in a very, very long time.

The part of it I find the most problematic is what they call, I believe, their iHome business, their internet buying business, where they actually go out and buy homes and flip them. I actually think the company doesn’t understand the real risks of this business, which are massive.

Is Real Estate Crowdfunding a Good Investment? (Lifehacker), Rated: A

Ask a rich person how they got rich, and there’s a good chance they’ll say they invested in real estate. In fact, real estate is generally accepted as one of the most solid ways to build wealth.

“It’s not only about access, but also the size of some of these transactions. The average consumer can’t buy a $10 million building, however they can take on a $100 share of it.”

What it costs to make money with real estate investing

For example, CrowdStreet requires a minimum investment of $10,000 for a minimum 36 months, but doesn’t charge account fees. Fundrise lets you get started with $500, but charges a fee of 1% per year, which is relatively steep compared to fees for roboadvisors, which tend to be around 0.25% to 0.60%.

Joseph Hogue of My Stock Market Basics examined average returns on real estate crowdfunding platforms: Open investments had a return of around 14.7%, with completed deals averaging 14.6%.

Fund That Flip raises $ 11 million in growth financing from Edison Partners (Finextra), Rated: A

Fund That Flip, an award-winning fintech platform and marketplace lender of residential real estate loans, today announced a raise of $11 million from Princeton, NJ.-based growth equity firm Edison Partners.

After origination, Fund That Flip offers accredited and institutional investors the opportunity to purchase fractional shares of the loan and earn an 8%-9% annualized yield.

3G Capital Advisors Facilitates $ 179.2 Million in Freddie Mac Loans Between Greystone and Watermark J&L Partners (Yahoo! Finance), Rated: A

3G Capital Advisors, LLC, a boutique real estate advisory firm focused on developing creative capital solutions for its partners, announced today the closing of $179.2 million in permanent financing for Watermark J&L Partners, LLC originated through Greystone and provided by Freddie Mac. The loans will refinance a portfolio of four multifamily communities with a total of 1,188 units in Arkansas, Colorado and Texas.

The 50 Most Expensive Towns in America (LendingTree), Rated: AAA

To take a look at how expensive town life can get, LendingTree, the nation’s largest online loan marketplace, ranked the 50 towns in the United States with the most expensive median home values. Our study also looks at the median income in these towns to determine how attainable homeownership is for the average person living there. What we found: The towns with the most expensive home prices are unaffordable to median income earners who live in those areas.

Key findings

  • Vineyard Haven, Mass., Summit Park, Utah, and Breckenridge, Colo., are the three most expensive towns in the country. Each of these towns is known for its proximity to natural features like mountain ranges or the ocean. While high levels of wealth tend to pool in these towns, the majority from these areas make an income well under the national household average.
  • The majority of the towns featured in this study are unaffordable for the median income earner living in them. Both renting and owning a home are out of reach for median income earners in 42 of the 50 towns looked at in this study. This suggests that many people who work in the towns featured in these studies don’t necessarily live there, and instead commute.
  • As our study makes clear, living in a small town does not necessarily make the cost of living more affordable. Many people living in the towns featured in our study would have an easier time affording a home in a major metropolitan area than in their current area. That being said, some of these towns are still relatively affordable like Los Alamos, N.M. or Gillette, Wyo.
Source: LendingTree

The Apple Card’s best feature is also its biggest flaw (Business Insider), Rated: A

But that’s also the Apple Card’s biggest hindrance. Sure, having a credit card that lives on your phone in a digital wallet is ideal for convenience and security. Yet it also makes the experience of using the Apple Card more limiting than other options, especially when it comes to paying your balance, managing your card, and the rewards you get.

Silvergate Bank Announces A Crypto Lending Service In IPO Filing (Coin Revolution), Rated: A

Silvergate is the leading financial services provider for top Crypto exchange companies such as Xapo, Bitstamp, and Coinbase. The latest report indicates that the bank intends to roll out Crypto lending services.

Planning for LendIt Fintech USA 2020 is Underway (Lend Academy), Rated: A

LendIt Fintech USA will be held in New York City on May 13-14 next year at the Javits Center.

  • The Small Business Fintech Ecosystem
  • Revolution at the Point of Sale
  • New Approaches to Capital for Growth Businesses
  • Digital Banking Goes Mainstream
  • New Systems for Identity and Trust
  • Applying Fintech to Financial Wellness

Fintech Takeover Spending Hits Record Levels on 2019’s Megadeals (Bloomberg Law), Rated: A

Three blockbuster deals for financial-technology companies pushed takeover spending to a record $120 billion in the first half of the year as bidders targeted payments firms, according to research from consulting firm Hampleton Partners.

Ohio College Graduates Struggle With Rising Student Debt (CityBeat), Rated: A

Welcome to Ohio, where the average student debt is $28,947, according to a new study by LendEDU, an online student loans marketplace. Ohio’s average student loan debt is smack dab in the middle of the state-by-state rankings, with average student debt ranging from $19,742 in Utah to $38,776 in Connecticut.

About 58 percent of all students graduating from a four-year college or university in Ohio and the U.S. received a student loan to finance their education.

Futures Brokerage Capital Trading Group Announces Launch of Managed Futures Podcast (PR Web), Rated: B

Capital Trading Group, LP (“CTG”), an investment firm specializing in execution and account management for commodity trading advisors, has announced the release of its new Managed Futures Podcast hosted by firm principal and alternative investments specialist, Nell Sloane.

United Kingdom

Funding Circle Surpasses $ 10 Billion Lent to Small Businesses Globally (BusinessWire), Rated: AAA

Funding Circle, the leading small business loans platform in the UK, US, Germany and the Netherlands, today announced that investors have lent more than $10 billion to small businesses globally through its platform. Achieving this milestone in less than a decade, Funding Circle has proven that its model has become the preferred option for small business funding that fuels economic growth ⁠— with every $1 lent to a small business through Funding Circle in 2018 contributing $2 to GDP, according to Oxford Economics.

Source: Funding Circle

Is Funding Circle Holdings Using Debt In A Risky Way? (Yahoo! Finance), Rated: AAA

The image below, which you can click on for greater detail, shows that at June 2019 Funding Circle Holdings had debt of UK£146.8m, up from none in one year. But it also has UK£449.9m in cash to offset that, meaning it has UK£303.1m net cash.

Source: Yahoo! Finance

Zooming in on the latest balance sheet data, we can see that Funding Circle Holdings had liabilities of UK£180.2m due within 12 months and liabilities of UK£19.3m due beyond that. On the other hand, it had cash of UK£449.9m and UK£14.9m worth of receivables due within a year. So it actually has UK£265.3m more liquid assets than total liabilities.

ThinCats to lend £400m to growth companies by end-2020 (Growth Business), Rated: A

ThinCats, the growth-business lender, wants to be lending £400m a year to cash-starved scale-up companies by the end of 2020.

Welsh Delio secures £3.3m equity round (Fintech Futures), Rated: A

UK-based private asset infrastructure service, Delio, has secured £3.3 million in an equity investment round led by Maven Capital Partners, which will purport the company into markets across Asia, the Middle East and North America.

UK tech firms attract record £5.5bn in foreign investment (P2P Finance News), Rated: A

THE UK’S tech sector has attracted $6.7bn (£5.5bn) in foreign investment this year so far, which is more than the whole of 2018.

During the second quarter of 2019 more than $1.9bn came via investment deals valued at $100m or more.

Aprao launches development appraisal tool (PlaceTech), Rated: B

London-based startup Aprao has released a beta version of its development appraisal tool to 650 companies.

Aprao currently partners with property marketplace LendInvest, developer Careys New Homes, and design house Fusion to help further develop the technology.

New P2P entrants have a ‘second move advantage’ (P2P Finance News), Rated: A

If an industry as new as P2P can have legacy issues, there’s clearly a ‘second move advantage’ for new potential entrants who have an opportunity to build systems and processes ready for the new Financial Conduct Authority (FCA) rules:

  • SMCR – the new governance rules are not just about assigning responsibility to individuals.
  • Three lines of defence – will you need a dedicated compliance function? risk? internal audit?
  • Recovery and resolution plans – we’re in discussions with a number of potential new entrants who are at the very early stages of their IT planning.
  • Appropriateness tests – whilst incumbent firms are progressing with their plans to comply with the requirements, it is far easier to build the process from scratch – and price it in to the strategy.

Existing players continue to hit new milestones (such as Funding Circle’s $10bn announced this month), and secure increased funding.

How banking-as-a-service (BaaS) works and industry outlook (Business Insider), Rated: A

In the UK, the new revenue potential generated through open banking-enabled small- and medium-sized business and retail customer propositions was £500 million ($700 million) in 2018, per PwC — and Business Insider Intelligence expects that to grow at a 25% compound annual growth rate to reach £1.9 billion ($2 billion) by 2024.

European Union

Swiss Fintech Startup Becomes a $ 1 Billion Unicorn (Bloomberg), Rated: AAA

Numbrs Personal Finance raised $40 million to bring the total capital invested to almost $200 million, Chief Executive Officer Martin Saidler said in an interview. Numbrs offers an app that enables users to manage their existing bank accounts in one place and to buy financial products.

Lendable launches Luxembourg fund with Credit Suisse (AltFi), Rated: A

Lendable has launched its first Luxembourg-based fund initially providing up to £225m of financing into the UK consumer market.

The consumer lender set up the fund alongside Credit Suisse, with the pair raising capital from 10 unnamed investors across seven geographies over a three-year investment period.

Events for every P2P professional’s calendar in 2019 (P2P Finance News), Rated: A

LendIt Fintech Europe 2019

Dates: 26-27 September 2019

et 15 per cent off on your tickets with the discount code P2PFN15%.

Register at www.lendit.com

MoneyLIVE: Lending 2019

Date: 2 October 2019

Open Banking Expo

Date: 13 November 2019

Brocc raises Debt Financing from Goldman Sachs (MyNewsDesk), Rated: B

Brocc, a Swedish company specialized in P2P Consumer Lending, has raised funding from Goldman Sachs Private Capital (“Goldman Sachs”). Brocc intends to use this financing to issue consumer loans, allowing consumers to consolidate existing debts at lower rates.

International

Tala, A Digital Lending Startup, Raises $ 110M, Eyes India For Expansion (Crunchbase), Rated: AAA

To help over three billion underbanked adults have a chance at a loan, Tala has raised $110 million in a Series D round led by RPS.

The company currently has 500 employees across locations in Southern California, Kenya, Mexico, the Philippines, and India. The new money will be used to expand its India presence, as well offer new services. To date, Tala has raised $219.4 million in funding from investors like Revolution, Institutional Venture Partners, and PayPal Ventures.

Australia

Harmoney earmarks new CEO for NZ, Australian growth (NBR), Rated: AAA

Australasia’s largest marketplace lender is meeting a rapid pace of growth by ushering financial services leader David Stevens into the business from September 1, 2019. Stevens steps into the CEO role in early 2020, a transition that will free Harmoney’s founder and current CEO Neil Roberts to focus on strategy and product as the platform continues to innovate and lead across both markets.

India

Lendingkart Secures $ 2.95M From Sistema Asia Fund (PYMNTS), Rated: AAA

Indian startup Lendingkart announced that it has raised $2.95 million in new funding from Sistema Asia Fund.

The investment comes days after the company raised $30 million in a Series D financing round led by existing investors including Fullerton Financial Holdings, Bertelsmann India Investments and India Quotient. The total funds raised by LendkingKart is now at $146 million.

These are the top challenges faced by MSMEs, the growth drivers of Indian economy (Money Control), Rated: A

More than 500 Lakhs MSMEs exist currently and over the last 5 decades in India. This SME sector has grown dynamically contributing 45 percent of India’s GDP according to ‘Micro Merchant Market Sizing and Profiling Report’ which also shows it provides employment to around 46 crores people in India and is growing at a fast rate of 11.5 percent every year.

Business Loan Application Process: Explained (Ziploan), Rated: A

There are many aspects of the business that needs to be handled by a small business owner when he runs a business. As a small business owner, he doesn’t have resources to waste. But he needs to the optimal performance of every resource/department, so that cost of production is kept at a minimal level. And the profits are also enhanced. But when an individual multi-tasks and handles various functions all by himself, there are chances that some aspects of the business may miss his attention.

Asia

A recent study by the Singapore Fintech Association (SFA) and PwC said that 94% of fintech companies are eyeing workforce expansions over the next 12 months, with 28% expecting to double their employee numbers in the next three years.

Notable Singaporean fintech firms include digital insurer Singapore Life, remittance company InstaRem, and peer-to-peer lending platform Validus. The latter two companies are backed by Vertex Ventures, a venture capital firm under Temasek Holdings, Singapore’s sovereign wealth fund.

In order to provide an easy and universal assessment of creditworthiness for small medium enterprises (SMEs), CTOS Data Systems Sdn Bhd recently launched the CTOS SME Score.

CURRENTLY, there are almost a million SMEs in Malaysia contributing 37% to the national GDP. This figure is expected to rise to 41% by 2020.

SMEs also make up 98% of local businesses and create employment for two-thirds of all working Malaysians.

MENA

With 2,000 applications, Israel fintech regulator eyes licensing changes (CoinGeek), Rated: AAA

The Israeli Capital Market Authority is seeking to make changes to its licensing regime in order to encourage competition and grow the financial technology (fintech) industry in the country. According to a report by local daily Calcalist, the regulator has established dedicated teams that will specialize in blockchain and other emerging financial technology.

Authors:

George Popescu
Allen Taylor

The post Thursday August 22 2019, Weekly News Digest appeared first on Lending Times.

Thursday April 11 2019, Weekly News Digest

china p2p lending

News Comments Today’s main news: Lending Club loans $159M in the past week. OnDeck offers same-day funding. Kabbage secures $700M in funding. RateSetter ISA passes 200M GBP in subscriptions. Funding Circle CEO pocketed 4M GBP last year. Klarna launches global customer authentication platform. Today’s main analysis: Drivers of global growth in FSB’s shadow banking. (A […]

The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

china p2p lending

News Comments

United States

United Kingdom

European Union

China

Other

News Summary

United States

Need a loan for Tax Day? According to Lending Club data, you’re not aloan… er, alone (Thinknum), Rated: AAA

As seen in data from Lending Club ($NYSE:LC), there is a cyclical spike in the number of loans, as well as the money needed by those needing loans, right around the end of tax season. While this finding may seem pretty clear without any data, it essentially confirms an adage in the lending industry.

RIght now, there was only $21.5 million loaned out to lendees from April 8 to today. This past week, there was about $159 million worth of all sorts of loans — personal, mortgage, etc. — loaned out by the platform.

Lending Club Total Principal Loaned (Weekly)

ONDECK OFFERS SAME DAY FUNDING TO EMPOWER SMALL BUSINESS (OnDeck), Rated: AAA

OnDeck today announced that it will offer to fund and debit customer bank accounts with Same Day ACH transfers, eliminating a decades long pain point for small business owners accustomed to the traditional ACH transfer process, which can take multiple days and lacks certainty on when the transactions will hit bank accounts.

Same Day ACH transfers from OnDeck provide qualified OnDeck Term Loan and Line of Credit customers with funds up to the National Automated Clearing House Association (NACHA) cap of $25,000 by 5:00 pm local time on the same business day the customer books or makes a draw on their line of credit.* Qualified customers are also debited via the same day ACH service, providing them additional predictability in transaction clearing times and offering better clarity around day-to-day cash flow management.

Highlights from Jamie Dimon’s Annual Letter (PeerIQ), Rated: AAA

US payrolls rose by 196 k in March and the unemployment rate remained at 3.8%.

Source: Bloomberg, PeerIQ

Highlights from Jamie Dimon’s Letter to Shareholders

Jamie Dimon published his annual letter to shareholders. We look at some highlights below:

  • The banking system, and JPM in particular, is over-capitalized – Under the Fed’s most extreme stress-testing scenario, where 35 of the largest American banks bear extreme losses (as if each were the worst bank in the system), the combined losses are about 6% of the total loss absorbing resources of those 35 banks.
Source: JPM, PeerIQ

PM is investing billions in technology to compete – the cloud, AI, ML and digital banking

  • JPM customers can now open a bank account online in under 5 minutes and can reduce their mortgage closing times to 3 weeks.
  • The bank now has 49 Mn active digital customers, including 33 Mn active mobile customers
  • JPM is looking at fintechs in the US and in China as not just opportunities but also looming competition.

Online lender Kabbage rakes in 0m funding (Verdict), Rated: AAA

Kabbage, an online lender for small businesses, has fetched $700m in asset-backed securitisation (ABS) funding.

With the securitisation, the company’s debt funding increases to $940m.

Real-time data was Kabbage’s secret sauce, its first investor says (American Banker), Rated: A

The firm started life as a small, scrappy fintech startup in Atlanta in 2008, but has grown rapidly. It made $2 billion worth of loans in 2018 and more than $600 million in the first quarter of 2019. It also recently agreed to provide financing at the point of sale on Alibaba.com as part of a program called Pay Later.

Upstart Raises $ 50 Million and Announces New Bank Partners (Lend Academy), Rated: A

One of the big announcements on day one of LendIt Fintech USA 2019 is from consumer lender Upstart. They have announced a $50 million equity raise as well as three new partners for their “Powered by Upstart” banking as a service program. Oh, and they are getting into credit cards.

PeerStreet Lowers Minimum Real Estate Investment to $ 100 (Think Reality), Rated: A

The burgeoning peer-to-peer lending platform PeerStreet has unveiled product updates that enable investments of only $100.

The company recently announced it’s lowered the minimum investment to $100 for “small balance reinvestments” when using its automated investing product. The upgrade also expands the investment types available for automated investing to include cash offer loans and 30-day notes, which offer shorter terms than typical bridge loan investment options, the company said.

Sharestates Wins Top Real Estate Platform Award at LendIt Fintech USA 2019 (PR Newswire), Rated: A

Sharestates, a marketplace lending platform that connects real estate developers with investors, was crowned Top Real Estate Platform at LendIt Fintech USA2019 in San Francisco, California on April 9, 2019. The Top Real Estate Platform award is based on performance, volume, growth, product diversity, and responsiveness to stakeholders.

Now operating in 46 states, Sharestates offers diversified asset classes including residential, multi-family, mixed-use, commercial properties, and land acquisitions.

Since launching in 2015, Sharestates has closed on over $1.7 billion in total loan volume and returned over $675 million in principal to investors. Average annualized returns have exceeded 10% every year. As a result of its strong performance and valued relationships, 82% of Sharestates loan volume has come from repeat borrowers and 81% of its investors are repeat investors.

The stREITwise Platform Brings Real Estate Investment to All (Realty Biz News), Rated: B

The company has just announced a new acquisition to its investment portfolio, a $32 million mixed-use building in Carmel, Indiana, one of the most affluent suburbs of Indianapolis. The 140,000-square foot Allied Solutions Building, already around 87 percent leased, stands poised to increase dramatically in value thanks to its location in the heart of downtown Carmel in the heart of a busy mixed-use development surrounded by restaurants, coffee shops, fast-casual dining, service-oriented retail, and the locally renownedSun King distillery and food hall right next door.

13 cities where renting is cheaper than buying a home (AOL), Rated: A

Americans’ homeownership rate is 64.8%, according to the latest U.S. Census data.

Following are the 13 metros where renting is cheaper by more than $150 a month, beginning with cities with a smaller advantage for renters.

BlueVine Adds Term Loan to Suite of Online Working Capital Solutions to Fuel Small Business Growth (GlobeNewswire), Rated: A

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced that it is making term loan financing available for business owners through its suite of online financing solutions. The BlueVine Term Loan provides small- and medium-sized business owners with fast and simple access to financing to grow their businesses through BlueVine’s advanced online platform. More than 59 percent of businesses are looking for funds to grow their business, according to the 2017 Federal Reserve Small Business Credit Survey Report on Employer Firms. With a BlueVine Term Loan, business owners can quickly pursue larger projects and investments to bring their businesses to new heights.

Aura Approves 350,000th Affordable Loan (Bakersfield.com), Rated: A

Aura, a mission-driven financial technology company that offers affordable loans to hard-working families, this week approved its 350,000 th loan.

Since its launch in 2014, Aura has provided more than $437 million in credit-building loans to borrowers at approximately 1,200 partner locations using technology that enables local businesses to administer loan applications. Currently, Aura’s average loan size is around $1,600.

In total, Aura has raised over $403 million in social bonds across 21 bond issuances. The most recent issuance was in March for $50 million.

What Kind of Collateral Do I Need for a Business Loan? (Nav), Rated: A

Before you can qualify for a commercial loan, you’ll need to prove that doing business with your company is a good risk. This means you’ll need to pass successfully through a lender’s qualification process.

Next Wave of Personal Loan Growth May be Driven by Prime and Above Consumers (MarketWatch), Rated: A

The prime and above risk tiers have become a greater focus for lenders in recent years. Nearly two-thirds of unsecured personal loan balances originated in the first three quarters of 2018 were lent to prime and above consumers. FinTechs drove this shift as originations for prime and above grew to 62% in 2018, up from 52% in 2013. While still less conservative than banks, FinTechs’ overall risk profile for originations now aligns tightly with credit unions. At the end of 2018, FinTechs held the majority share of personal loan balances with 39%, while banks and credit unions followed with 28% and 21%, respectively.

Student Debt Isn’t Just An Employee Problem — It’s Also An Employer Problem (Killer Startups), Rated: A

The Federal Reserve Bank of New York reported in its Quarterly Report on Household Debt and Credit for the fourth quarter of 2018 that outstanding student loan debt increased to $1.46 trillion, which is $15 billion more than the previous quarter. It also reported that student loan debt rose by $79 billion in 2018.

The student debt load isn’t just impacting the individual students who enter the workforce, hoping they can find a job that enables them to make those monthly payments. I’s also slowing economic growth. A January 2019 Federal Reserve paper noted that young adults report their student loan debt is the reason they’re unable to buy a home. The same report also cited other research concluding that 20 percent of the decline in homeownership among young adults relates to student loan debt that’s been rising since 2005.

Amount Announces Cloud-Based Account Verification Platform (Kake), Rated: A

Amount today announced AmountVerify, a cloud-based platform for risk management across financial products. AmountVerify marks the first time industry leading fintech provider Avant is making a component of its cutting edge online lending platform available to financial service companies as a standalone product through Amount.

Onfido raises $ 50M to create the Identity Verification Standard for Businesses Globally (Markets Insider), Rated: A

Onfido, the global identity verification provider, today announced it has raised $50M in funding, bringing the total investment in the company to over $100M. The round was led by SBI Investment and Salesforce Ventures, with support from M12 (formerly Microsoft Ventures), FinVC and others, including existing investors.

Forward Financing Expands Capital Base with $ 90 Million Credit Facility (Yahoo! Finance), Rated: A

Forward Financing has closed on a $90 million credit facility, consisting of a $60 million senior revolving credit facility and a $30 million junior term loan. AloStar Capital Finance (“AloStar”), a division of Cadence Bank, N.A., served as the Agent on the senior facility.

Credibly Announces Investment Grade Senior Debt Offering (Yahoo! Finance), Rated: A

Today, Credibly announces the next phase in its balance sheet growth strategy with a $10 million Investment Grade-rated senior debt offering. The transaction closed on March 28, 2019.

Mitek Expands Auto-Capture User Experience Across All Digital Channels with the Addition of Desktop (GlobeNewswire), Rated: A

Mitek today announced it has upgraded its desktop browser experience to support auto-capture so customers can rapidly verify the identity of applicants across all digital channels: desktop browsers, mobile web and native applications.

According to Javelin Research, today only one third of users (34 percent) still complete the entire account opening process on their desktop.

MiSnap delivers a superior auto-capture experience for desktop and across mobile devices through:

  • Guided commands:  Real-time commands such as where to place a document in relation to the camera or detection of glare on the ID document are some of the conditions evaluated in order to help the user capture an optimal image, which improves image acceptance rates and reduces capture retries.
  • Advanced image analysis: Once MiSnap has achieved an optimal capture of the ID document, the software then further analyzes the image and makes the necessary adjustments in order to process all images consistently and accurately.
  • Modern architecture: Because MiSnap uses WebAssembly, it can perform at native speeds and is easy to integrate into customers’ web-based apps and requires minimal footprint.

58% of lenders will use AI in next two years (AI Foundry Email), Rated: A

Fannie Mae recently put out a 

  • Nearly two-thirds of lenders are familiar with AI
  • But, only 27% are using it in their businesses now, and…
  • Only half of that group are currently using it with customers (the rest are doing trials)
  • However, looking ahead two years – 58% of lenders expect to use AI/ML in their mortgage business.
  • Of the rest:
      • 22% predict they’ll be investigating AI
      • 19% foresee being in a “wait and see” mode

    These data points show us that “prime time” is coming soon for AI/ML in mortgages. 

    Fintech alone won’t be enough to boost credit union mortgage volumes (Credit Union Journal), Rated: A

    How can credit unions, especially small institutions, compete with Quicken Loans’ Rocket Mortgage “Push button, get mortgage” campaign?

    They can’t – and, sources said, they shouldn’t try.

    GROUNDFLOOR Wins 2 FinTech Awards (Groundfloor Email), Rated: B

    GROUNDFLOOR was named Best Crowdfunding Platform by the 

    Pulte Mortgage and Finicity Partner to Combat the Home Loan Paper Chase (MarketWatch), Rated: B

    Pulte Mortgage announced today it is partnering with Finicity — a leading provider of real-time financial data access and insights, to provide its borrowers with a faster, simpler and more secure way to navigate the home financing process.

    Hudson Data and LendingPoint partner to prevent Synthetic ID fraud (Finanzen), Rated: B

    Hudson Data and LendingPoint announced that they are partnering to create an industry solution to prevent synthetic identity fraud using powerful graph machine learning.

    Dharma crypto lending platform officially goes live (CoinGeek), Rated: B

    Dharma Labs completed a Series A funding round earlier this year to support its cryptocurrency lending platform project. The San Francisco-based company raised $7 million from companies such as Polychain Capital, Coinbase Ventures and others and, if there was any concern about the platform not going live, those concerns are now extinguished. Dharma announced this past Monday in a Medium post that the platform is now live.

    United Kingdom

    RateSetter ISA Milestone: Passes £200 Million in Subscriptions (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender RateSetter recently announced its ISA has now passed the milestone of attracting £200 million in subscriptions.

    “Investors have enjoyed an average annualised return of 4.5%, tax-free of course, since the RateSetter ISA launched in February 2018. The average RateSetter ISA balance stands at £11,000.”

    Funding Circle boss pocketed more than £4m last year (P2P Finance News), Rated: AAA

    FUNDING Circle founder Samir Desai (pictured) earned more than £4m last year, having cashed in some of his shares at the time of the peer-to-peer lender’s stock market flotation.

    Desai took home a salary of £210,000 last year, according to Funding Circle’s annual report, a four per cent increase from his salary of £202,000 in 2017.

    The majority of his total remuneration of £4.081m came from cashing in share options.

    Zopa rewrites outdated money idioms (The London Economic), Rated: AAA

    Each future-looking idiom challenges the status quo. For example, according to Zopa, the ‘signing for the bill’ gesture will be redundant soon. Instead, when people have finished their meal, people will be more likely to signal facial or iris recognition to the waiter. Jonesy gives his take and takes it one step further by illustrating a customer displaying his eyeball to request the bill.

    Source: The London Economic

    Fintech unicorns are leading job creation in London (Business Insider), Rated: AAA

    In 2018, there was a 61% increase in fintech job creation within London from the previous year, per a new report by Robert Walters, making it the fastest growing sector for vacancies in the city.

    The UK houses 25% of all fintech unicorns and their growth plans call for more talent. There are 29 fintech unicorns worldwide, seven of which are based in the UK, making the UK second only to San Francisco, which is home to nine.

    Over 30% of jobs in the UK’s fintech industry are for IT-related roles, compared with 24% in 2017. And fintech unicorns’ hiring for IT professionals increased 74% year-over-year (YoY).

    Source: Business Insider

    London to take San Francisco’s fintech unicorn crown (The Innovation Enterprise), Rated: A

    However, the report has predicted that London could take the lead as early as this year, as the city receives 39% of European fintech venture capital funding, with the runner-up, Berlin, taking just 21% of the total investment.

    With 50% against a global average of 33%, the UK also enjoys the highest rate of consumer fintech adoption of any Western country, only beaten by India and China, the report found.

    LendInvest gains £200m HSBC funding as it seeks home loan market entry (Verdict), Rated: A

    LendInvest, which operates an online marketplace for mortgages, has received an investment of £200m ($261m) from HSBC UK to support its foray into the regulated home loan sector.

    Peer-to-peer scheme for first-time buyers launches (FT Advisor), Rated: A

    Start-up company Stepladder is promoting a new way for first-time buyers to save for a house deposit.

    Arbuthnot Latham launches Arbuthnot Direct for those seeking long-term interest returns (Arbuthnot Email), Rated: B

    Arbuthnot Latham & Co., Limited (“Arbuthnot Latham”) is pleased to announce the launch of its new platform under the trading name of Arbuthnot Direct. Arbuthnot Direct offers fixed term deposits online, targeting retail customers who are seeking interest returns on their money over the longer term. The platform held a successful soft launch in February 2019 and has already met with a positive reception.

    China

    The rise and fall of P2P lending in China (Finextra), Rated: AAA

    It is worth mentioning that the size of China’s P2P industry is larger than that of the rest of the world combined, with outstanding loans of US$217.96BN.

    China’s online P2P lending industry grew rapidly between 2011 to 2015, with the number of P2P lenders growing from 50 to nearly 3,500 respectively.

    Trouble started brewing in China back in 2016, when statistics released by the Chinese Banking Regulatory Commission showed that about 40% of P2P lending platforms were in fact Ponzi schemes.

    This triggered the shutdown of P2P lending platforms; over 900 closed by the end of 2016. For 2018, only 1,021 providers remained in place.

    Source: Bloomberg News

    Shenzhen police arrest Zhang Wei, calling China Create Capital a ‘mafia-like gang’ (SCMP), Rated: A

    China Create Capital Limited, the investment holding company headed by the 46-year-old Heilongjiang native is a “mafia-style gang” involved in illegal fundraising, harassment, blackmail, illegal detention of people and the possession of firearms, the Shenzhen police said in a notice. The whereabouts of Zhang, who was arrested with 43 other executives of China Create, could not be ascertained.

    The arrests are the latest in the Chinese government’s crackdown on crime and corruption in the country’s financial system and capital markets, where 1,129 “mafia-like” syndicates were broken up across 10 provinces last year, with 4.94 billion yuan (US$737 million) of assets seized, according to the police. A number of Chinese oligarchs including Anbang Group’s

    former chairman Wu Xiaohui

    , CEFC Group’s founder Ye Jianming and financier Xiao Jianhua had fallen from grace since 2017.

    $ 60 Million and Rising: China’s Crypto Funds Try Lending to Beat Bear Market (CoinDesk), Rated: A

    These new crypto lenders include such notable names as Bixin Capital, FBG Capital and DGroup, founded by Dong Zhao, who made a name by operating one of the longest-running over-the-counter (OTC) trading desks in China. Along with a startup called Babelbank, these investors have originated a combined $60 million worth of loans over the last five months, denominated in cryptocurrencies or, in one firm’s case, Chinese yuan.

    European Union

    Klarna launches global customer authentication platform (Klarna), Rated: AAA

    Klarna today announced the launch of its global authentication platform — an aggregator with multiple global and local authentication solutions. The platform allows multinational businesses, including merchants and other banks, to provide a simple, secure and personalised customer authentication experience irrespective of market, through a one-time integration.

    Klarna Sees Payments as Evolving From Function to Engagement (WWD), Rated: A

    Klarna’s Hannah Bravo says customers chose brands based on payment options.

    This New Tool Is Helping Retailers Build Consumer Trust During Online Checkouts (Footwear News), Rated: B

    The Klarna platform enables businesses to choose from a range of global and local authentication methods so that they can find one that works best for their customer. Whether using SMS verification or emailed one-time passwords, brands and retailers can verify their customers’ identities with minimal interruption to the consumer’s shopping journey.

    International

    Drivers of Global Growth in FSB’s Shadow Banking (DBRS Email), Rated: AAA

    DBRS sees significant risks stemming from continued growth in shadow banking globally. Assets are now at $52 trillion globally, up from $30 trillion in 2010, according to the FSB. The U.S. has the largest concentration with 29% of global shadow banking assets. But, this is down from 48% in 2010, as other regions are growing faster.

    Summary highlights of the commentary include:

    • Shadow banking is still growing. This narrow, but rapidly growing, subset of nonbanks had assets of $52 trillion in 2017, up 75% from $30 trillion in 2010.
    • Since 2010, assets of nonbanks are also growing, up 61% to $185 trillion. That is 49% of the $378 trillion in total global assets in all financial institutions at the end of 2017, up significantly from 44% in 2010.
    • The key driver of this growth in nonbank assets is the expansion of OFIs. These OFIs are defined as all financial institutions that are NOT central banks, banks, insurance companies, pension funds, public financial institutions, or financial auxiliaries. Assets at these OFIs grew 71% since 2010 to a record $117 trillion in 2017, or just over 30% of assets in financial institutions globally.
    • By far, the largest segment of shadow banking globally is collective investment vehicles, which are subject to runs. These include fixed income funds, mixed funds, MMFs and hedge funds. Since 2010, this segment has grown by 130% to $36.7 trillion in assets. By contrast, growth in other segments has been less than $1 trillion, or even negative.

    Read the full report here.

    Crypto Lending Platform Salt Adds Support for Dash as Collateral (Crypto-Economy), Rated: A

    Cryptocurrency lending platform Salt will now be allowing its users to collateralize their Dash holdings including their Masternode staking coins to access loan facilities.

    India

    RentoMojo in talks to raise $ 40 million from GMO, others (livemint), Rated: A

    For RentoMojo, the latest fundraise comes almost two years after it raised $10 million in July 2017 from Bain Capital, Accel and Chiratae Ventures. Renauld Laplanche, chief executive of US-based Lending Club, also took part in his personal capacity.

    Asia

    Housing sector remains major source of complaints: BPKN (The Jakarta Post), Rated: A

    The BPKN received 154 complaints in the first quarter, most originating from the housing sector. BPKN communications and education coordinator Arief Safari said the agency had received 129 complaints on the housing sector in the first quarter, followed by six complaints on online peer-to-peer (P2P) lending, three on banking and the remainder on various sectors, including travel and e-commerce.

    Batumbu to help finance SMEs (The Jakarta Post), Rated: A

    PT Berdayakan Usaha Indonesia has announced that it aims to help small and medium enterprises (SME) access financial capital through a partnership program with its digital platform Batumbu.

    MENA

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

    Thursday October 25 2018, Daily News Digest

    Funding Circle Holdings PLC

    News Comments Today’s main news: SoFi CEO explains how market volatility, rising interest rates create opportunities. Amazon debuts no-fee AmEx card for small businesses. Funding Circle broker channel hits 1B GBP lending. China Rapid Finance is expected to break even. Today’s main analysis: Funding Circle’s short-lived rally. Today’s thought-provoking articles: Is student loan debt creating a millennial class […]

    Funding Circle Holdings PLC

    News Comments

    United States

    United Kingdom

    European Union

    International

    Other

    News Summary

    United States

    SoFi CEO Anthony Noto: Market volatility, rising rates create ‘opportunity for us’ (CNBC) Rated: A

    Rising interest rates and market volatility, while feared on the Street, create an opportunity for online lending platform SoFi to gain new customers, according to CEO Anthony Noto.

    “When the markets pull back, people evaluate: ‘Where am I putting my money from an investment standpoint?'” Noto said on CNBC’s “Closing Bell” on Tuesday.

    Made conscious decision to focus on quality, not quantity of loans: SoFi CEO Anthony Noto from CNBC.

    Amazon Debuts No-Fee AmEx Card to Lure Small-Business Spending (Bloomberg) Rated: AAA

    Amazon.com Inc. and American Express Co. are upping the ante in their bid for small-business spending.

    The two companies unveiled a new co-branded card for small businesses on Tuesday. Cardholders with an Amazon Prime membership will be able to choose between an interest-free loan for 90 days or 5 percent back on purchases made at Amazon.com, Amazon Business, Amazon Web Services and Whole Foods Market, the companies said in a statement. The no-fee metal card will also offer 2 percent back on purchases at U.S. restaurants and gas stations and on mobile-phone services.

    Student-Loan Debt Is Bringing on Millennial Class War (Vice) Rated: AAA

    MagnifyMoney, an independent service that compares financial products and is affiliated with the loan marketplace LendingTree, recently analyzed 2016 data from the Federal Reserve and estimated the average millennial with student debt had 75 percent less net worth than their debt-free peers. Though many of the stats they calculated might have been skewed by extremes—think people with debt loads of $200,000 and trust-fund kids worth seven figures—they were able to reach some pretty startling conclusions. For instance, the median net bank account balance (checking and savings) of all grads under 35 who had loans, they found, was $5,500, while it was some $10,180 for those who didn’t.

    So what’s the most meaningful difference between those with loans and without?
    The one that’s really most costly is when you look at the retirement savings. On that side, the average grad under 35 with debt has around $21,000 in retirement savings. Someone who doesn’t have student loans has an average of almost $40,000.

    Credit Card Stats & Studies (Hub Wallet) Rated: AAA

    Source: Hub Wallet

    Building Loyalty with Gen Z and Millennials Starts with a Better Experience (Globe Newswire) Rated: AAA

    In particular, changes in the credit card market have been heavily influenced by the youngest generations. While TransUnion studies have found that consumers generally have a much higher propensity of opening their next credit product with a lender with whom they already have multiple relationships, this doesn’t appear to hold true for Gen Z. Younger consumers are engaging with new lenders rather than going to existing lenders for new products. In the report, Gen Z respondents indicated that they were the least likely to open a new credit product with a financial institution as a result of an existing relationship with that lender.

    While consumers are carrying more credit cards in their wallets today than in 2010, the industry has seen five straight quarters of declining year-over-year origination growth. The study also found that the average duration for which a credit card remains open has shortened across the majority of age groups, which would indicate shifting loyalty.

    Source: Trans Union

    The Fintech 250: The Top Fintech Startups Of 2018 (CB Insights) Rated: AAA

    The financial services industry is being transformed by insurgent startups. From capital markets to insurance and digital banking to wealth management, the Fintech 250 are among the most promising of these companies globally.

    The entire 

    Lendio Named to the 2018 CB Insights Fintech 250 List of Fastest-Growing Fintech Startups (PR Newswire) Rated: A

    CB Insights today named Lendio to the second annual Fintech 250 list, a prestigious group of emerging private companies working on groundbreaking financial technology.

    “It’s an honor for Lendio to be listed among the innovative companies driving the fintech industry forward,” said Brock Blake, Lendio CEO and founder. “Lendio is doing its part to power the economy by bridging the financing gap for small businesses. We are committed to shaping the future of marketplace lending to help business owners unlock their financial potential.”

    Lendio, the nation’s leading marketplace for small business loans, recently announced it has facilitated over $1 billion in financing to more than 51,000 small businesses across the U.S. Through access to this growth capital, Lendio’s small business customers have generated an estimated $3.8 billion in gross economic output and created more than 25,000 jobs nationwide. Lendio’s milestone comes after an 80 percent increase in loans funded through its platform in the last year.

    As Rates Rise and Recession Threatens, Alternative Lenders Batten Down the Hatches (Bank Innovation) Rated: A

    The CEOs of Prosper Marketplace, Lending Club, and Social Finance Inc. all spoke to a common theme – preparing for the coming storm and choosing loans for quality, not quantity. JPMorgan Chase has predicted a 60% chance of recession by 2020, and it’s not clear how traumatic an event it will be.

    JPMorgan signed a deal with Plaid for customer data sharing (Business Insider) Rated: A

    JPMorgan on Monday signed an agreement with Plaid, a technology company that connects bank accounts with fintech apps like Robinhood, Venmo, and Acorns, that will give its customers better control over their personal data.

    Plaid will access JPMorgan’s customer data through a secure application programming interface or API, allowing customers to share their financial information more easily and safely. Banks including JPMorgan have pushed back against so-called screen scraping, another way for fintech apps to companies to access customer data that generally is viewed as less secure.

    Goldman shifts Marcus digital bank to its wealth unit (American Banker) Rated: A

    Goldman Sachs Group is shifting a heavily touted business line into its wealth management unit as the bank eyes expansion through products that can be pitched to the division’s customers.

    The firm is handing oversight of the Marcus business — its retail-banking effort, which offers personal loans online — to its $1.5 trillion investment management division, according to a memo seen by Bloomberg. The move is aimed at starting new business offerings under the Marcus brand that can be sold to the unit’s expanding roster of clients.

    A spokesman for Goldman Sachs confirmed the contents of the memo.

    U.S. ‘Unbanked’ Population Continues to Fall (Wall Street Journal) Rated: A

    The number of U.S. households without a bank account fell to 6.5% in 2017, according to a federal government survey, as the improved economy helped bring mainstream banking services to more people.

    The Federal Deposit Insurance Corp. said Tuesday the number of ”unbanked” households reached its lowest level last year since the regulator began the biennial survey in 2009. The share of households without an account at a federally insured financial institution was down half a percentage point from 7% in 2015.

    We’re Closer Than you Think to Autonomous Finance (Lend Academy) Rated: A

    Autonomous finance isn’t a well known term within fintech, but it may be the biggest innovation in the consumer finance space in recent years. Ken Lin, the CEO and Co-Founder of Credit Karma talked with us recently on the Lend Academy podcast about this concept of autonomous finance, a concept that is slowly turning into reality.

    Credit Karma is in the unique position to capitalize on this idea, particularly when it comes to the lending business, which still relies heavily on credit scores. The company has built a platform in which users can track their credit score over time and get suggestions on products based on their financial life. From my perspective Credit Karma has a monopoly of sorts on this business with no other serious competitors at scale. Due to their sheer size and the engagement with their members, Credit Karma is a significant lead generator for the major online lenders that exist today.

    New UltraFICO score stokes concerns about data privacy (American Banker) Rated: A

    A new credit score that includes a consumer’s cash flow alongside their credit score — dubbed UltraFICO — is winning praise for its potential to help expand access to credit but also stoking concerns about its data privacy implications.

    FICO announced this week that it is testing a new credit score with Experian and data aggregator Finicity that draws on several months’ worth of data from consumers’ bank accounts. The idea, according to FICO, is to create a “second chance” score that could allow consumers who’ve been denied credit due to the traditional model another shot at obtaining it.

    Short on Cash? Use Your Employer as a ‘Payday Lender’ (Nerd Wallet) Rated: A

    In recent years, startups from Silicon Valley and beyond have stepped up to offer payday alternatives through the workplace. Some, including Earnin and PayActiv, have put a new twist on the two-week pay cycle to give people access to their wages as soon as they’ve earned them. Others, such as HoneyBee, SalaryFinance and TrueConnect, allow employers to offer low-cost emergency loans as an employee benefit.

    Paycheck advances in the modern workplace

    What technology companies like Earnin and PayActiv say they offer is a streamlined approach for employees that retains the employer’s traditional two-week pay cycle.

    Navient eyes end of non-compete with Sallie Mae in January (Asset Securitization Report) Rated: A

    Navient Corp. has been ramping up origination of refinance student loans even as rising interest rates reduce the potential savings for borrowers. Earnest, the online lender it acquired late in 2017, originated $903 million of refinance loans in the third quarter, bringing year-to-date originations $2 billion. But so far, the servicing giant’s ability to expand has been limited because of a non-compete agreement with the largest private student-lender, SLM Corp., better known as Sallie Mae.

    Under the terms of their split in 2014, Navient is unable to refinance either private student loans made by Sallie Mae or any federally guaranteed student loans held by Sallie Mae.

    The non-compete clause expires in January, and Navient CEO Jack Remondi doesn’t plan to waste any time. On a third quarter conference call Wednesday, Remondi made it clear that he sees plenty of potential to refinance loans made or held by Sallie Mae.

    Kabbage Extends Access Of Small Business Lending (Benzinga) Rated: A

    Kabbage is now lending over $10 million per day to small businesses, in congruence with the company’s recent addition of 30,000 customers in 2018. The company reported its first $500 million quarter this year, according to the press release.

    The lender serves up to 1,400 businesses daily and has demonstrated a 68 percent increase of working capital accessed by Kabbage on mobile devices, as well as a 283 percent growth in use of the Kabbage Card since 2017.

    “It was a great growth quarter for the company, and is a direct result of developing flexible and convenient solutions that simplify accessing capital for small businesses,” Kabbage CFO Scott Rosenberg told Benzinga.

    Beyond Kickstarter: 10 Niche Crowdfunding Platforms for Startups (Entrepreneur) Rated: A

    1. CrowdStreet

    If you’re building a real-estate investment business — or developing real-estate projects — check out the online crowdfunding opportunities on CrowdStreet.

    4. FundThatFlip

    If your business is remodeling and reselling homes, FundThatFlip offers a place to get quick cash to fix up and resell. Investors put in a minimum of $5,000.

    Guaranteed Rate Ranks as the Best Mortgage Lender for Online Mortgage Service by U.S. News & World Report (Bankless Times) Rated: A

    Guaranteed Rate, an industry leader in technological innovation, tops the list of the Best Mortgage Lenders of 2018, according to U.S. News and World Report. The Chicago-based retail mortgage lender was named the Best Lender for Online Service with its groundbreaking advances to make the mortgage experience fast, simple and secure with its digital platform.

    US News & World Report recommended the Guaranteed Rate mortgage process as best for borrowers who:

    • Want to complete most of the mortgage process online
    • Want help figuring out the right product for their situation
    • Want access to a variety of home loan options

    Bought Mega Millions Tickets? Here’s What You Could Have Made If You Invested That Money Instead (Time) Rated: A

    Americans spend a lot of money playing the lottery. Approximately 370 million lottery tickets were sold between Saturday and Tuesday before the Mega Millions drawing, according to a lottery official. The U.S. generated nearly $73 billion in lottery sales in 2016 and CNN reports that in 2017, U.S. residents spent about $73.5 billion on tickets. The average American spends about $223.04 per year on lottery tickets, loan marketplace LendEDU found in a report that calculated its average by dividing the 2016 lottery revenue by the U.S. population (325.7 million).

    Milwaukee, Cincinnati and Minneapolis Are the Most Promising Places to Open a Restaurant (PR Newswire) Rated: A

    LendingTree, the nation’s leading online loan marketplace, today released its study on the best cities to open a restaurant. The study found that while traditional foodie destinations like New York and San Francisco are saturated with restaurants, up-and-comers have room to grow. The restaurant population in cities like MilwaukeeCincinnati and Minneapolis cities is less dense than in other areas, and labor costs are lower.

    LendingTree analyzed the 50 largest U.S. cities to see which offer prospective restaurateurs the best shot at success. Many top spots are in once-overlooked Midwestern cities now experiencing urban renewal. The least promising cities have historically been the restaurant industry’s most competitive.

    Nav and Clover Partnership Streamlines Access to Business Credit Scores & Financing (PR Newswire) Rated: A

    Today, Nav and Clover, a subsidiary of First Data, formally announced an integrated, multi-year partnership to deliver U.S.-based Clover users access to their free business credit scores, as well as custom-tailored business financing and credit card options.

    The Federal Reserve Bank and other surveys consistently report around 70 percent of small business loan applicants are denied by their bank. As credit data is a primary way that banks and other financial institutions evaluate business loan applicants, the integration of business credit scores and insights directly into Clover’s dashboard enables these merchants to manage this important data.

    Memorial Healthcare System Taps ezCarePoint to Provide Instant Online Financing for Patients’ Out-of-Pocket Medical Costs (AP News) Rated: A

    Patients at facilities run by South Florida’s Memorial Healthcare System (MHS), one of the nation’s largest public healthcare systems, can now easily and quickly finance their out-of-pocket medical fees online, thanks to a new program powered by ezCarePoint, a next generation medical financing technology platform created by ezVerify, a Sunrise, Fla. based company and LendingPoint, a Kennesaw, Ga. based company.

    RealtyFolio Updates Its Platform for a Big 2019 (PR Newswire) Rated: B

    RealtyFolio, the online real estate investing platform has updated its interface, including a redesign, rebrand, and upgraded features. The upgrade was meant to “make it even more comfortable for clients to navigate the platform and for clients to be able to invest in real estate projects, quickly and easily,” according to the company’s CEO, Jonathan Klein. He went on to say that they “expect a very big year in 2019, with many projects in the works, and a lot of demand from clients.”

    RealtyFolio is ushering in the future of real estate investing by allowing you to build a real estate portfolio online. With over 30 years of real estate investing and management experience on its team and a vast network of strategic partners across the United States, in cities such as New YorkMiami and Los AngelesRealtyFolio gives everyone a chance to swim with the sharks.

    Tamarack Hires Seven and Expands Headquarters (ELFA) Rated: B

    Tamarack, a leader in providing independent software solutions in the equipment finance and commercial lending industry, has moved to a new headquarters in the North Loop, doubling their space, and added seven new positions over the past three months to meet the growing demand.

    With over 25 years of Leasing and Lending experience and an expert in InfoLease®, Tamarack hires on George Burke. Burke adds extensive experience to Tamarack’s back office software engineering team.

    White Oak ABL Appoints Griffith to Managing Director (ABL Advisor) Rated: B

    White Oak ABL, LLC, an affiliate of White Oak Global Advisors, LLC, announced the appointment of Clark D. Griffith to Managing Director, based in San Francisco. Griffith joins from Encina Business Credit where he held the position of Senior Managing Director in charge of West Coast originations, offering lines of credit and term loans from $5 million to $50 million.

    PNC to offer online business loan option in 2019 (Delaware Business Now) Rated: B

    PNC announced that in 2019 it plans to begin offering fully digital business lines of credit, up to$100,000.

    PNC will partner withOnDeck and use its Platform-as-a-Service to simplify and accelerate the conventional lending originations processes for PNC Bank’s small and medium-sized business customers.

    PNC will combine its expertise with ODX’s online origination technology and professional services to create PNC Small Business Lending.

    TickPick Announces Affirm Partnership, Expands Payment Options at Checkout (PR Newswire) Rated: B

    TickPick, the no-fee ticket marketplace that is transforming the industry, announced today a partnership with Affirm, the company founded by entrepreneur Max Levchin to provide fair and honest alternatives to traditional credit. This new payment option makes TickPick the first and only secondary marketplace to offer Affirm, which allows customers the ability to spread out the cost of their purchase over time through simple monthly payments.

    United Kingdom

    Funding Circle’s broker channel reaches £1bn lending milestone (Bridging and Commercial) Rated: AAA

    After four consecutive record-breaking quarters, the in-house broker team has supported the growth of 9,600 British businesses.

    Prior to the lending milestone, the P2P platform promoted Tom Shave to head of broker.

    Tom has assisted in developing a diverse network of introducers, big and small, across the country.

    UK regions come to the fore in producing $ 1bn tech companies (London Loves Business) Rated: A

    The UK’s leading tech clusters are competing head to head with European capitals, according to new analysis of company growth, in a sign that the success of the UK tech sector is pushing far beyond its London heartland.

    Following the IPOs of Farfetch and Funding Circle, the UK is now home to 15 unicorns and six cities have produced so-called unicorns – $1bn tech companies – according to research prepared for Tech Nation and the Government’s Digital Economy Council by venture capital analytics company Dealroom.co. This latest research is published ahead of the Secretary of State for Digital, Culture, Media and Sport’s first meeting with the Digital Economy Council on 24 October 2018.

    Looking at the creation of $1bn tech companies, Oxford and Cambridge combined have produced more fast-growing tech companies than both Paris and Berlin.

    China

    Loss-Making China Rapid Finance Limited (NYSE:XRF) Expected To Breakeven (Simply Wall St News) Rated: AAA

    China Rapid Finance Limited’s (NYSE:XRF): China Rapid Finance Limited, through its subsidiaries, provides a consumer lending marketplace for lenders and borrowers in the People’s Republic of China. The US$156m market-cap posted a loss in its most recent financial year of -US$122m and a latest trailing-twelve-month loss of -US$49m shrinking the gap between loss and breakeven. As path to profitability is the topic on XRF’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for XRF.

    European Union

    Klarna Talks Split Payments at Money2020 Conference (Cheddar) Rated: A

    Klarna is launching a new ‘Slice it in 4’ product, allowing users to split up payments. Michael Rouse, chief commercial officer of Klarna, explains how it works.

    INDOCHINO Chooses Klarna to Give Consumers the Power to Pay Over Time (PR Newswire) Rated: B

    INDOCHINO shoppers can now Slice it at the checkout by using Klarna’s online consumer financing to easily spread the cost of their purchase over 6-36 months. Slice it has a simple 4-step credit application process, real-time decisioning and is offered within the merchant’s own website – no re-directs – for a frictionless and fast purchase experience.

    By taking the premium made-to-measure experience direct to the consumer, INDOCHINO has created a superior alternative to off-the-rack clothing at ready-to-wear prices. Their immersive multi-channel experience enables customers to order their custom garments with ease online or in-person at one of 30+ showrooms across North America

    German fintech poster child N26’s major security gap (Handelsblatt) Rated: A

    Germany’s fintech darling N26 is potentially vulnerable to money laundering and terrorism financing, according to research by Handelsblatt’s sister magazine WirtschaftsWoche, which exposed a security gap at the online banking startup.

    The apple of discord is how easily someone can open an account with a fake ID. A WirtschaftsWoche correspondent saw first hand how a man, Milo T., scanned a friend’s ID, added his own passport photo to the ID, printed it out and stuck it atop of a white plastic card that was the same size as the office ID card in his country. He cut the edges to make them round and voilà: a new identification card.

    It took five minutes and the result is so blatantly a forgery that it would fail to convince even the laxest of nightclub doormen. None of the holograms or other security features found on original IDs can be seen on the fake. Regardless, Milo effortlessly used this ID to set up an N26 account, and this wasn’t a one-off occurrence. WirtschaftsWoche documented how several people opened N26 accounts using forged papers.

    Robo.cash welcomes new loan originator (Peer2Peer Finance  News) Rated: B

    LATVIAN peer-to-peer payday lender Robo.cash has added a loan originator from Kazakhstan to its platform.

    Z-FINANCE provides short-term private lending in Kazakhstan with an average loan size equivalent to €60 (£52).

    Investors on the Robo.cash site can now invest in these loans, which have a repayment period up to 30 days and an expected interest rate up to 12 per cent per annum.

    Z-FINANCE was launched in July this year and currently lends through a network of 102 sales branches in Kazakhstan.

    International

    ID Finance Group reports 61% revenue growth for the nine months of 2018 (Fintech Finance) Rated: AAA

    ID Finance Group has reported 61 per cent revenue growth and revenues of $141.3 million for nine months of 2018 following strong growth in Europe and Latam. The data science, credit scoring and digital finance company issued $215.7m in loans in the first nine months of the year, a 64 per cent increase on the same period last year.

    Its European and LatAm operations comprising Spain, Poland, Brazil and Mexico demonstrated exceptional growth experiencing a 197 per cent revenue growth and revenues of $32.6 million for the nine months of 2018. It issued $63.8 million in loans, a 142 per cent increase on the same period last year, and has also grown its customer base to over one million registered users with 20,000 new users joining weekly.The Group has now separated its European and LatAm operations from its CIS businesses (comprising Russia, Kazakhstan and Georgia) and it is functioning as a separate entity under the ID Finance name.

    Moven Enterprise Expands Availability of AI Smart-Banking Solution with Global Launch (Business Wire) Rated: A

    Moven Enterprise, the smart-banking solutions division of Movencorp, Inc, today announced that it has expanded its footprint globally to help banks deepen their digital customer engagement and drive new revenue streams while significantly reducing attrition and acquisition costs.

    After working successfully with TD Bank (TD) in Canada, Westpac in New Zealand, and others, Moven is now bringing its AI-driven digital banking platform to banks across LatAm, APAC, Africa, the Middle East and Europe. The global expansion is well-positioned as Moven Enterprise received investment from SBI Group to enhance Moven’s footprint in Asia earlier this year. This included the formation of a joint venture, SBI Moven Asia. The company’s innovative platform leverages a bank’s data and uses proprietary algorithms to create contextual, individualized smart-banking experiences for consumers; providing them the right advice at the right time with the right offer and helping them move towards a better financial lifestyle.

    The Complete Beginner’s Guide to Becoming a Private Lender—Pros & Cons (NuWire Investor) Rated: A

    Private lending has picked up the pace in recent years. This is despite high-interest rates charged by private lenders. Many reasons have pushed lenders into this space including tightened requirements by banks.

    In addition, banks tend to shy away from lending money to small businesses and startups. As a result, many borrowers look for other ways of funding, and such opportunities provide opportunities to private lenders.

    However, starting out as a private lender is no easy walk in the park. Numerous risks lurk in the business, and you need to tread with caution. In this article, you’ll learn how to become a private lender and some of the pros and cons involved, so if you have an interest in becoming “a bank,” read on.

    Fintech Streamlines Socially Responsible Impact Investing Via Robo-Advisors (Investor Place) Rated: A

    What makes an investment socially responsible? There are several criteria. For instance, SRI investing avoids tobacco companies as their products cause health problems and death. Typically, a company’s social responsibility rating is based on its performance in three categories: environmental, social and governance (ESG). Positive practices across one or more of these spheres can land a company in the socially responsible category.

    At the same time, robo-advisors are digital investment managers designed to grow your wealth through investing with models are based on sophisticated computerized algorithms, including ESG consideration. These fintech darlings have answered the call for socially responsible robo-advisors with a host of diverse options. Of course, you could choose a socially responsible mutual fund or ETF on your own. But, for the busy investor, let one of the many robo-advisors take charge of your investing, in line with your personal values.

    Uphold Joins Crypto Lending Platform Cred for New Lending and Earning Solutions (Coin Speaker) Rated: A

    In today’s business community, partnership has become one of the most promising tools on the way to new amazing developments and interesting projects that are aimed at offering customers really unique experience and opening new opportunities for them.

    News about recently established collaborations regularly appears here and there. This time the headlines are made by Uphold which is a major global digital money platform, that has conducted transactions worth over $4.0 billion across 184 countries, and Cred that is a crypto-backed lending provider with over $250 million in credit facilities.

    Joint Projects

    Having announced their partnership Uphold and Cred have revealed their plans to launch two cutting edge blockchain-based consumer finance products: Uphold Earn and Uphold Borrow. Both products are aimed at helping customers to earn interest from stablecoin holdings and borrow money against the cryptocurrencies they have.

    India

    Indian P2P Lending Operators forms Association to Make P2P Industry More Credible (Indian Web2) Rated: AAA

    After the Reserve Bank of India unveiled guidelines last October recognizing the need for peer-to-peer lending platforms as NBFC-P2P in the country, the regulatory authority had issued first license in May 2018 and since then 9 players have been recognized as NBFC-P2P companies. More than 12 companies are in the process of getting approval from the regulatory authority. Some of them are at advance to mid-level stage.

    To represent the NBFC-P2P industry at various front as well as to represent country’s P2P lending industry at international forums, most of existing & new players have teamed-up and formed a registered body – Association of NBFC P2P Platforms.

    The association has been registered under The Society Registration Act, 1860. Mr. Pramod Akhramka has been elected as President, Mr. Rajiv Ranjan as Secretary and Mr. Mukesh Bubna as Treasurer of the association.

    Choose bank or online lender based on nature of loan (DNA Online) Rated: A

    Unexpected expenditures often come knocking on your door when you want them the least. The reasons could range from maintenance for your vehicle to your old washing machine that needs to be replaced. The plus point of such expenses cropping up during the festive season is that you can always get a good bargain online (or at the store nearby). The fact still remains that these are expenses nevertheless. And that too when your festive expenditure is already lined up, leaving no financial bandwidth.

    At times like these, loans bring a sigh of relief. But with so many options available in the market, whom should you approach with your loan requirement- banks or digital lending platforms?

    Today, Indian consumers are benefitting from a range of financial products and financial institutions (FI) such as banks, non-banking finance companies, online lending platforms, etc, available at their disposal. If you are planning to take a loan or feel like there’s a possibility of availing the same in the near future, you must primarily understand that every lender has its own unique pros and cons. Some are quick in terms of loan approval and disbursal, some are cost-effective, some offer greater flexibility to their customers, while some offer innovative products that are more relevant for an applicant.

    Authors:

    George Popescu
    Allen Taylor

    Tuesday October 23 2018, Daily News Digest

    FREED Upgrade bond characteristics

    News Comments Today’s main news: OnDeck to add PNC to ODX platform. FICO to add alternative data to credit score. PeerStreet named to CB Insights Fintech 250 list of fastest-growing fintech startups. Lendy asks for help. Pintec Technology shoots for $41M IPO. Today’s main analysis: Zelle sees record earnings, FREED 2018-2 and UPGR 2018-1 compared. Today’s thought-provoking articles: Funding […]

    FREED Upgrade bond characteristics

    News Comments

    United States

    United Kingdom

    India

    Other

    News Summary

    United States

    OnDeck Announces PNC Will Be The Second Bank On The ODX Platform (Lend Academy) Rated: AAA

    It was back in December of 2015 that we first learned about OnDeck’s partnership with JPMorgan Chase. This was the first significant partnership between a large American bank and an online lending platform and it caused a lot of excitement in the industry back then.

    A couple of times this year we have heard OnDeck CEO Noah Breslow hint that a second major bank was coming on as a partner soon. Today, we learned who that partner will be: PNC Bank. They are the ninth largest bank in the country, so this gives OnDeck two of the top ten largest banks as clients.

    I caught up with Noah and Brian Geary, who heads up OnDeck’s new ODX division (we covered the story of ODX just last week) to talk about this new deal.

    FICO Plans Big Shift in Credit-Score Calculations, Potentially Boosting Millions of Borrowers (Wall Street Journal) Rated: AAA

    Credit scores for decades have been based mostly on borrowers’ payment histories. That is about to change.

    Fair Isaac Corp., creator of the widely used FICO credit score, plans to roll out a new scoring system in early 2019 that factors in how consumers manage the cash in their checking, savings and money-market accounts. It is among the biggest shifts for credit reporting and the FICO scoring system, the bedrock of most consumer-lending decisions in the U.S. since the 1990s.

    PeerStreet Named to the 2018 CB Insights Fintech 250 List of Fastest-Growing Fintech Startups (Business Wire) Rated: AAA

    PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that it has been named to the second annual CB Insights Fintech 250 list, a prestigious group of emerging private companies working on groundbreaking financial technology. This comes on the eve of PeerStreet’s third anniversary of opening to the public. PeerStreet opened to all accredited investors on October 30th, 2016 at Money 20/20, an annual conference which is happening this week in Las Vegas. Both PeerStreet founders Brew Johnson and Brett Crosby are in attendance.

    PeerStreet is being recognized as a leader in real estate investing for the platform’s innovative approach to making real estate debt an accessible asset class for retail investors. The loans offered for investment are vetted by private lenders who know their communities well, and then again by PeerStreet’s own team using big data and market research.

    Marcus Slows Lending Growth, Zelle vs Venmo, Freedom & Upgrade Deals (Peer IQ) Rated: AAA

    Bank of America – Record Earnings and Results for Zelle

    BofA’s earnings were boosted by the highest Net Interest Income since 2011 delivered by its Lending business.

    BofA also saw P2P payments rise on its Zelle platform increase 138%. Venmo, over the last year, has been on the defense due to increased consumer fees and leadership changes. SnapChat’s payment service was discontinued. Tech firms such as Google, Facebook, Tencent, and Ant Financial continue to test payments in overseas markets like India (where it is easier for FinTechs to utilize payments rails).

    MS remains laser-focused on growing asset management and lending (secured and warehouse lending) and delivered the best stock price performance post earnings. The stock gained 5.7% post-earnings.

    Source: Bank Earnings, PeerIQ

    Freedom (FREED 2018-2) vs Upgrade (UPGR 2018-1)

    Below we compare these deals on their collateral composition, bond characteristics and triggers. We note that each lender has substantially different lending programs, credit risk profiles, and history – and that shows in terms of deal structure and execution.

    Collateral Composition

    FREED 2018-2’s collateral pool consists of 2 types of loans – 45.5% Freedom Plus (F+) and 54.5% Consolidation Plus (C+).

    F+ Loans: F+ loans are unsecured consumer loans to near prime and prime borrowers. F+ collateral has a WA age of 3 months and WA remaining term of 46 months. The WA current FICO score of the pool is 713 and the WA interest rate is 16.2%.

    C+ Loans: C+ loans are offered to select qualified debt settlement clients as an option to shorten the duration of their debt settlement program by making funds available immediately to fund settlements reached by Freedom Debt Relief. C+ collateral has a WA age of 8 months and WA remaining term of 45 months. The WA current FICO score of the pool is 562 and the WA interest rate is 22.9%.

    UPGR 2018-1’s collateral pool consists of unsecured consumer loans. The collateral has a WA age of 2 months and WA remaining term of 41 months. The WA current FICO score of the pool is 691 and the WA interest rate is 15.9%.

    Freedom’s C+ loans have the highest weighted average coupons and original loan terms among all the pools, and Freedom’s F+ borrowers have the highest weighted average credit scores. The higher weighted average coupon on C+ loans helps the deal generate significant excess spread.

    Source: Ratings Agencies, PeerIQ
    Source: Ratings agencies and Peer IQ

    Identity Risk Scoring from Socure Helps Radius Bank Reduce Online Fraud (Finovate) Rated: A

    partnership between AI-powered identity risk scoring innovator Socure and workflow management specialist Alloy has enabled Radius Bank to decrease online fraud by 50%, increase new account conversions by 30%, and make manual review nearly a process of the past – reducing it by 95%.

    The joint solution marries Socure’s predictive analytics with Alloy’s decisioning engine, and adds a variety of on- and offline data sources, predictive fraud tools, and a flexible rules engine to enable real-time decisioning and onboarding for new account openings.

    Plaid is seeking funding at a $ 2 billion valuation (Business Insider) Rated: A

    Plaid, a fintech company whose software is used by Silicon Valley heavyweights like Betterment, Coinbase, and Robinhood, is holding talks with potential investors about raising money that could value the firm at more than $2 billion, according to people familiar with the matter.

    The fundraise is still in the early stages, the people said, and a formal deal with investors has yet to be finalized.

    In April, Forbes reported that the company’s private valuation was $1 billion — meaning that Plaid, which counts 10,000 banks among its customers, could see its valuation double in less than six months.

    Klarna Pairs up With Rancourt to let Shoppers pay Over Time (PR Newswire) Rated: A

    Today at Money20/20 in Las Vegas, Klarna, a leading global payments provider, introduced their Slice it in 4 payment option, which allows consumers to pay for purchases in installments using their own debit or credit card. In conjunction with the launch, Klarna has signed its first U.S. merchant, Rancourt & Co., premium leather shoe crafters, to use the offering.

    In today’s market, 67% of U.S. millenials do not own a credit card. With Klarna’s Slice it in 4, shoppers can increase their purchasing power without the hassle of a credit agreement or long-term commitment. Four equal payments are automatically collected from the consumer’s chosen method of payment – one installment at purchase and three further payments every two weeks. The plan features no upfront costs or interest and is offered online within the merchant’s existing checkout – ensuring the purchase journey is frictionless with no redirects to other sites.

    The cost of fraud rises 8.1 percent, year over year, for U.S. lenders, according to LexisNexis Risk Solutions study (PR Newswire) Rated: AAA

    Today, LexisNexis Risk Solutions, a part of RELX Group (NYSE: RELX), released its 2018 True Cost of Fraud study on lending. The 2018 study, which surveyed 186 risk and fraud executives at various lending institutions, including mortgage companies, auto lenders, non-bank personal loan issuers, non-bank credit card issuers and finance companies, highlights the continued rise of fraud costs for U.S. lenders. According to the LexisNexis Fraud Multiplier℠, for every dollar of fraud, lenders incur $3.05 in costs, compared to $2.82 in 2017, an 8.1 percent increase. Larger digital lenders, with at least $50 million in annual revenue, are hit hardest by fraud, incurring $3.37 in costs, which is up from $3.07 in 2017.

    Other key findings from the study include:

    • 54 percent of risk and fraud executives at large digital lenders state that verification of customer identity is their largest challenge. This is especially true of verification through the online channel.
    • Lending firms that use a multi-layered solution approach experience a lower cost of fraud. Those who layer core + advanced identity authentication + advanced transaction / identity verification solutions have lower fraud costs than others, per fraud event ($2.63 for every $1 of fraud versus up to $3.47) and as a percent of annual revenues. They also tend to have a lower volume of false positives.
    • Large digital lenders with international transactions attribute nearly 40 percent of their fraud losses to their non-domestic business. Fraud that originates in Asia represents 57 percent of the total international fraud expenses for these lenders.
    • Large digital lenders are more likely to represent “best-in-class” thinking about the adoption of fraud mitigation solutions, as they face attacks that are more significant.

    Small Businesses Need Their Bankers More Than They Realize (Nasdaq) Rated: A

    It’s easy to see why entrepreneurs are bonding with alternative lenders. What’s not so easy to see is why they’re leaving bankers out of the loop. However, with renewed trust in each other, both institutions are finding mutual benefits. What’s more — the B and B called “Business and Bankers” is finding a renewed comeback.

    Say you’re a small business owner feeling the squeeze. You could turn to a traditional bank that requires loan applicants to go through a rigorous review process for a 20 percent chance of approval. Or you could apply online with a peer-to-peer firm that approves more than 60 percent of applications and receive a decision in minutes.

    MoneyLion Announces America’s Most Powerful and Rewarding Financial Membership (Business Wire) Rated: A

    MoneyLion, the innovative financial platform offering consumers a better way to borrow, save, earn and invest, today officially launched America’s most powerful and rewarding financial membership to help people take control of their finances and achieve their dreams.

    In support of the most powerful financial membership, MoneyLion will be launching the Financial Heartbeat as well as a comprehensive suite of premium banking products to help everyday Americans better understand and engage with their finances.

    Study Shows Student Debt Can Kill 75% of Millennials’ Average Net Worth (Magnify Money) Rated: A

    As of 2018, outstanding student loan debt in the U.S. surpassed $1.48 trillion, almost one-and-a-half times what Americans owe on credit cards.

    According to a MagnifyMoney analysis of Federal Reserve data, all this debt is hampering millennials’ chances for long-term financial success.

    In fact, this study revealed that the average net worth of a millennial with student loans is only 25% of the net worth for a fellow millennial without them. What’s more, the data suggest student loan debt is preventing some millennials from saving for retirement or buying homes.

    Key facts

    Millennial households with student loan debt have…

    • An average net worth of $29,087, compared with $114,376 for student loan-free households.
    • 46% less in their savings and checking accounts (median balance of $5,500 vs $10,180 for those without student loans).
    • $21,160 in retirement savings versus an average of $39,905 for those with no student loan debt.

    HSBC gets back into US consumer lending (Financial Times) Rated: A

    HSBC is getting back into US consumer lending almost a decade after it was forced to write off $10.6bn for its last foray into that market.

    The UK banking giant said on Monday that it is launching a digital lending platform for US customers in the first half of 2019. The platform will be powered by online lender Avant, which has already processed almost $5bn of loans for more than 600,000 customers.

    Transparency, career development and — a puppy button? Here’s how OppLoans shapes its culture (Built in Chicago) Rated: A

    OppLoans CEO Jared Kaplan likes to stress that a company can’t responsibly serve its customers without creating an inclusive atmosphere for its employees first.

    That’s why OppLoans promotes from within and supports career development with ongoing education initiatives. We spoke with Kaplan and two other leaders at the company to learn more about what they do to ensure their team feels truly valued.

    How would you describe your leadership style?

    My leadership style follows a few key principles: rule by motivation, not fear; drive a high-performing culture and reward the top performers; and enable ultimate transparency. If employees are excited to come to work, see clear development paths when they perform and understand the good and bad of the business, I’ve created a great place to work.

    We also ensure a workplace where everyone is encouraged to speak their minds when they see opportunities to improve the business.

    Hundy Launches Mobile App Turning High Cost Payday Loans Into Low Cost Friends & Family Loans (Hundy Email) Rated: A

    Hundy, a peer-to-peer micro-lender that empowers the creditworthy to benefit from their good character, announced today at Money 20/20 that it has released the latest update to its lending platform enabling friend-to-friend lending for a low 1% fee. Now, even borrowers who don’t pass a credit check, will be able to request a loan from a friend or family member utilizing all the tools of the platform including signed loan documents, SMS and email reminders, and automated payment scheduling. Hundy was designed to foster community around a marketplace of borrowers and lenders whose participants benefit from transparent terms, wide availability and low prices.

    Gary Beasley of Roofstock (Lend Academy) Rated: A

    Investing in real estate has been around for centuries but it is only in the past few years that it has become possible to do this remotely and at scale. While institutional investors have had lots of options individual investors have been limited, for the most part, to buying homes in their local area.

    Our next guest on the Lend Academy Podcast is Gary Beasley, the CEO and co-founder of Roofstock. Gary and his team have created the first online platform for investing in single family homes across the US. They help investors select the homes, obtain financing as well as find tenants and property managers.

    OCC still ready to grant special fintech charters despite state lawsuits (Lexology) Rated: B

    The OCC is still moving forward with plans to grant Special Purpose National Bank charters to qualifying non-depository financial technology firms, notwithstanding a lawsuit challenging the move from New York state regulators and the threat of additional litigation. In response to a question following her speech at the October 9 Online Lending Policy Institute conference, Grovetta Gardineer, OCC’s senior deputy comptroller for compliance and community affairs, said the OCC will accept applications from fintech companies seeking the SPNB charter and intends to grant charters to applicants meeting the criteria. As reported in the October 8 edition of Bank Regulatory News and Trends, the New York State Department of Financial Services filed suit against the OCC, challenging the federal agency’s authority to grant the charters. The Conference of State Bank Supervisors also signaled its intention to file suit against OCC over the charters.

    Princeton Alternative Income Fund’s Independent Restructuring Officer Rejected by Ranger Direct Lending (PR Newswire) Rated: B

    Princeton Alternative Income Fund’s (PAIF) latest attempt to resolve its bankruptcy dispute by appointing an independent restructuring officer was rejected by Ranger Direct Lending (RDL.L)(RDLZ:LN) last week.

    The fund proposed hiring respected former United States Bankruptcy Judge Donald H. Steckroth as an independent officer to oversee the fund’s restructuring to protect all its investors. The executives at Ranger had demanded the appointment of an independent officer earlier in the bankruptcy process only to reject it this week.

    CrowdOut Capital Continues Expansion With New Hires (Business Wire) Rated: B

    CrowdOut Capital LLC, a pioneer in non-bank private lending for growing middle market companies, today announced two new additions to its management team, Christina Gustavson and Darlene Esquivel.

    Gustavson will be CrowdOut’s first controller. She brings a strong accounting background having worked as a senior accountant at C3 Entertainment and at RGM Advisors, an Austin-based quantitative trading firm. A licensed CPA, Gustavson earned a Bachelor of Science in Accounting from Texas State University.

    United Kingdom

    Funding Circle Q3 2018 Update (Proactive Investors) Rated: AAA

    Funding Circle Holdings plc (“Funding Circle” or the “Company”), the leading small and medium enterprise (“SME”) loans platform in the UK, US, Germany and the Netherlands, today announces updates to its statistics pages for the three months ending 30 September 2018 (the “Quarter”) and selected highlights from the quarter.

    The data by country included in this announcement is also available on the Company’s website at corporate.fundingcircle.com/investors/loan-performance-statistics.

    Source: Proactive Investors

    UK peer-to-peer lender asks regulator for help (Financial Times) Rated: AAA

    A British peer-to-peer property lender has taken the unusual step of appealing to its regulator for help after one of its biggest borrowers threatened to sue the company and many of its investors.

    Retail investors in Lendy are already facing tens of millions of pounds in potential losses after almost two-thirds of borrowers failed to repay their loans on time, according to a Financial Times analysis of its loanbook.

    The developments threaten to trigger the first big crisis in Europe’s rapidly expanding peer-to-peer industry, at a time when the sector is fighting to convince regulators it does not need stricter regulation.

    Peer-to-peer lending growing in popularity (Computer Weekly) Rated: A

    P2P lending is becoming a significant alternative source of financing for SMEs in the UK. According to Entrenching Innovation – The 4th UK alternative Finance Industry Report, published in December 2017, P2P business lending grew from £21m in 2011 to £1.23bn in 2016, generating £3.14bn over the six years. The report noted that the annual growth rate in volume from 2015 to 2016 was 40%.

    The report cited data from the British Banking Association that revealed P2P business lending equated to 15% of new small businesses loans. More than a fifth of borrowers had a turnover of less than £500,000 and 23% were in the £500,000 to £1m turnover bracket. It also found that lenders were biased towards localised funding. This diversity of lending across the UK suggested that P2P business lending could become “a suitable solution to systemic geographic biases that exist in traditional and bank SME lending”.

    The UK extends its lead as Europe’s established tech unicorn capital (City AM) Rated: A

    London has cemented its standing as the capital of Europe’s billion-dollar technology startups, as surrounding cities help to push the UK forward while its companies expand internationally.

    New figures released today show the UK has now created 60 so-called unicorn startups – companies with a valuation of $1bn (£769.6m) or more – since 1990, according to research prepared for Tech Nation and the government’s Digital Economy Council by Dealroom.

    London houses 36 of those UK startups, representing more than a fifth of all unicorns in Europe at a total valuation of $132bn. In comparison, Berlin holds the second biggest city spot with just eight unicorn startups, worth $32bn.

    New partnership aims to encourage growth in P2P lending market (Introducer Today) Rated: A

    Landbay has chosen Oracle NetSuite to create a more accessible buy-to-let mortgage marketplace for investors, borrowers and brokers.

    Through NetSuite, Landbay will be able to process loan applications ten times faster than other lenders and enable its staff to make swifter decisions around mortgage applications and investor sign ups.

    Founded in 2014, Landbay offers individual investors direct access to the lucrative mortgage lending market and offers landlords competitively priced buy-to-let mortgages, with plans to lend £1 billion to UK landlords by 2020.

    ACORN machine rebrands to OakNorth Analytical Intelligence (Fintech Finance) Rated: B

    OakNorth Holdings Ltd today announces the launch of a new corporate brand identity, logo and website. Its fintech platform, ACORN machine, will now be known as OakNorth Analytical Intelligence (ON AI) and we have a new domain (www.oaknorth.ai).

    Rishi Khosla, co-founder of OakNorth Holdings said: “Since our founding, our mission has been to enable small and medium-sized businesses obtain the debt finance they need to grow. Our fintech platform, which we developed to address this problem, is being used by a number of leading banks globally, and by us in the UK.”

    China

    Pintec Technology Aims For $ 41 Million IPO (Seeking Alpha) Rated: AAA

    Pintec Technology Holdings (PT) intends to raise $41 million in an IPO from the sale of ADSs representing underlying Class A shares, according to an amended registration statement.

    The company provides a range of point-of-sale and related financial services and solutions to retailers and their customers.

    PT appears to be transitioning its business to more diversified revenue streams, and it faces significant regulatory uncertainties and potentially harmful trade war effects that may not be transitory.

    Peer-to-Peer Lending in China May Be Going Extinct (Barrons) Rated: A

    China’s peer-to-peer lending system may effectively vanish in the next year.

    European Union

    Lithuanian P2P Lender NEO Finance Now Seeking €200,000 Through Seedrs Funding Round (Crowdfund Insider) Rated: AAA

    NEO Finance, a Lithuania-based peer-to-peer lending platform, is now seeking €200,000 through UK’s equity crowdfunding platform, Seedrs.

    NEO Finance also reported it is the first P2P platform in Lithuania to have reached constant €1 million monthly issues.

    The lender also revealed its current stats are:

    • 5400 active lenders
    • 47,000  registered borrowers
    • €21.7 million in loans financed
    • 2017 revenue grew by 395% to €479,000
    Australia

    MBIE strongly opposed to the introduction of a comprehensive creditor licensing regime as part of government’s loan shark crackdown (Interest) Rated: AAA

    A Ministry of Business, Innovation & Employment assessment that introducing a comprehensive creditor licensing regime as part of the Government’s crackdown on loan sharks would be worse than the status quo doesn’t appear to be based on much evidence.

    The recent announcement from Commerce and Consumer Affairs Minister Kris Faafoi included plans to introduce a “fit and proper person” test for lenders.

    This means the fit and proper person test was chosen over two other options floated in June’s Ministry of Business, Innovation & Employment (MBIE) discussion paper aimed at increasing lender registration requirements. The other two options were expanded powers to deregister lenders and ban directors from future involvement in the credit industry, and introducing a comprehensive creditor licensing system.

    India

    Fintech non-performing loans under control, financial authority says (The Jakarta Post) Rated: AAA

    The Financial Services Authority (OJK) said the non-performing loans (NPL) rate among financial technology (fintech) firms that use peer-to-peer lending (P2P) hovered around 1 percent monthly, safely below the 2 percent maximal set by the OJK.

    “The NPL rate can go as low as 0.9, then rise as high as 1.3 then go down again,” said OJK fintech licensing and supervision director Hendrikus Passagi on Sunday as reported by kompas.com.

    Serial entrepreneur Satyen Kothari’s Cube Wealth raises $ 2M in Series A funding (Your Story) Rated: A

    Wealth management startup Cube Wealth announced on Monday that it has raised Rs 14 crore (about $2 million) in equity funding from Singapore-based venture fund Beenext, Japan-based Asuka Holding and 500 Startups.

    The company said that it will use these funds for additional asset partners, and to develop a network of premium sales and marketing partners across different countries including Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Kolkata and Pune.

    Cube Wealth also plans to expand its presence across Europe and Japan, as it is looking to target non-resident Indians from these markets.

    Pay for surgery via a cheaper P2P loan (Times of India) Rated: A

    If you need a loan for a medical emergency like a surgery, it might help to turn to your peers rather than institution rather than institutions. Peer-to-peer (P2P) lending platforms say they have seen lenders willing to offer interest rates between 8% and 12% for medical emergencies on their platforms. On the contrary, if you try to raise funds as a personal loan from banks, the interest rate is likely to be between 13% and 17%. P2P technology platforms bring borrowers and lenders together, and most offer a variety of  of loans, including personal loans, vehicle loans, education loans and — in some cases — even home loans. Most lenders tend to be individuals too.

    P2P players like Faircent, LenDenClub, i2iFunding and LoanTap say they also process medical loans faster.

    Asia

    Online alternative lending goes mainstream (Opalesque) Rated: AAA

    While alternative lending is currently gaining traction among borrowers, it’s also becoming a formidable asset class in its own right, with the U.S. market now accounting for an estimated $50 billion of annual origination.

    Born out of peer-to-peer lending, online alternative lending has gone mainstream, presenting new opportunities for small businesses, consumers and investors.

    According to Morgan Stanley Investment Management’s study, what began as “peer-to-peer” marketplaces bringing together borrowers and lenders has evolved considerably in recent years.

    Alternative-lending platforms now span many categories, including unsecured consumer, small-business and other forms of specialty financing, it said.

    Africa

    Local fintech start-ups bag R16m in funding (IT Web) Rated: AAA

    Prospa, a mobile savings  for low-income earners, and Nisa Finance, an invoice financing platform, are among the eight local fintech start-ups awarded a total of R16 million in funding by AlphaCode.

    AlphaCode is an incubation, acceleration and investment vehicle for early-stage financial  businesses, powered by Rand Merchant Investment (RMI).

    The AlphaCode Incubate initiative, in partnership with Merrill Lynch SA and Royal Bafokeng Holdings, identifies South African financial services entrepreneurs with extraordinary ideas and businesses that could impact the financial services industry.

    More than 200 start-ups applied to participate; of these, 16 made it to the final pitch evening and eight recipients were selected.

    Authors:

    George Popescu
    Allen Taylor

    Monday August 20 2018, Daily News Digest

    transition states

    News Comments Today’s main news: SoFi is shopping for $1B credit line. KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2018.2. Monzo headed to unicorn status. China Rapid Finance debuts up to $20M share repurchase program. Today’s main analysis: Forcasting cash flows using machine learning. Today’s thought-provoking articles: Report sheds light on early success of real […]

    transition states

    News Comments

    United States

    United Kingdom

    China

    International

    Other

    News Summary

    United States

    SoFi Eyes $ 1B Credit Line, Post Q2 Loss (PYMNTS), Rated: AAA

    Student loan refinancing company Social Finance (SoFi) is looking for a loan of its own: The company is in talks with banks to secure a revolving credit line of as much as $1 billion after posting a second-quarter loss.

    KBRA Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2018-2 (Business Wire) Rated: AAA

    Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Prosper Marketplace Lending Issuance Trust 2018-2 (“PMIT 2018-2”). This is a $500.5 million consumer loan ABS transaction.

    Preliminary Ratings: Prosper Marketplace Issuance Trust, Series 2018-2

    Class Preliminary Rating Initial Class Principal
    A A+ (sf) $335,500,000
    B BBB (sf) $59,950,000
    C B+ (sf) $105,050,000

    Forecasting Cashflows using Machine Learning, Strong Retail Sales Report (PeerIQ), Rated: AAA

    The price of a loan is the present value of the loan’s cashflows (after accounting for losses and prepayments), discounted by an appropriate discount rate:

    Source: PeerIQ

    Cashflow Modeling with Credit Models

    The inputs of a credit model are loan attributes and borrower factors such as:

    • Originator of the Loan
    • Term of the Loan
    • Interest Rate on the Loan
    • Original Principal of the Loan
    • Age of the Loan (Months on Book)
    • Loan Grade
    • Prior Loan Status
    • Borrower’s Credit Score at Origination

    The sparse transition model assumes 7 possible loan statuses which describe the performance of the loan:

    1. Current (or Status C)
    2. 1 Month Delinquent (or Status 1)
    3. 2 Month Delinquent (or Status 2)
    4. 3 Month Delinquent (or Status 3)
    5. 4 Month Delinquent (or Status 4)
    6. Default (or Status D)
    7. Paid Off (or Status P)
    Source: PeerIQ

    Once a loan arrives at a terminal absorbing state (“Defaulted” or “Paid Off”) there is no future possible transition as there are no further cashflows. Therefore, the probability of a loan remaining defaulted is 100%.

    Source: PeerIQ

    Model Calibration

    Source: PeerIQ

    PeerIQ CEO Ram Ahluwalia on OCC Fintech Charter: Consumers Win if it is Implemented Correctly (Crowdfund Insider) Rated: A

    We asked Ahluwalia who will benefit from the OCC Fintech Charter and whether it was big tech, Fintechs or other.

    “The long-term winner of the charter is the US consumer who will benefit from greater competition, innovation, and access to the financial system. New technology and entrants will also promote the dynamism and resilience of the US financial system,” stated Ahluwalia. “Payments companies that seek to compete with Visa / Mastercard also stand to benefit. Payments arms of firms like Google, Apple, Amazon, and PayPal would fit the profile, as well as large non-bank lenders that can demonstrate sustainable profitability de-risked their business models. Fintech lenders are a major winner as well as they’ll be able to compete on a more level playing field. Big technology firms have an opportunity to expand their role in financial services as well.”

    New Research Sheds Light on Early Successes  of Real Estate Crowdfunding (EquityMultiple Email), Rated: AAA

    Some of the survey’s key findings include:

    • A full 65 percent of respondents plan to allocate at least 10 percent of their portfolios to real estate crowdfunding sites, with nearly 40 percent expecting to allocate at least 20 percent
    • More than 60 percent of respondents report typical annual returns of at least 8 percent
    • Respondents considered “transparency and details with respect to investment opportunities” the most critical factor in a crowdfunding platform, exceeding all other choices, including “attentive customer service” and “diversity of investment opportunities”
    • With respect to individual investments, “geographic focus” (i.e. where a property is located) matters less to investors than “sponsor/lender experience”, the property’s upside potential or several other factors
    Source: Real Estate Crowdfunding Investor Preferences

    Read the full report here.

    Key Facts About the SBA (Email from SmartBiz Loans ) Rated: AAA

    Source: SmartBiz Loans

    Many Fintech Names on the Inc. 5000 List of Fastest Growing Companies (Lend Academy) Rated: A

    Of the 5,000 companies on this year’s list exactly 233 are in the financial services category. Below is a screenshot of the top 10 companies in this category. Leading the list is Fundrise, the real estate platform for individual investors, a name that would be familiar to Lend Academy readers (I interviewed CEO Ben Miller on the podcast last year). Another well known name is Fundera, the small business lending marketplace, who were the third fastest growing company in our category. I encourage you to explore the complete list here where you can search for specific companies or filter by industry, state and many other criteria.

    Source: Lend Academy

    Treasury’s plan to legitimize online lenders is good for small businesses (The Guardian) Rated: A

    Companies in this industry such as KabbageLending Club and BlueVine have grown significantly over the past few years by offering financing to many small businesses that otherwise would not be able to get loans. Their deals are quick to approve, rarely require collateral and are usually tied in to a customer’s financial systems for close monitoring.

    Last month, the Office of the Comptroller of the Currency announced that it was moving ahead with its plan to allow online lenders to apply for banking charters. When recognized as a bank, those types of financiers would no longer have to comply with state laws and would instead be subject to federal banking regulations. “Companies that provide banking services in innovative ways deserve the opportunity to pursue that business on a national scale as a federally chartered, regulated bank,” Joseph Otting, the comptroller of the currency, one of the country’s top financial regulators, told the Los Angeles Times.

    RPT-‘Fintechs’ sound cautious note on offer of U.S. bank charter (Rueters) Rated: A

    Financial technology companies that lend online are sounding a cautious note on a U.S. banking regulator’s plan to offer them special federal charters because of concerns over legal challenges and requirements that are more onerous than expected.

    The Office of the Comptroller of the Currency said last month it would accept applications for banking licenses from the likes of LendingClub and OnDeck Capital Inc, online lenders that do business outside the traditional banking system. They then could operate nationwide under one banking license rather than a patchwork of state-specific regulations.

    Fintech executives lobbied for the license and applauded the OCC’s decision, but they are not immediately rushing in, they told Reuters.

    CRA-like standards for fintechs could reduce access to credit (American Banker) Rated: A

    As reported in American Banker, consumer advocacy groups are concerned that financial inclusion expectations for fintechs chartered as special-purpose national banks may not perfectly mirror the requirements of the Community Reinvestment Act.

    This possibility exists because the final version of the Office of the Comptroller of the Currency’s licensing manual supplement for fintechs lacks the same level of specificity as the draft manual that was published for comment last March. Consumer advocates have been steadfast in their insistence that the substance of the CRA, which by its terms applies only to depository institutions, be applied to nondepository fintech national banks. Yet imposing CRA-like requirements on these institutions would likely result in reduced credit opportunities for low-income communities.

    Walmart And Others Offer Workers Payday Loan Alternative (NPR) Rated: A

    So when Loving heard about a company called PayActiv, a tech startup that helps companies get their workers emergency cash for very small fees, “I thought to myself, now that’s a good idea,” he says. And he signed up.

    “Our data analysis showed that it was close to $150 a month being paid by the working poor — per employee or per hourly worker in this country,” says Shah. “That’s a substantial sum of money because it’s about $1,800 or $2,000 a year.”

    Venmo competitor Zelle wants to let you pay businesses, too (Payment Source) Rated: A

    Zelle, a Venmo-style app that lets consumers send money to friends, roommates and babysitters, is working on ways to ensure that customers can safely pay small businesses as well, according to people familiar with the situation.

    Zelle, backed by Bank of America Corp., JPMorgan Chase & Co. and other banks, is beefing up its risk-assessment tools as part of the effort, according to one of the people, who asked not to be identified because the feature hasn’t been announced. The idea is to help protect users when they’re paying businesses like gardeners and hairdressers.

    TransUnion Unveils Solution to Extend Real-Time Credit Offers (DSNews) Rated: A

    To meet the evolving needs of consumers, Chicago-based TransUnion has announced the launch of credit offers through a simplified, SMS-initiated, mobile experience. The technology seamlessly integrates real-time credit decisioning with consumer and device authentication, creating a secure, personalized, and dynamic user experience.

    Credit Karma acquires US lendtech Approved (Fintech Futures) Rated: A

    Credit Karma, based in San Francisco, has 80 million members across North America, almost half of which are millennials and 80% of which access the service via their mobile devices.

    Andy Taylor, founder and CEO of Approved, says it started the firm with a “vision that borrowers could visit an open house not having even talked with a lender, find the home of their dreams, and get fully pre-qualified on their mobile device before a listing agent offered them a business card”.

    With this joint mobile mentality, both firms will be looking to cash in from the crowded US mortgage market. Approved says it has done nearly $5 billion in loan originations.

    RealtyShares and Novaya Real Estate Ventures Exit Industrial Property Investment (Herald Courier), Rated: B

    RealtyShares, an online platform for commercial real estate investing, has announced that one of its investment syndicates recently exited an industrial investment property—1 Distribution Center Circle in Littleton, Massachusetts—in partnership with Novaya Real Estate Ventures, an established Boston-based operator of commercial real estate throughout New England.

    United Kingdom

    Monzo poised to join ranks of Europe’s fintech ‘unicorns’ (Financial Times) Rated: AAA

    Monzo, the British digital bank popular with millennials, is set to become the latest European fintech “unicorn” with a fresh round of fundraising expected to put a valuation on the company of up to $1.5bn.

    The east London-based online bank, known for its distinctive pink cards, is signing up 18,000 customers a week and aims to reach as many as 4m customers in the next couple of years, according to Tom Blomfield, its chief executive.

    Seven out of 10 people in UK now bank online (Financial Times) Rated: AAA

    While email is still the most common reason people use the internet, online banking is the fastest-growing use. According to a survey by the Office for National Statistics — looking at the UK population, not just internet users — 69 per cent said they banked online, almost double the proportion recorded 10 years ago (35 per cent).

    The ONS began running its survey in 1998. In the case of internet usage, people were asked about their use in the January, February and April before the survey.

    Source: Financial Times

    How P2P plugged the funding gap for small businesses (P2P Finance News), Rated: A

    BEFORE the global financial crisis, banks were the lender of choice for Britain’s small businesses, and perhaps the only option they would consider.

    Since then, banks have become more risk averse and are pulling back from lending in some parts of the market, especially since the EU referendum. Peer-to-peer, or rather peer-to-business (P2B), lending has stepped in to fill the gap.

    The Peer-to-Peer Finance Association (P2PFA) says the industry provided £660m of new lending to businesses in the first quarter of 2018 and, since the third quarter of 2017, there has been a 35 per cent increase in net lending.

    US-based payday loan giants Curo, QuickQuid and Lending Stream could face legal action in ‘bigger scandal than PPI’ (Daily Mail Online) Rated: A

    Giant American payday lenders could face legal action in the UK today after they were accused of mis-selling loans to up to a million Britons.

    Paydayrefunds.co.uk are preparing legal action against Quickquid, Curo and Lending Stream after the US-payday lending giants have so far refused to disclose information on customers who could be due tens of millions of pounds back in compensation.

    The company issued a letter of action six months ago, which is due to run out next Friday. Paydayrefunds.co.uk revealed they have already appointed a barrister in preparation for issuing an injunction at the High Court against the lenders.

    Income investing, inflation and P2P lending (Investors Chronicle), Rated: A

    Emma Aygemang gives us a report on the Financial Conduct Authority’s study on peer-to-peer (P2P) investing, and there’s a discussion on the implications of restricting the sector to private investors, and where P2P providers need to up their game.

    Crypto Lending App Lndr, Adds PayPal Integration to Increase Adoption Rates (Bitcoin Exchange Guide), Rated: B

    A new cryptocurrency lending app called Lndr is planning integration with one of the most popular financial services in the world: PayPal. This integration will open the ownership to digital assets to 100 million people around the world, which can cause an unseen widespread of cryptocurrency usage even for people who never before considered using cryptocurrencies.

    China

    China Rapid Finance Debuts Up to $ 20 Million Share Repurchase Program (Crowdfund Insider), Rated: AAA

    China Rapid Finance Limited (NYSE: XRF), one of China’s largest consumer lending marketplaces, announced earlier this week the launch of its new share repurchase program, which allows the lender to authorized the repurchase of its ordinary shares in the form of American depositary shares with an aggregate value of up to $20 million.

    China regulator orders bailout of peer-to-peer lenders by managers of distressed assets (SCMP), Rated: A

    During a Wednesday meeting in Beijing, the China Banking and Insurance Regulatory Commission asked four managers of distressed assets – Huarong, Cinda, Great Wall and Orient – to extend their mandate to non-performing loans owed by peer-to-peer (P2P) lending platforms, according to a source familiar with the matter. The meeting was first reported by Reuters on Thursday.

    Regulations help resolve P2P plight in China (Global Times) Rated: A

    In July, a total of 165 platforms reported problems, among which 65 percent had difficulties in investments withdrawal, while executives of 8.72 percent of those firms stole money and ran away, according to a report released by domestic industry website wdzj.com on August 1.

    Accumulated transactions in the domestic P2P industry had reached 7.48 trillion yuan by the end of July, the report said.

    On Wednesday, the China Banking and Insurance Regulatory Commission asked the country’s four State-owned asset management companies to help address rising risks in the P2P sector, according to media reports.

    China orders bad-loan managers to help failing P2P lenders (Financial Times), Rated: A

    China’s banking regulator has instructed the country’s four state-owned bad loan managers to deal with failing peer-to-peer lending platforms, a sign of Beijing’s concern about possible financial and social instability from the shadow banking sector.

    Hundreds of P2P platforms have collapsed in recent months due to borrower defaults and fraud by platform operators. The defaults have sparked panic among investors, some of whom have sought early redemption of their investments.

    European Union

    European IPOs may shake off sluggish start with a fall bonanza (Gulf Times) Rated: AAA

    European markets are set to see a slew of big initial public offerings this fall. Potential mega listings – from companies such as Aston Martin, Volvo Cars and Spanish oil firm Cepsa Trading – could help Europe overcome a relatively slow first half. IPOs there have raised about $31bn in 2018 so far, compared with almost $38bn in the same period last year, data compiled by Bloomberg show.

    Still, volatile markets threaten to spook investors and owners away from new share sales. Concerns that turmoil in Turkey could hurt the region’s lenders has added to pressure on European stocks from the US-China trade spat. Commodities have tumbled along with US equities, fuelling fears that the sell- off may be the start of a broader market correction.

    International

    Disruption or evolution? Why blockchain is the future of global lending (IT Pro Portal), Rated: AAA

    Global spending on blockchain solutions is estimated to reach $2.1 billion this year, but for there to be a blockchain revolution, many barriers – technological, political, organisational and societal – need to be overcome first.

    Currently, citizens in Europe have the lowest levels of ‘complete trust’ in traditional banks. This is worrying, given money is simply a means of exchange, built on the trust bestowed upon it.

    However, some bankers will tell you the traditional financial system is ‘global’ and ‘efficient’ as it is, despite being fully aware of its flaws. In our industry, lending, if you’re currently a non-bank lender who would like to diversify your global lending potential, you will find that it is punitively expensive, time-consuming and exclusive to large funds and traders. This ultimately reduces the potential reward for non-bank lenders through fees.

    Given the astonishing fact 39 percent of the world’s population are unbanked, blockchain technologies and associated crypto currencies could open the door for anyone, anywhere to lend, borrow and invest. All you need is internet access.

    Australia

    Aussies borrow money not knowing how personal loans are assessed, study finds (Daily Telegraph) Rated: AAA

    AUSTRALIANS have borrowed $46.6 billion in personal loans over the past 12 months, research has found, but experts claim many are unaware of how loan applications are assessed and how they may affect their own credit scores.

    RateCity analysed Australian Bureau of Statistics data from the past 12 months and found personal loan numbers were up 6.4 per cent year on year, with more than half a million Australians using them to buy cars in that period. The total borrowing for new cars was $8.33 billion at an average loan size of $36,341; while a further $5.88 billion was borrowed for used cars.

    On top of this, we borrowed $6.05 billion for debt consolidation and $2.54 billion for household goods, but despite the huge outlay, many borrowers are confused about how personal loans work and why they may not be offered the low interest rates they see on advertisements.

    India

    P2P has great potential, but too early to compare with equities (India Times), Rated: A

    People with zero or poor credit score find it hard to get a loan from NBFCs and banks. P2P aims to serve such unbanked and underbanked population. Tell us how do you do it?
    NBFCs and banks also lend to people ‘new to credit’. These people typically have a financial transaction whether in form of a bank account or income data, whether salaried or self-employed, and can be validated on the risk ratios, basis the information.

    Asia

    Cambodia Establishes New Fintech Association (Crowdfund Insider) Rated: AAA

    Cambodia Fintech Association also reported it undertakes four major streams of work on behalf of its members, which are the following:

    • Champion: Advise government and regulators on policy change that supports Fintech innovation and growth
    • Assist: Provide research, legal/regulatory help, service provider discounts and other benefits that help our members build and scale their Startups
    • Match: Get customers to buy, investors to invest, and talent to get involved in Fintech solutions
    • Bridging: Connect ventures (capital), talents (education) and other stakeholders within the Cambodia Fintech ecosystem and provide connections to overseas hubs through our network Events and Partners

    According to the Phnom Penh Post, CFA Vice President, Eddie Lee, stated that Cambodia is currently progressing in its fintech, but startups are slowly starting to surface in the country. Lee also explained that CFA has also signed a Memorandum of Understanding with the Taiwan Fintech Association, Thailand Fintech Association and Singapore Fintech Association to establish bridges with similar groups in the region. He added that the next step is to register the CFA with the Asian Fintech Network.

    Authors:

    George Popescu
    Allen Taylor

    Wednesday August 15 2018, Daily News Digest

    financial assistance

    News Comments Today’s main news: Square expands Bitcoin service to all 50 states. Funding Circle says higher rates will help them. Zopa says UK investors likely to hate Marmite. Preview of China Rapid Finance Q2 earnings. Funding Societies hits SGD200M in SME crowdfunding. Today’s main analysis: How non-prime families cover college tuition. Today’s thought-provoking articles: How Goldman Sachs created […]

    financial assistance

    News Comments

    United States

    United Kingdom

    China

    Other

    News Summary

    United States

    Square Expands Cash App Bitcoin Service to All 50 US States (CoinDesk) Rated: AAA

    The company – which was co-founded by Twitter chief executive Jack Dorsey – announced the service expansion through a Tweet on Monday, months after the firm initially rolled out the bitcoin service to investors in the country.

    As reported by CoinDesk, Square officially launched the bitcoin purchasing option on its Cash App in January following a testing phase started last year. However, the service was not offered in the states of New York, Georgia, Hawaii and Wyoming due to their more restrictive regulations regarding bitcoin transactions.

    How Non-prime families cover college tuition (Center for the New Middle Class) Rated: AAA

    Students from non-prime households are more likely to attend public, community, or junior colleges compared to students from prime households.

    • Consequently, they are more likely to live at home.
    • The majority of these students come from single-parent or homes with a stepparent.
    • Compared to prime parents, non-prime parents are significantly more likely to say that financial aid affected their choice of schools.
    • Non-prime parents are slightly more sensitive to schools welcoming students from diverse economic backgrounds.
    • Students from non-prime families are extremely reliant on financial aid as nine out of ten will use some form of financial assistance to cover college expenses in the Fall 2018, compared to three-quarters of prime students.
    • Access to financial aid is critical for these students because most of them come from single-income households with fluctuating incomes where their parent’s financial situation is precarious and burdened with high levels of debt.

    Almost twice as many nonprime students, 42%, attend public/community/jr colleges compared to prime students, 23%.

    Source: The Center for the New Middle Class
    Source: The Center for the New Middle Class
    Source: The Center for the New Middle Class

    Read the full report here.

    How Goldman Sachs Created Marcus To Be a Dominant Force in Consumer Banking (Lend Academy) Rated: AAA

    First, there was the launch of GS Bank in April 2016. Six months later Goldman Sachs introducedthe world to their Marcus brand. They began as an online lending platform offering unsecured consumer loans up to $30,000 with interest rates ranging from 5.99% to 22.99% (they now offer loans up to $40,000 and rates range from 6.99% to 24.99% as of August 2018). Their big differentiator was offering no fees. There was no origination fee for the borrower, no prepayment fees and no late fees.

    They gained traction very quickly. They crossed $1 billion in total originations within eight month of launch. At the end of their first year they were at $1.7 billion. At that time they brought their deposit business under the Marcus brand, it was formerly branded under GS Bank. Now when you go to the Marcus website you are presented with two options: personal loans and savings accounts (which includes certificates of deposits).

    We learned in Goldman Sachs Q2 earnings call in July that Marcus had originated more than $4 billon in total loans since launch and they had 1.5 million customers. Their deposit base is now $23 billion.

    Lenmo, the Venmo for Lenders, Set to Launch for IOS (Bank Innovation) Rated: A

    Whether it’s a consumer lender like Goldman Sachs’s Marcus or a point-of-sale lender like Affirm or even SMB lenders like BlueVine, there is a lot of perceived opportunity in the lending market.  Add a P2P dimension to that, and you have Lenmo.

    The new app is launching in the next few weeks in Apple’s app store, Bank Innovation has learned. Lenmo, founded less than a year ago, is a peer-to-peer app in which the lender can select a borrower as well as set their own interest rate, “which will be higher than most alternative options,” Margaret Cipparone, a Lenmo spokesperson, told Bank Innovation. These individual lenders will facilitate small, unsecured loans ranging from as low as $50 to as high as $5,000, she said.

    For borrowers, they can choose the various lenders available on the app and select the one they find most suitable. The goal behind this type of P2P lending service is to cater to the vast underserved market.

    Transforming The Small-Business Lending Customer Experience: Kabbage CEO Rob Frohwein (Forbes) Rated: A

    In the intervening years since Frohwein and his friends, Marc Gorlin and Kathryn Petralia, started Kabbage “with an idea and a misspelling of cabbage” (a slang term for money), it’s gone on to fund more than 150,000 small businesses, representing a wide variety of industries, with over $5 billion of working capital. And in that time, the goal has evolved, says Frohwein, to “never allowing you to go below zero.” What he means by this is “to keep entrepreneurs away from that pit-of-the-stomach feeling, which I know as a former small business owner myself: Deciding whether to pay vendors first, or make payroll, or invest in marketing, and knowing you need to do all three but it’s going to kill you because your cash flow just isn’t working out. It’s here that Kabbage can step up and help.”

    Micah Solomon, Forbes:  I’m interested in how you went about pushing back against the traditional customer experience norms in lending.

    Rob Frohwein, Co-Founder and CEO, Kabbage, Inc.: Everyone knows that banks have been underserving small business customers, but our transformational moment came from asking “why?”. It turns out that a large part of the reason is the costly, manual processes that make underwriting small business loans time-intensive and unprofitable. Kabbage’s technology quickly analyzes the live business data of a small business and fully automates the underwriting process, so businesses get an answer and access to capital in minutes, not weeks or months.

    And for Kabbage? What’s next for you.  

    Another internal saying here is “Let the bakers bake.” A baker didn’t start their business to deal with back-office financing all day long. They want to serve their customers and perfect their craft. We’re in the business of giving small businesses back more time in their day and to remove unneeded friction.

    Startup’s mission: Help cash-strapped students finish college (American Banker) Rated: A

    Harvard MBAs who want to refinance their student debt have numerous options, including the online lenders SoFi and CommonBond. Ivy Leaguers who need a loan to get through college also have choices, including Discover and Wells Fargo.

    But low- or moderate-income students who do not have relatives with sound credit who can co-sign have few options for obtaining the financial help they need to complete college. Many of them are women, who hold nearly two-thirds of outstanding student debt in the U.S. — almost $900 billion as of mid-2018.

    Fintech Crowd Dives Into Subprime Credit-Card Lending (The Wall Street Journal) Rated: A

    Facing rising loan losses, especially among the riskiest borrowers, banks are reining in their growth in this sector. Subprime credit-card balances at seven large U.S. banks rose 3% in the first half of the year from a year prior, down from a 13% increase in the year-earlier period, according to Autonomous Research. Capital One Financial Corp.’ssubprime balances accounted for 32% of its domestic credit-card balances in the first half of 2018 compared with 36% in the same period a year earlier

    Capital One has around $32 billion in subprime credit-card balances on its books.

    The new entrants say their use of machine learning and artificial intelligence for underwriting helps them manage the risk. They also mostly extend small credit lines, often ranging between $500 and $2,000, limiting the scale of potential losses.

    Around 60 million U.S. adults have credit scores lower than 650, according to Fair IsaacCorp. , roughly the threshold where banks focused on prime borrowers stop lending. Some 53 million U.S. adults don’t have credit scores at all because they have little or no borrowing history.

    Q2 Holdings To Acquire Cloud Lending For Lending And Leasing Platform (Seeking Alpha) Rated: B

    Q2 Holdings (QTWO) has announced it has agreed to acquire Cloud Lending for $105 million plus contingent earn-outs.

    Cloud Lending has developed cloud-based software for the financial lending and leasing industry.

    QTWO is acquiring Cloud Lending for its next generation web-based system and complementary capabilities and geographic customer base.

    The San Mateo, California-based Cloud Lending was founded in 2012 to develop and operate a cloud-based peer to peer lending and leasing platform.

    Roostify Announces Roostify Adapt Functionality to Extend Branding and Customization Options for Enterprise Lenders (Business Wire) Rated: B

    Roostify today announced the release of Roostify Adapt. An easily configurable feature for lenders with complex workflows, Roostify Adapt allows for real-world process management while maintaining the power of primary and secondary (“parent/child”) accounts within the Roostify digital lending environment.

    United Kingdom

    Higher rates will help us, says Funding Circle after divi cut (Citywire) Rated: AAA

    Peer-to-peer lending lending investment trust Funding Circle(FCIF) is expecting rising interest rates to help boost its yield after hedging costs forced a dividend cut.

    After launching in 2015, the peer-to-peer fund had offered a 6.5p annual payout but in June it was forced to cut its target dividend range to between 5p and 6p for the next 12 months.

    That equates to a forward yield of between 4.9% and 5.8% based on the current 102.8p share price.

    ZOPA: UK investors more likely to hate Marmite (Peer2Peer Finance) Rated: AAA

    INVESTORS in the UK are more likely to hate Marmite than average, according to new research.

    A survey commissioned by peer-to-peer consumer lender Zopa showed that 50 per cent of UK investors dislike Marmite, compared to the national average of 33 per cent.

    The research, which polled 2,000 people with an investment of at least £2,000, found a number of other quirky traits.

    This included a preference for blue cars, which are owned by 20 per cent of investors, and a love of listening to Radio 2.

    Here Are The U.K. Companies That Will Be Unicorns In 2019 (Forbes) Rated: AAA

    There are 

    Wonga investors raise £10 million to save company (Isreal National News) Rated: A

    Payday loan giant Wonga.com has received a £10 million cash injection from its investors to avoid going into administration. The controversial company was once hailed as the fastest growing company in Europe and had plans for a £1 billion flotation. However, the firm has faced difficulties after a surge in compensation claims and a regulatory clamp-down on the high-cost loans industry.

    The company had a variety of backers including Israeli investors – but emergency fundraising in the last few weeks caused their original investors of Accel Partners and Balderton Capital to offer a bailout solution.

    P2P Lender Welendus Returns to Seedrs to Raise £850,000 (Crowdfund Insider) Rated: A

    Short-term peer-to-peer lending platform Welendus has returned to equity crowdfunding platform Seedrs to raise £850,000 in funding. The lender’s latest initiative comes less than one year after it secured £208,898 through the funding portal.  

    Welendus also reported that for investors its enables them to invest in short-term loans, offering higher returns with the short-term investment flexibility and the benefit of a Provision Fund.

    Exploring the effect of the FCA crackdown on P2P and crowdfunding (AltFi News) Rated: A

    The growth of P2P lending and its positive effect on the UK economy cannot be disputed. Initially starting out as a curiosity during the depths of the financial crisis in 2008, P2P lending has grown from £300 million in funds being lent in 2011 to a huge £4.6 billion in 2016.

    China

    Preview: China Rapid Finance Q2 Earnings (Benzinga) Rated: AAA

    On Wednesday, China Rapid Finance XRF 4.86% will release its latest earnings report. Decipher the announcement with Benzinga’s help.

    Earnings and Revenue

    Wall Street analysts see China Rapid Finance reporting a loss of 13 cents per share on revenue of $30.88 million.

    China Rapid Finance EPS in the same period a year ago came in at a loss of 29 cents. Revenue was $15.16 million. Revenue would be up 103.67 percent on a year-over-year basis.

    Victims of P2P Lending Crisis in China Speak Out About Misfortunes (The Epoch Times) Rated: AAA

    Yindou had a loan balance of 4.4 billion yuan (about $640 million) as of the end of June, according to Yicai, a major Chinese business newspaper. After Yindo suspended its operations in July, the company’s investors were left without the ability to withdraw their investments.

    Since the platform closed, Yindou investors have turned to the bank in hopes of collecting their investments back.

    Recently, victims of another financial product apparently gone wrong have taken to the streets. This year, a total of 170 private funds, 70 percent of which are private-equity or venture-capital funds, have failed or closed without explanation. This has led to many protests, most notably in Beijing on Aug. 7, where local police turned away protestors before they could make their case to China’s bank regulator, the Banking Regulatory Commission (CBRC).

    Meanwhile, China’s M2 money supply, or the total savings of companies and residents, increased more than a hundredfold from 1990 to 2017, according to He, at a rate faster than the growth of GDP. While a steady money supply, or credit, can fuel an economy’s growth, such excessive credit, in relation to the GDP, can fuel bubbles and cause inflation.

    Regulatory Reorganization Crucial to Health of Financial System (Caixin Global) Rated: A

    The merging of the China Banking Regulatory Commission (CBRC) and the China Insurance Regulatory Commission into the China Banking and Insurance Regulatory Commission (CBIRC) naturally has attracted a lot of attention outside of China as it involves major changes across two important areas of finance.

    Yet perhaps the most important thing is how this will change the relationship between regulators and the central bank, the People’s Bank of China.

    Fifteen years ago, responsibility for supervising and regulating banking institutions was taken from the central bank and given to the then-newly formed CBRC. This development had far-reaching consequences, and led to the rebuilding of the previously inefficient financial regulatory model into a comprehensive and professional banking system that is in line with international standards. State-owned banks were also commercialized around this time.

    Protests Mark China’s Ruptured P2P Lending Landscape (PYMNTS) Rated: A

    China’s peer-to-peer (P2P) lending crisis has caused widespread anger from citizens who are demanding that the government bail out hundreds of collapsed P2P companies. Last week, it was reported that China ordered a lockdown of Beijing’s financial district to prevent individuals from protesting a crisis in the P2P lending marketplace.

    The size of China’s P2P industry is bigger than in the rest of the world combined, with outstanding loans of 1.49 trillion yuan ($217.96 billion USD). The industry was nearly unregulated and at its peak in 2015, when there were about 3,500 P2P businesses in the country. However, a combination of regulatory failures, fraud and the declining debt is being blamed for the shuttering of 243 online lending platforms since June.

    China’s multi-front economic war dulls direction (Asia Times) Rated: A

    Chinese stocks were at the bottom of the Emerging Asia pack into August, down 20% in local-index terms, as the so-called “trade war” with Washington added another 25% mutual tariff blow on tens of billions of dollars’ worth of goods.

    The International Monetary Fund urged a negotiated settlement as it predicted only “limited direct impact” on the Chinese economy, shaving growth by half a percentage point under a medium-case scenario, while holding to this year’s 6.6% forecast. However, the IMF also warned that credit expansion was unsustainable and that tighter global financing conditions posed “downside risk,” as the renminbi continued its 10% slide since April.

    However, the US-China exchange-rate and trade regimes now closely overlap as an overhang on “A” share consideration, despite China’s 30% slice on the benchmark MSCI Index, with a clean resolution of cross-cutting issues unlikely to offer recovery prospects in the coming months.

    European Union

    Lower Interest Rates on Mintos – How do Investors React? (P2P Banking) Rated: AAA

    Compared to the beginning of July the interest rates for newly issued EUR loans on Mintos are much lower now. While investor enjoyed interest rates of up to 13-14% for loans issued in the first half of the year, typical rates are 8-11% now, with a 12-13% for more exotic loans mixed in.

    To find out how investors reacted to the situation P2P-Kredite.com conducted a survey among German speaking Mintos investors. Here are the preliminary results (48 respondents):

    • 35% say they withdraw univested cash and invest it on other p2p lending platforms
    • 21% say they continue to invest on Mintos primary market
    • 17% say they just wait, the interest rates will rise again
    • 15% say they withdraw unimvested cash and invest it in other asset classes (e.g stock)
    • 12% say they buy on the Mintos secondary market now, instead of using the primary market
    International

    Banks and Retailers Are Tracking How You Type, Swipe and Tap (The New York Times) Rated: AAA

    The way you press, scroll and type on a phone screen or keyboard can be as unique as your fingerprints or facial features. To fight fraud, a growing number of banks and merchants are tracking visitors’ physical movements as they use websites and apps.

    Some use the technology only to weed out automated attacks and suspicious transactions, but others are going significantly further, amassing tens of millions of profiles that can identify customers by how they touch, hold and tap their devices.

    The data collection is invisible to those being watched. Using sensors in your phone or code on websites, companies can gather thousands of data points, known as “behavioral biometrics,” to help prove whether a digital user is actually the person she claims to be.

    When clients log in to their Royal Bank of Scotland accounts, software begins recording more than 2,000 different interactive gestures. On phones, it measures the angle at which people hold their devices, the fingers they use to swipe and tap, the pressure they apply and how quickly they scroll. On a computer, the software records the rhythm of their keystrokes and the way they wiggle their mouse.

    Asia

    Funding Societies Hits SGD200 Million in SME Crowdfunding (Funding Societies) Rated: AAA

    Funding Societies surpassed the SGD 200 million mark in total crowdfunded SME loans. This achievement came just 6 months after crossing SGD 100 million in January this year. In the same period, its investor base has also increased from about 40,000 to 75,000, indicating strong demand from investors to support local SMEs while diversifying their investment portfolio.

    Chinese P2P Lender Hexindai Announces Equity Stake Acquisition in Indonesian Online Lending Platform Musketeer (Crowdfund Insider) Rated: A

    Chinese peer-to-peer lending platform Hexindai (NASDAQ:HX) announced on Tuesday it has entered into definitive agreements to acquire a 20% equity stake in Musketeer Group Inc., an Indonesian online lending platform that offers consumption installment loans, for approximately $1.6 million, and simultaneously completed the acquisition. 

    MENA

    The Impact Of The Middle East’s Fintech Boom On Economic Inequality In The Region (Entrepreneur) Rated: AAA

    The past decade has shown that fintech can be a powerful force for equality. Blockchain, data analytics, and mobile phone technology are evolving at breakneck speed and have shown potential to bridge the gap between the rich and the poor. Safaricom’s mobile-money platform, M-Pesa, reaches an estimated 96% of households in Kenya, and is credited with lifting at least 200,000 Kenyan households out of poverty. The Indian mobile wallet, PayTM, has nearly 200 million users, including women and rural families that can now participate in the digital economy. Will the Middle East produce companies of the same caliber and social impact? There is certainly an opportunity, thanks to three factors.

    The first factor is necessity. The Middle East is in dire need of ideas to bridge the massive gulf between the rich and the poor. The region leads the world in economic inequality, where the top 10% of the population enjoy about 60-66% of the region’s income. 86% of the adult population is underbanked, which means they don’t have access to services at formal financial institutions. This provides a tremendous market opportunity.

    Square And MetLife Watch Out: Two Fintech Startups Target T Markets (Forbes) Rated: A

    Lending Express, a Tel Aviv-based platform founded in 2016 that connects small businesses with lenders, is hoping to expand the market for small business loans. As CEO Eden Amirav explained in an August 13 interview, Lending Express — which has raised $2.7 million in seed capital — has grown from under 10 people in October 2016 to 25 — mostly in Tel Aviv with a business development office in San Francisco.

    Lending Express did not disclose its revenues but it seems to be growing. As Amirav said, “We currently work with more than 30 leading lenders and FinTech partners, and have facilitated $65 million in SMB loans funded through our platform. Since we began operations in the US in the last quarter of 2017, and thereafter almost every quarter, we have doubled the number of loans we facilitated the previous quarter and 46% of all loans we’ve helped close happened in the second quarter of 2018.”

    Lending Express sees tremendous potential for SMB lending outside of traditional banks. Amirav estimates that a mere 1% of the $1 trillion in total SMB loans — or $10 billion — is offered by alternative lenders like Lending Club and On Deck.

    Authors:

    George Popescu
    Allen Taylor

    Monday June 25 2018, Daily News Digest

    FREED 2018-1 collateral characteristics

    News Comments Today’s main news: SoFi launches SoFi Money. Robinhood in talks with regulators about bank products. Orca Money plans to double in size this year. Monzo, TransferWise partner. Banco BNI Europa drops 50M Euro into Linked Finance. Today’s main analysis: FREED 2018-1 Deep Dive. Today’s thought-provoking articles: What financial service firms can learn from direct-to-consumer companies. Graduate degrees with […]

    FREED 2018-1 collateral characteristics

    News Comments

    United States

    United Kingdom

    European Union

    International

    Other

    News Summary

    United States

    SoFi’s Latest Product Called “SoFi Money” is Here (Lend Academy) Rated: AAA

    At time of writing, SoFi is paying 1.1% on their account which is a competitive rate when you consider that it is a hybrid account. Other banks who continuously offer the highest rates available on the market such as Goldman Sachs’ Marcus are currently paying around 1.7% on savings accounts. The largest banks in the US such as Bank of America, Citi and JP Morgan Chase pay between 0.01% and 0.1% on savings accounts which varies depending on deposit amounts and current promotions.

    Source: Lend Academy

    Continued Yield Curve Flattening, FREED 2018-1 Deep Dive (PeerIQ), Rated: AAA

    The yield curve continued its unrelenting flattening after last week’s Fed meeting. The spread between 10-year and 2-year treasury yields now stands at 36 bps (about 1 to 2 rate hikes from inversion). An inverted yield curve and lower-long term yields have presaged economic slowdown or recessions in the past. You can read our analysis of the Fed’s interest rate decision here.

    FREED 2018-1 Deep Dive

    FREED 2018-1’s collateral pool consists of 2 types of loans – 61.6% Freedom Plus (F+) and 38.4% Consolidation Plus (C+).

    F+ Loans: F+ loans are unsecured consumer loans to near prime and prime borrowers. F+ collateral has a WA age of 8 months and WA remaining term of 41 months. The WA current FICO score of the pool is 723 and the WA interest rate is 14.8%.

    C+ Loans: C+ loans are offered to select qualified debt settlement clients as an option to shorten the duration of their debt settlement program by making funds immediately available to fund settlements reached by Freedom Debt Relief. C+ collateral has a WA age of 8 months and WA remaining term of 44 months. The WA current FICO score of the pool is 654 and the WA interest rate is 22.9%.

    Source: Source: PeerIQ, KBRA, DBRS
    Source: PeerIQ
    Source: PeerIQ

    There’s plenty more. See the rest of the charts here.

    Robinhood is said to discuss bank products with regulators (American Banker) Rated: AAA

    Robinhood Markets has more than 4 million U.S. consumers using its free stock-trading platform. Now, it’s in talks to offer them other banking services like savings accounts, according to people familiar with the matter.

    KeyBank Acquires Digital Lending Platform For Small Businesses Bolstr (Crowdfund Insider) Rated: A

    On Wednesday, KeyBank announced it has acquired digital lending platform for small businesses Bolstr. According to Key, the fintech software, which is expected to be implemented later this year, will enable the banking group to provide faster and easier access both to SBA loans and to traditional capital for business owners. The acquisition comes just after the OCC recently called on banks to issue more SME loans. 

    Capital One Co-Founder Is Making a Bet on Risky Borrowers (Bloomberg) Rated: A

    The co-founder of Capital One Financial Corp. is betting now’s a good time to lend to the riskiest borrowers.

    Nigel Morris, Richard Fairbank’s partner in creating the company that became Capital One, is joining the board of LendUp Global Inc. and boosting his investment in the firm, which uses machine learning to look beyond traditional credit scores in the subprime market.

    What Financial Services Can Learn from Direct-to-Consumer Companies (Crowdfund Insider) Rated: AAA

    2016 Bain study found that nearly a third of customers globally would change their bank if they could do so easily. With dissatisfaction that high, traditional financial institutions should look to emulate the branding strategies of direct-to-consumer retailers, rather than leaning on their well-established names, to engage with millennial and Gen Z consumers.

    Research from BCG found that brands that create personalized customer experiences with technology and data can increase revenue by six to ten percent, and direct-to-consumer brands have capitalized on the benefits of personalization.

    Many fintech companies’ value proposition is to leverage technology to provide less expensive financial advice, lower interest rates on student loans, or more fair and reflective insurance rates. For example, robo-advisor Betterment charges only 25 basis points for wealth management services and no minimum to enroll, as opposed to traditional financial advisors that charge one to two percent on assets under management and often require high minimum investments to qualify for on-boarding.

    A recent PricewaterhouseCoopers study found that 75 percent of bank customers base their purchasing decisions on whether or not they’ve had a positive customer experience at the bank.

    Which Graduate Degrees Deliver More Debt than Income? (Credible) Rated: AAA

    Credible’s analysis of student loan debt levels and salaries across 16 graduate school majors shows that the most important consideration isn’t how much debt you’ll take on to obtain an advanced degree — or how much you’ll earn after graduation — but achieving the right balance between the two.

    Source: Credible
    United Kingdom

    Scottish fintech Orca Money hopes to double in size (Insider), Rated: AAA

    Scottish fintech firm Orca Money hopes to double its staff to ten over the next year following its second funding round.

    The Edinburgh-based company raised £280,000 seed capital last January and is now talking to investors about follow-on funding.

    P2PFA accused of reducing transparency after loanbook changes (Peer2Peer Finance) Rated: A

    THE PEER-TO-PEER Finance Association (P2PFA) has been accused of reducing transparency and hindering efforts to enhance investor protection after changing the rules governing how firms publish their loanbook.

    Previously, members of the self-regulated trade body were obliged to publish their full loanbook, showing information about all the loans on their platform.

    But at the start of June, the P2PFA announced that members now have the option to “either continue to publish their entire loan book, or provide a detailed breakdown of loans in their overall loan book to enable a consumer to be informed about the nature and number of loans of different descriptions presently originated through the platform according to standards to be approved by the P2PFA board.”

    Asset management giant warns on ‘exotic’ peer-to-peer lending pension investing (AltFi News) Rated: A

    Pension investors should avoid high yielding assets such as peer-to-peer loans, according to new research by UK-based Royal London Asset Management.

    The firm, which manages £114bn of assets, says investors looking generate income in retirement should beware for high risk, higher yielding investments.

    How I invest: Ayo Adesina, a software engineer with £32,000 in peer-to-peer (iNews), Rated: A

    Ayo Adesina, 34, was lucky enough to come into a £50,000 windfall when he won series two of Channel 4’s TV programme Hunted in 2016.

    Mr Adesina, who describes himself as a novice investor, put the majority of the money – £32,000 – into a peer-to-peer property lending platform. He says his investment has grown 7 per cent, or £3,000, since he opened an account a year ago.

    Who’s switching jobs at BWB Compliance (City A.M.), Rated: B

    BWB Compliance has recruited Dena Chadderton as a senior adviser. With wide-ranging experience both as a regulatory consultant and across the financial services industry, Dena will primarily be advising firms in the fintech and asset management space. In particular, Dena will continue to specialise in the regulation of P2P lending and crowdfunding platforms, a growing part of the current team’s client-base.

    China

    Online lender seeks small-scale borrowers (The Standard) Rated: AAA

    China’s FinUp Finance Technology Group, which operates a technology-enabled finance platform with a focus on marketplace lending, aims to widen its market in the country by going public in Hong Kong.

    The fintech firm also provides a variety of other personal credit services including point of sale instalment services to automobile financing services.

    Chinese Fintech PINTEC Launches Installment Financing on E-Commerce Platforms (Crowdfund Insider) Rated: A

    Chinese fintech Pintec Technology Holdings Limited (PINTEC) announced on Wednesday it has launched installment financing on its e-commerce platforms. This news comes just a couple of weeks after PINTEC secured $103 million through its latest financing round, which as led by Mandra Capital and SINA Corp.

    European Union

    Monzo partners with TransferWise for international payments (TechCrunch) Rated: AAA

    The partnership, which TechCrunch outed nearly three weeks ago, will see TransferWise power international payments for the U.K. challenger bank’s 750,000 customers. It is the second new bank partnership that TransferWise has unveiled this month, after the fintech unicorn announced that it has begun working with France’s second largest bank BPCE Groupe.

    Asked why Monzo  has chosen to work with TransferWise, Blomfield reiterates the challenger bank’s goal of becoming a “hub or control centre” for your money. This won’t necessarily all be done by Monzo, he says, “but with partner organisations who plug into this hub”. TransferWise is the first of these.

    LINKED FINANCE SECURES €50M FUNDING FOR IRISH SMES FROM BANCO BNI EUROPA (Irish Tech News) Rated: AAA

    Linked Finance, Ireland’s leading peer-to-peer (P2P) lending platform, has secured backing from Portugal’s fastest growing digital bank, Banco BNI Europa, who will deploy up to €50m over a 2-year period, to lend to Irish SMEs.

    As part of a wider strategy to identify the best P2P lending platforms in key European markets, Banco BNI Europa will deploy its capital alongside Linked Finance’s existing lenders. Linked Finance, connects Irish SMEs who need loans with an online lending community of more than 19,000 users.

    HAVE YOUR CAKE AND ‘HODL’ TOO: TAKING OUT A LOAN WITH BITCOIN (Bitcoinist), Rated: A

    P2P lending platform InLock wants to change this by enabling cryptocurrency to be used as collateral for a loan in fiat — effectively solving the short-term spendability problem. At the same time, borrowers can remain ‘hodlers‘ with the option to get their cryptocurrency back in full after the loan is paid off, regardless of any changes in price.

    Csaba: When we looked at the Bitcoin blockchain, we found that 40% of all bitcoins existing today had not been moved at all in the past year. Looking back at 2017, there were plenty of reasons to move them: hard forks, the mempool crisis, regulation problems, an amazing bull run, followed by a 70% correction.

    The FinTech50 2018 (The FinTech 50) Rated: B

    Listings include:

    • Monzo
    • N26
    • OakNorth
    • Raisin
    • Revolut
    • Seedrs
    • SolarisBank
    • Starling Bank
    International

    34 Fintech and Insurtech Unicorns (Inside Bitcoins), Rated: AAA

    According to data compiled from CB Insights and Crunchbase, they are currently 34 fintech unicorns, or startups valued at over $1 billion.

    32. Funding Circle — $1 billion

    Value: $1 billion | Raised: $413 million

    Founded: 2009 |  | HQ: London

    What it does: Peer-to-peer marketplace for business loans.

    Why it’s hot:Over £3 billion has been lent across the platform and the company is tipped for a blockbuster European float later this year.

    31. Kabbage — $1 billion

    Value: $1 billion | Raised: $500 million

    Founded: 2009 |  | HQ: Atlanta

    What it does: Fast online small business loans.

    Why it’s hot: The company has written over $4 billion-worth of loans and has partnered with Spanish bank Santander.

    24. ACORN OakNorth — $1.2 billion

    Value: $1.2 billion | Raised: $486 million

    Founded: 2015 |  | HQ: London

    What it does: A fintech firm focused on unlocking the potential in bespoke SME lending globally using its data and technology platform, ACORN machine.

    Why it’s hot: ACORN machine is a fintech platform that helps automate the way banks penetrate this underserved and underestimated market. It does this by leveraging process excellence, machine learning and technology to fuel data-driven decision making across the loan lifecycle.

    22. Tuandaiwang — $1.46 billion

    Value: $1.46 billion | Raised: $380 million

    Founded: 2012 | HQ: Dongguan

    What it does: Peer-to-peer lending platform.

    Why it’s hot: The company has helped individuals and companies borrow $11.4 billion and helped lenders make $335 million in returns.

    17. NuBank — $2 billion

    Value: $2 billion | Raised: $527 million

    Founded: 2013 |  | HQ: Sao Paulo

    What it does: Brazilian app-only bank.

    Why it’s hot: The bank has 3 million customers and has raised money from Sequoia Capital, Goldman Sachs, Tiger Global, and more.

    16. Affirm — $2 billion

    Value: $2 billion | Raised: $720 million

    Founded: 2012 |  | HQ: San Francisco

    What it does: A hire-purchase provider, letting people buy products and pay them off in installments.

    Why it’s hot: The company works with over 1,200 retailers in the US and its technology helps retailers increase average order sizes by 51%. Morgan Stanley and Singapore’s GIC are both investors.

    15. Avant — $2 billion

    Value: $2 billion | Raised: $1.8 billion

    Founded: 2012 |  | HQ: Chicago

    What it does: Online personal loans.

    Why it’s hot: The company has lent over $1 billion and is backed by the likes of Tiger Global, KKR, and Jefferies.

    13. Klarna — $2.5 billion

    Value: $2.5 billion | Raised: $636 million

    Founded: 2005 |  | HQ: Stockholm

    What it does: User-friendly payment systems for mobile and web that lets people buy now and pay later.

    Why it’s hot: The company processes 800,000 transactions a day and has been used by 60 million people globally. Sequoia Capital, the Silicon Valley fund that backed PayPal, is an investor.

    9. GreenSky — $3.6 billion

    Value: $3.6 billion | Raised: $350 million

    Founded: 2006 |  | HQ: Atlanta

    What it does: Provides technology to banks that is used in processing loan applications.

    Why it’s hot: Steven McLaughlin, a former Goldman Sachs banker whose firm advised GreenSky on a funding deal, told Bloomberg in 2016 that GreenSky “is the single best fintech company created in the last 10 years, by far.”

    8. Credit Karma — $3.5 billion

    Value: $3.5 billion | Raised: $868 million

    Founded: 2007 |  | HQ: SanFrancisco

    What it does: Provides free online credit reports, offsetting the cost of paying for them with targeted advertising of financial products.

    Why it’s hot: Over 75 million people in the US and Canada have used the service. Google Capital is an investor.

    7. SoFi — $4 billion

    Value: $4 billion | Raised: $2.1 billion

    Founded: 2011 |  | HQ: San Francisco

    What it does: Peer-to-peer student loan refinancing, mortgages, and other types of personal loans.

    Why it’s hot: Like Zenefits, SoFi struggled with a slew of setbacks in 2017. Allegations of sexual misconduct and loan misstatements forced out founder Mike Cagney. Former Twitter CFO and ex-Goldman banker Anthony Noto is now leading a turnaround of the business.

    3. Lu.com — $18.5 billion

    Value: $18.5 billion | Raised: $1.7 billion

    Founded: 2011 | HQ: Shanghai

    What it does: Chinese peer-to-peer loans and financing platform.

    Why it’s hot: Lu.com, also known as Lufax, is one of China’s largest online lenders and is tipped for an IPO this year.

    ETHLend Blockchain Lending Platform Adds MyBit Token (MYB) in Partnership (Bitcoin Exchange Guide) Rated: B

    MyBit is an Ethereum-powered ecosystem that aims to connect the global Internet of Things (IoT) industry. ETHLend works with the Ethereum blockchain as well and is a marketplace for peer-to-peer lending services that use smart contracts. The company provides low interest rates and a transparent technology for processing transactions.

    Currently, it allows users to lend with Ethereum, but it may be ready to introduce new altcoins at the end of this year, including MYB.

    Australia

    RateSetter to ‘accelerate’ broker strategy with new appointment (The Adviser) Rated: A

    Last week, The Adviser broke the story that Mark Woolnough had left his role at ING after 18 years at the lender to join the fintech RateSetter.

    It has now been confirmed by RateSetter that Mr Woolnough has joined its ranks as head of third-party distribution.

    India

    P2P lending marketplace ‘PaisaDukan’ to open branches in Noida and Bangalore (Knowledge & News Network) Rated: AAA

    PaisaDukan, a P2P lending platform fully owned by Mumbai based fintech startup BigWin Infotech, has decided to launch 2 branches in Noida & Bangalore as a part of its PAN India expansion and growth plans by the end of next month.

    This will enable the company to have better control over their operations and widen its reach.

    Asia

    Bills on P2P lending, cryptocurrency pending in National Assembly (The Korea Herald) Rated: AAA

    Rep. Min Byung-doo of the ruling Democratic Party and Rep. Kim Su-min of the minor opposition Bareunmirae Party filed two separate bills to regulate P2P lending firms in July last year and in February, respectively.

    With the bills still pending in the National Assembly, financial authorities have been struggling to tackle abusive and deceptive P2P lending practices.

    Open Banking: no leisurely walk in the DX park (Enterprise Innovation) Rated: A

    The 2018 Global Payments Insight Survey: Retail Banking report by ACI Worldwide and OVUM  claimed that 86% of banks in Asia are developing their open banking strategy.

    Ovum’s 2017 Payments Insight Survey said 87% of surveyed banks report having a clear strategy for developing open APIs, up from 59% in 2017.

    Africa

    FINT is changing the narratives in the Nigerian lending space (Nairametrics), Rated: AAA

    In a recent report by the International Finance Corporation (IFC) and the Central Bank of Nigeria (CBN), less than a third of MSMEs have successfully obtained loans from financial institutions, and that is not for a lack of trying.

    Nigeria currently has over 35 million MSMEs and if approximately only 10 million MSMEs have been able to get loans from financial institutions, hence, a credit gap of about 25 million in the country.

    What exactly is FINT?

    FINT is an online lending marketplace, basically we connect verifiable income borrowers looking for access to affordable credit with lenders who are looking to fund the loans for attractive returns. We have consumer loans i.e. loans between N60,000 and N2 million at rates as low as 8% for 3 – 12  months, with retail and institutional lenders (banks and asset managers).

    For lenders, they can lend in the multiples of N20,000 grows at 26-39% for one-year loan tenures, for 6 months 15-22% for 3 months it is 8-14%.

    Authors:

    George Popescu
    Allen Taylor

    Wednesday May 2 2018, Daily News Digest

    Wednesday May 2 2018, Daily News Digest

    News Comments Today’s main news: RateSetter overhauls Rolling Market product. Revolut to offer cash back in cryptocurrency. Kabbage hires new CTO. BlueVine raises $200M. iZettle expected to IPO. ETMoney launches CreditLine. Today’s main analysis: Are marketplace lenders, tech companies living up to the hype? Today’s thought-provoking articles: Revising the ICAPM to reflect effects of style investing. Cagney’s Figure to offer home […]

    Wednesday May 2 2018, Daily News Digest

    News Comments

    United States

    United Kingdom

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    News Summary

    United States

    Kabbage Hires CTO to Lead Development of Future Data-First Solutions for Small Businesses (PRNewswire) Rated: AAA

    Kabbage, Inc., a global financial services, technology and data platform serving small businesses, appoints James Chou as its chief technology officer (CTO). With more than 20 years of successfully leading technology innovations, Chou will oversee the development of the company’s next generation of data-driven financial products and services for small businesses.

    Ex-SoFi CEO Mike Cagney Makes a Comeback With a New Blockchain-Focused Startup (Fortune) Rated: AAA

    The new startup plans to offer three- to 10-year home equity loans and a buy-lease-back product, the report says. In other words, it will purchase retirees’ homes and then lease them back. Many banks cut down on these types of loans following the financial crisis, but they’re starting to gain traction again due to rising home prices.

     

    Online Lender BlueVine Receives $ 200 Million Line of Credit from Credit Suisse (Crowdfund Insider) Rated: AAA

    Online lender BlueVine has secured a $200 million asset-backed revolving credit facility with Credit Suisse. Additionally, the SME focused platform said it has upped its business line of credit to $250,000. Earlier in 2018, BlueVine doubled its invoice factoring credit limit to $5 million. BlueVine’s total funded volume since founding is expected to top $1 billion in 2018.

    To date, BlueVine has raised more than $400 million in equity and debt funding and is funded by Lightspeed Venture Partners, 83NORTH, Correlation Ventures, Citi Ventures, Menlo Ventures, Rakuten Fintech Fund and other private investors.

    Senate should take up bill to help lenders see ‘credit invisibles’ (American Banker) Rated: A

    The Credit Access and Inclusion Act of 2017 would amend the Fair Credit Reporting Act to allow the reporting of certain positive consumer credit information, such as on-time payment histories, to consumer reporting agencies. In other words, the legislation would help consumers build up their credit history for something they’re already doing.

    A New Crop of Fintech IPOs Will Face Skeptical Investors (Bloomberg) Rated: A

    There are now close to 30 private fintech startups with valuations at or above $1 billion, according to data platform PitchBook. A few of them are increasingly cited as possible IPO candidates. Among the most closely watched are Pimco-backed GreenSky, which has already filed paperwork with the Securities and Exchange Commission, and Dutch payments company Adyen BV, said to be considering IPO as soon as this year.

    The question now is what happens to those billion-dollar-plus valuations when the public gets a look at the companies’ financials and growth projections. In the past, fintech companies haven’t fared too well. Square Inc., which is set to report earnings this week, is the exception.

    BOK Financial Implements Partnership With Roostify to Streamline Mortgage Process (Business Wire) Rated: A

    BOK Financial, a top-25 regional financial services company, has implemented a partnership with Roostify, a digital lending platform that gives customers more control of their home buying process while allowing loan officers to utilize the latest technology to more easily process loans.

    The new digital platform is a tool that offers functionality and efficiency to customers including:

    • Customers can start an application, provide documentation and follow their loan’s progress online.
    • Applicants have a secure way to upload, send, and receive loan documents. Homebuyers can add other involved parties to transaction, such as the real estate agent.
    • Users don’t have to guess where they are in the process – they will receive timely loan status updates.

    Inside a swanky New York party for graduates who paid off their student loans (Market Watch) Rated: A

    Garrido also entered a competition to win a trip to New York furnished by SoFi, the company that’s made its name refinancing student loans, including one of her own. The occasion of the competition, which Garrido ultimately won: To join other SoFi customers—or “members” in the company’s parlance—who paid off their debt to celebrate at a rooftop bar and restaurant last Thursday in the swanky William Vale hotel in Williamsburg, Brooklyn.

    On one side of the student debt story are those that our college finance system has truly crippled: Borrowers who leave school with debt and no degree or graduate with degrees worth little in the labor market, or benefit less from their degree simply because of where they came from. Many in the latter group struggle to repay the debt—and not necessarily due to lack of ambition. Despite the rebounding economy, levels of student-loan delinquency remain stubbornly high.

    Mom, CFP: New Varo Money Survey Reveals That When Americans Need Financial Advice, They Come To Mama (Payment Week) Rated: A

    Mobile banking company 

    U.S. judge dismisses state regulators’ lawsuit over national ‘fintech’ charter (Reuters) Rated: A

    A District of Columbia federal judge dismissed a lawsuit brought by state bank regulators against the U.S. Comptroller of the Currency over its proposal to offer charters that would let so-called fintech companies do business nationwide.

    Since the OCC has not reached a final decision on the fintech charters, the claim of harm by the Conference of State Bank Supervisors (CSBS) was speculative, U.S. District Judge Dabney Friedrich wrote in her decision tossing out the case, issued late on Monday.

    The future of lending is here, meet RAD Lending (TechBullion) Rated: A

    Introducing the RAD Lendingplatform, a foundation for the financial products for the modern crypto economy, where a family of RAD credit products — personal and business loans, credit cards — will help filling the gap between crypto holdings and real-life fiat spending.

    RAD Lending’s peer-to-peer (p2p) lending platform will use the benefits of the blockchain and smart contracts for its crypto secured credit products. The platform will connect fiat money investors looking for the predictable yield, with crypto-asset holders looking for loans in easily spendable fiat. By accepting crypto assets as a collateral against loans, and using the guardrails of the blockchain and smart contract technology, the platform will mitigate risks for both investors and lenders.

    REVISING THE ICAPM TO REFLECT EFFECTS OF STYLE INVESTING (All About Alpha) Rated: AAA

    A recent paper by Michael Stutzer, of the University of Colorado at Boulder, Leeds School of Business, suggests that the intertemporal version of the capital asset pricing model (ICAPM) needs some revision in light of the market dominance of style investors.

    A more full statement of that might be: it needs revision in light of the lack of empirical support for its foundations on the one hand, and in light of the dominance of style investors on the other: and that these two revisions turn out to be one and the same.

    Read the full paper here.

    5 Top Lenders You Should Consider for Tiny House Financing (Student Loan Hero) Rated: A

     Upstart

    • Upstart personal loans come with an APR range of 7.73% to 29.99%
    • Borrow between $1,000 and $50,000
    • Repayment terms of three or five years
    • Qualify with a credit score of 620 or better

    2. LendingClub

    • LendingClub personal loans come with an APR range of 5.99% to 35.89%
    • Borrow between $1,000 and $40,000
    • Repayment terms of three or five years
    • Qualify with a credit score of 600 or better

    4. FreedomPlus

    • FreedomPlus personal loans come with an APR range of 4.99% to 29.99%
    • Borrow between $10,000 and $35,000
    • Repayment terms of two, three, four, or five years
    • Qualify with a credit score of 640 or better

    5. SoFi

    • SoFi personal loans come with an APR range of 5.37% to 14.24%
    • Borrow between $5,000 and $100,000
    • Repayment terms of three, five, or seven years

    Personal Capital links with employers to grow user base (Tearsheet) Rated: B

    Digital wealth adviser Personal Capital is offering its financial advice platform to employers to grow its user base beyond its core group of investors.

    The company last week inked an agreement with benefits provider Alight and investment firm AllianceBernstein to use Personal Capital’s tech platform to help participating employers select personalized 401(k) offerings for their staff members. Co-branding with Personal Capital exposes large swaths of new users to the platform.

    PLI 23rd Annual Consumer Financial Services Institute, Chicago session (JDSupra) Rated: B

    The second presentation of the 23rd Annual Consumer Financial Services Institute, sponsored by the Practising Law Institute, will take place in Chicago on May 7-8, 2018.  I am co-chairing the event, as I have for the past 22 years.

    New to the Institute this year will be a panel on the second day that I will moderate and that will discuss the rapidly changing landscape for marketplace lending and fintech.

    United Kingdom

    RateSetter overhauls Rolling Market product (Peer2Peer Finance) Rated: AAA

    RATESETTER has unveiled a series of changes to its Rolling Market product, removing the ability for investors to set their own rate on reinvested funds and altering how returns are paid.

    Currently investments in the Rolling Market are reinvested each month, meaning the interest rate can change, but from 6 June, investments will remain matched to the same borrower until the loan is repaid, so the return will remain the same.

    The rate will only change when the money is reinvested.

    UK Fintech Startup Revolut Will Give Cash Back In Cryptocurrencies (Forbes) Rated: AAA

    In a bold bid to further tempt young, tech-minded customers, London-based fintech startup Revolut is going to launch a debit card that gives users 1% cash back in cryptocurrencies.

    UK challenger banks braced for fresh wave of consolidation (Financial Times) Rated: A

    Senior executives at several smaller lenders and established high street banks said they expect a pick-up in M&A activity, after last year’s £850m takeover of Shawbrook and FirstRand’s £1.1bn purchase of Aldermore put the sector on notice for a return to dealmaking.

    Cryptocurrency lobby group calls for regulation based on P2P model (Peer2Peer Finance) Rated: A

    A GROUP of the UK’s leading cryptocurrency platforms want the regulator to use peer-to-peer finance legislation as a framework for their own sector.

    CryptoUK, a self-regulatory trade association with eight members, has set out new plans for the Treasury to make cryptocurrency investment a regulated activity under the Financial Conduct Authority (FCA).

    The plans are part of a written response by CryptoUK to the House of Commons Treasury Select Committee inquiry into digital currencies, which is currently underway.

    Do you live in a P2P property hotspot? (Peer2Peer Finance) Rated: A

    But as the P2P property market has expanded, a few clear trends have begun to emerge. In some parts of the country, P2P property lending is going strong. In fact, if you’re based in one of these P2P property hotspots, you may be living next door to one…

    Walthamstow-Wellesley is currently offering investments in three new-build properties in E17, while Octopus Choice has loaned money on more than 30 properties in the E17, N17 and N15 areas. The Octopus platform is offering rates of between 4.49 per cent and 7.99 per cent of borrowers, with an average of four per cent in returns for investors.

    Huddersfield-The West Yorkshire town of Huddersfield has been a surprising recipient of P2P property funding, largely thanks to property platform Lendy, which has financed several large property developments there. Its proximity to Manchester and Leeds means that it is likely to attract even more developer interest in the coming years.

    Eastbourne-Landbay currently keeps 21 per cent of its property portfolio in the South East, with dozens of properties in and around Eastbourne.

    YPO Innovation Week Unites Innovators for the Global Fintech Summit 2018 in London (Globe Newswire) Rated: B

    As a part of its third annual YPO Innovation Week, YPO will host the Global Fintech Summit in London, United Kingdom, where the most dynamic global innovators will be together for a rare chance to network, overturn conventional thinking and leave inspired with the tools to infuse innovation in their companies and communities.

    The Global Fintech Summit 2018 will explore the latest disruptive technologies and opportunities across the fintech landscape – including blockchain, bitcoin and robo-advice to online payments, crowdfunding, P2P lending and private equity while connecting YPO leaders from throughout Europe and across the world to share challenges, insights and needs.

    China

    China’s Biggest Tech Unicorns Stampede to Go Public (Wall Street Journal) Rated: AAA

    An unprecedented wave of Chinese technology companies is accelerating plans to raise money from the global capital markets, hoping to leverage investors’ optimism about the sector and lock in buoyant stock valuations.

    In recent months, at least a dozen Chinese companies with collective private valuations of roughly $500 billion have been in talks with bankers and potential investors about initial public offerings in the second half of this year or in early 2019, according to people familiar with the discussions.

    European Union

    iZettle to announce IPO plan early next week (Financial Times) Rated: AAA

    iZettle is gearing up to announce its intention to float as early next week in what would be the largest initial public offering by a European financial technology company.

    The Swedish payments and ecommerce group has been in talks with potential investors and could seek a valuation of about SKr10bn ($1.1bn) when it is expected to launch its IPO process on Tuesday next week, according to people involved in the flotation.

    International

    Banks and Fintechs: Adversaries or Partners? (Wharton) Rated: AAA

    Some fintechs will aggressively go it alone and challenge the legacy banks in their most lucrative markets. And recent rule changes in Europe, which force banks to transfer closely guarded customer information to fintechs upon customer request, will add new momentum to the upstarts.

    Still, the drive towards collaboration is well underway, as the following on-the-ground examples suggest.

    • ICICI Bank, India’s largest private bank, and Paytm, the country’s largest digital payments platform, have jointly launched a digital credit account on the Paytm app. Paytm-ICICI Bank Postpaid gives customers access to instant micro-credit for everyday expenses — from bill payments to movie tickets. Its algorithm – from ICICI – is based on a customer’s financial and digital behavior and evaluates credit-worthiness in seconds.
    • Bocom International, the investment banking arm of China’s Bank of Communications, has partnered with Hong Kong fintech firm FDT-AI to develop intelligent, personalized investment research based on bank clients’ past transactions. The hope is to offer more tailor-made investment advice.
    • ING Group has partnered with Scalable Capital, a leading online wealth manager and robo-advice firm in Europe, to offer a fully digital investment solution to ING’s retail customers starting in Germany. Customers do a paperless registration in under 15 minutes. With a minimum investment of 10,000 euros they can monitor their portfolios on both Scalable Capital and ING mobile apps and online portals.
    • Kabbage, a U.S.-based leading online lender, has partnered with large players such as Scotiabank, for streamlining online lending; MasterCard, for business loans through MasterCard’s network of acquirers; ING, to provide capital to small businesses; and Santander Bank, for loans to small and medium enterprises.

    Financial regulators turn their sights on banks’ use of cloud (Financial Times) Rated: A

    Financial regulators on both sides of the Atlantic have turned their attention to the cloud, as concerns mount over how to supervise online storage services, which hold information from the world’s biggest banks.

    Global financial institutions are becoming increasingly reliant on the cloud — using it to store customer-account data and their banking systems, leading supervisors to fret about what might happen if a bank collapses.

    As well as cyber risk, regulators ‎are worried about concentrating so much information in the hands of Amazon, Google and Microsoft — the three big companies that dominate cloud provision — without the same level of supervisory oversight as banks, according to people familiar with regulatory discussions.

    Chris Larsen: From Marketplace Lending Pioneer to Creating the New Internet of Value (Lend Academy) Rated: A

    But Chris had an itch to start a new company, one that was based on this emerging blockchain technology.

    Of course, this move proved to be prescient and his new company, which eventually became known at Ripple, has the potential to completely rewrite the rules of global commerce. In 2013 they introduced the XRP token as the vehicle to help them achieve this goal. XRP (as of this writing) is the third most valuable token with market cap of $32 billion. This is down considerably from its high in January when its market cap reached around $150 billion and briefly made Chris Larsen one of the wealthiest people in the world.

    When you think about how far technology has come and the fact that information has flowed freely across borders now for 25 years it is just crazy that the way we move money internationally has barely changed since the 1980s. And while companies like Transferwise have made it more efficient and simple to send money internationally, it is still more expensive and much slower than the system that Chris Larsen envisions. He sees this new system as the second internet: the internet of value.

    Living Up To The Hype (Or Not) (PYMNTS) Rated: AAA

    Bitcoin, marketplace lending — pick your poison — they came to disrupt, but the jury is still out on whether they can ever achieve that goal. The global citizen and international nomad may change the nature of work around the world, but they need a “finabler” to help them do it.

    And new EU regulations like GDPR may be a sea change in how business worldwide will get done, but no one seems to know if that change will come as an easy, rising tide or a tsunami of transformation.

    Source: PYMNTS

    BFEX: EMPOWERING THE WORLD WITH A BETTER FINANCIAL IDENTITY BY SHANKAR BISWAS (Bitcoinist) Rated: A

    BFEX’s peer to peer lending platform is a financial market place with a difference: it is transparent, secure and credible and different from the banks with its proprietary; Decentralized Social Trust Credit Scoring that will provide millions with access money at fair rates with a new improved social identity. BFEX will create better indicators by making meaningful connections between traditional and nontraditional data where raw Credit scores are only a part of the story. Nontraditional data will allow us to look at trends in consumer behavior that completes the picture and tells a better story of the person.

    India

    ETMoney forays into lending with the launch of CreditLine (Medianama) Rated: AAA

    Times Internet’s ETMoney has entered into the lending space with the launch of a new service called CreditLine on its platform, in partnership with RBL Bank.

    ETMoney is a personal expense management app which allows users to invest in mutual funds, gold deposits, liquid funds etc, buy insurance, manage expenses and more. The company claims that the app has 4 million users so far and said that it has grown 20x in the last 12 months.

    Competition

    Paytm is reportedly trying to enter the lending space and is seeking a licence from the Reserve Bank of India (RBI) to become a peer-to-peer lending platform.

    Mobikwik too is working on the launch of a lending product that will offer instant credit to customers directly from its app.  Other players in this segment are like Capital Float, NeoGrowth, Paytm-backed CreditMate, CASHe, LendingKart, MoneyTap, EasySalry, Faircent, LoanMeet amongst others.

    Asia

    New P2P lender snares key Asian backers (Financial Review) Rated: AAA

    OurMoneyMarket has just closed a $4 million funding round which saw N2N Connect, a Malaysian stock exchange-listed financial information provider backed by Japan’s financial media giant, Nikkei Inc, emerge as a key shareholder. Singapore-based YK Capital, a tech company investor, also tipped into the raising.

    Run by Adam Sutherland, formerly a securitisation banker at National Australia Bank, and chief operating officer Crystal Anderson, and chaired by John Barry, NAB’s former head of debt capital markets in Asia, OurMoneyMarket has been up and running for nine months and during that time has made $1.5 million in loans.

    It’s taking things slowly; there have been $95 million in applications. It has delivered early investors a 13 per cent net return. Revenue is growing at 45 per cent month on month.

    Singapore launches the “Fintech Fast Track” for new patents (Business Insider) Rated: AAA

    The Intellectual Property Office of Singapore (IPOS) has announced the launch of a new initiative, dubbed the Fintech Fast Track initiative, which aims to grant patents for fintech innovations at a faster pace than before. While it can traditionally take up to 2 years for a patent to be granted, this new initiative will bring that down to 6 months for new fintech solutions. The initiative includes fintech innovations related to electronic payments, investment platforms, insurance technology, blockchain, banking, security, fraud, and authentication, among others.

    Authors:

    George Popescu
    Allen Taylor

    Wednesday December 6 2017, Daily News Digest

    purchase apr

    News Comments Today’s main news: Kabbage lends $4B to over 130K small businesses. RateSetter loses 23M GBP in ad investment. RateSetter to launch IFISA in February. Klarna, WorldPay partner on invoice and credit-based payments in Europe. Two new crypto-asset backed fiat loan platforms. Toss to expand into southeast Asia. Today’s main analysis: LendingTree’s monthly mortgage offer report. Today’s thought-provoking articles: […]

    purchase apr

    News Comments

    United States

    United Kingdom

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    European Union

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    Asia

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    News Summary

    United States

    Kabbage Delivers $ 4 Billion to More Than 130,000 Small Businesses (Kabbage Email), Rated: AAA

    Kabbage, Inc., a global financial services, technology and data platform serving small businesses, has extended over $4 billion to more than 130,000 small businesses, serving the largest customer base than any online small business lender. These landmarks represent an approximate 30-percent increase in total funding and total customers served since the company’s last milestone announcement in April 2017. With over 1.5 million live data connections with its customers, Kabbage’s high growth is attributed to its fully-automated lending technology as it continues to be a trusted lending partner to tens of thousands of small businesses across all industries in all 50 U.S. states.

    Robert Sharpe also joined the company as its chief operating officer. Sharpe has more than 20 years of executive leadership in North America, Europe and Asia. He has successfully held various C-level positions, including president, chief executive officer and chief operating officer with multiple global consumer goods companies, each serving tens of thousands of customers and generating billions of dollars in revenue. With an additional ten years of commercial banking and corporate finance experience, Sharpe will be responsible for Kabbage’s continued growth and operational oversight as the company expands internationally and scales its services to serve more and larger small businesses.

    During 2017, Kabbage reached major milestones, including:

    LendingTree Releases Monthly Mortgage Offer Report for November (PR Newswire), Rated: AAA

    LendingTree today released its monthly  Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.

    Source: PRNewsfoto/LendingTree
    • November’s best offers for borrowers with the best profiles had an average APR of 3.75% for conforming 30-year fixed purchase loans, unchanged from October. Refinance loan offers were down 1 bps to 3.69%. Mortgage rates vary dependent upon parameters including credit score, loan-to-value, income and property type.
    • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were down 1 bps to 4.30%, the lowest since November 2016. In contrast, the loan note rate of 4.18% was unchanged from October when it reached the highest since July. We prefer to use the APR as lenders often make changes to other fees in response to changing interest rates.
    • Consumers with the highest credit scores (760+) saw offered APRs of 4.16% in November, vs 4.43% for consumers with scores of 680-719. The APR spread of 27 bps between these score ranges was 5 bps wider than in October and the widest since July 2016. The spread represents nearly $13,400 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $233,127. The additional costs are due to higher interest rates, larger fees or a combination of the two.
    • Refinance APRs for conforming 30-yr fixed loans were down 2 bps to 4.24%. The credit score bracket spread widened to 19 from 16 bps, amounting to $9,500 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $235,973.
    • Average proposed purchase down payments have been rising for 8 months and reached $62,409.
    Source: PRNewsfoto/LendingTree

    Learning About Machine Learning (PYMNTS), Rated: AAA

    Certainly, the mountains of data are becoming larger by the day. Seven years ago, the total amount of information produced on a global scale passed one zettabyte. The scale shakes out thusly: If a single cup of coffee holds a gigabyte, then the Great Wall of China stores a zettabyte. In just three years, the tally will be 44 zettabytes, or 44 Great Walls of China, as estimated by global market intelligence firm IDC.

    Along with the impressive growth in data created, stored and used on a global scale, so too is AI poised to grow in leaps and bounds. It will create nearly $37 billion in annual revenues for companies of all stripes, sizes and sectors, according to market intelligence firm Tractica.

    Within that figure, machine learning is a sector that will see $15.3 billion in revenue in 2019, as noted by BCC Research and cited by business process outsourcing company TeleTech, with an average annual growth rate of 19.7 percent. The savings for U.S. companies could be as high as $60 billion in 2020, Forbes noted. In addition, AI is expected to add $8.3 trillion in economic activity for the U.S. by 2035, according to projections by business management consultancy Accenture.

    Consider a financial institution processing credit card information. The transaction data is passed to the machine learning system as soon as it is entered at the terminal or point of sale, and the system then analyzes the transaction against the system on which it has been trained. The historical data offers a way to glean what “normal” behavior of a transaction looks like.

    To combat a payments fraud adversary that is evermore fluid with bad actors’ tactics and operates in a card-not-present (CNP) world, the machine deployed by a financial institution must be able to “explain” what it is doing, Feedzai said. The “learning” should result in explaining the reasoning so the logic behind the decisions is transparent and meets compliance needs.

    Banks Build Line of Defense for Doomsday Cyberattack (WSJ), Rated: AAA

    U.S. banks have quietly launched a doomsday project they hope will prevent a run on the financial system should one of them suffer a debilitating cyberattack.

    The effort, which went live earlier this year and is dubbed Sheltered Harbor, currently includes banks and credit unions that have roughly 400 million U.S. accounts.

    While most people worry about their money being stolen in a hack, banks fear something more sinister: an attacker destroying, or even simply locking, data.

    Such moves could cripple a bank, leaving it unable to operate for hours, days, or perhaps much longer.

    Source: The Wall Street Journal

    LendingClub Introduces New Certificate Investment Vehicle (Lend Academy), Rated: AAA

    On Friday of last week, LendingClub announced that it closed a new kind of transaction. It was a whole loan transaction structured as a tradable pass through security called a CLUB Certificate.

    This was an initiative that was investor led. Basically, they had a potential investor who did not want to invest in whole loans. They are not for everyone, given they are an illiquid investment that has a duration of several years. What this investor wanted was a security that acted like a whole loan but one that had liquidity.

    While LendingClub would not share details of this deal we did learn that these were both three and five year loans of one particular loan grade. They customized this deal to meet the investors exact requirements.

    LendingClub claimed that this was a first of its kind deal in marketplace lending but in my research I discovered this piece on Asset-Backed Alert from April 2016 that talked about a similar structure that Prosper was working on last year.

    How Technology is Streamlining the US Lending Sector (NewsGram), Rated: A

    However, when the lending process is digitized the amount of paperwork is reduced dramatically. This is because account activity, credit history, income history as well as tax compliance can be fed into the system with the click of a button. This has made the collection and verification of information quite easy. Besides streamlining the application process, the amount of time it takes to get a loan has also reduced.

    In addition, some lenders have developed some innovative mobile solutions that enable customers to submit an application from anywhere. The most outstanding feature about mobile loans is that there is a constant interaction between the lender and the borrowers. This goes a long way in improving service delivery.

    Courtesy of technology advancements, now it’s possible to view the status of your loan application as well as your account status with a lender. This helps borrowers to stay updated during the entire online installment loans process. In addition, you can get instant communication about any requests that a lender may have that is critical to the borrowing process.

    Time to address banks’ skepticism about data sharing (American Banker), Rated: A

    When bankers complain about the security risks of sharing data with fintechs, they get an eye roll. Such complaints tend to be regarded as a cover for an ulterior motive: unwillingness to give customer details to competitors.

    But when Chair Sheila Bair, a former chairman of the Federal Deposit Insurance Corp., recently warned of the security risks of sharing customer data with third parties, it made some people stop and think.

    Big banks hope early bet on Alexa will pay off (American Banker), Rated: A

    After a number of months of testing and refining an alternative way to bank, Ally Bank launched Ally Skill. “It was ready for prime time,” said Diane Morais, president of consumer and commercial banking at Ally Bank. Since mid-November, a customer can ask Alexa — in their own words — what their balance is, what the price of something costs in hours worked, and notably, to move money.

    Since Capital One announced its skill in March of 2016, U.S Bank, American Express and several credit unions announced Alexa skills in addition to Ally. Others have been testing Alexa, including bank innovator USAA. Even smaller banks are readying to launch skills. FIS, one of the biggest bank vendors that has been testing Alexa since 2016, said about a dozen of its thousands of bank customers are on track to roll out a bank skill for Alexa by Christmas. Most recently, Amazon announced Alexa for business, and Capital One is one of its launch partners.

    Mortgage providers and wealth managers are also exploring ways to offer their services over such conversational devices.

    A brand-new cybersecurity watchdog just shut down a $ 15 million cryptocurrency scam (Business Insider), Rated: A

    US regulators appear to be paying more attention to the opaque world of initial coin offerings.

    The Securities and Exchange Commission announced Monday it halted a fraudulent ICO “falsely promising” over 1,000% returns. The regulator said this was the first case filed by its brand-new cybersecurity unit, aptly named Cyber Unit.

    Trump pick plans radical shake-up of consumer protection agency (Financial Times), Rated: A

    US banks and other financial companies are preparing for a lightening of their compliance burden in areas from payday lending to mortgages as President Donald Trump tightens his grip on a powerful regulator set up to protect consumers.

    “Virtually the entire range of regulations previously adopted by the CFPB could be subject to review,” says Quyen Truong, a former senior figure at the agency who is now a partner at law firm Stroock & Stroock & Lavan. “There’s no particular set of rules that would be considered sacrosanct.”

    In an early sign of his intent, Mr Mulvaney instituted a 30-day freeze on new initiatives within hours of assuming office.

    Reforms that Mr Cordray had yet to introduce that would extend the CFPB’s reach into new areas, including mooted restrictions on small business lending, are now unlikely to see the light of day.

    Payday Lending And The New CFPB (PYMNTS), Rated: A

    As we noted when we first covered the final draft of the payday lending rule, Congress retains the power to keep the rule from ever making it into the books, so to speak, through the power of the Congressional Review Act. The CRA not only would prevent the payday lending rule from going into effect, but it would also prevent any similar rule changes from being considered for the next five years.

    After some dormancy on the issue, the House of Representatives passed a CRA resolution Friday that would effectively kill the payday lending rule in its cradle.

    The move comes as a bi-partisan effort – somewhat surprising, given the general tenor of Congress at present, particularly when it comes to consumer protection issues – with three Republican and three Democrat co-sponsors.

    Mulvaney has won the first round in court, as a U.S district judge rejected English’s request for a temporary restraining order to prevent Mulvaney from taking over. But English has said she intends to fight on and will seek a preliminary injunction against Mulvaney and the administration.

    Congress has only 60 legislative days from the publication of the rule in the federal register to invoke the CRA, and the rule passed on Nov. 17.

    Madden ruling was a step backward. Congress should fix it (American Banker), Rated: A

    I have been, far more often than not, on the same side of policy issues as the leading consumer and civil rights groups. But I disagree here: Madden is not just legally wrong; it is also bad public policy, because it moves us further away from creating a more effective and inclusive financial system. Bipartisan, bicameral proposals have already been introduced in Congress to fix Madden. Congress should pass them.

    U.S. News magazine cites LendingPoint in ‘Best Personal Loans’ list (LendingPoint), Rated: B

    We’ve been named to the “The Best Personal Loans of 2017” list by the prestigious U.S. News and World Report.

    U.S. News named LendingPoint best for “Fair to Good Credit With Merit-Based Qualifications.”

    LendingTree Selects Gordian Knot Analytics Group’s Comprehensive Segmentation Subscription Service (Guru Focus), Rated: B

    LendingTree (NASDAQ: TREE), the online loan marketplace, announced today that it has entered into a multi-year subscription for segmentation analysis and database scoring with Gordian Knot Analytics Group, utilizing their unique segmentation methodologies and proprietary machine learning toolset. Gordian Knot offers proprietary marketing analytics machine learning tools that help LendingTree more effectively target and engage with the right consumers to drive the business forward and maximize value for current and future customers.

    FinTech Leader OppLoans Named 6th Best Place to Work Nationally (Daily Telescope), Rated: B

    Socially responsible online lender OppLoans received top rankings in Glassdoor’s 2018 Best Places to Work award. The start-up was named the sixth-best place to work nationally for small- to medium-sized businesses.

    The review-based rankings serve as a capstone to a stunning year of growth for OppLoans. Accolades include rising over 200 positions to reach number 219 on the Inc. 500 list, earning an A+ rating from the Better Business Bureau, being named the third-fastest growing technology company in Chicago by Built In Chicago and launching OppU, a free, standards-aligned online curriculum that teaches personal finance skills.

    PeerStreet’s Brew Johnson Named 2017 HousingWire Vanguard Award Winner (BusinessWire), Rated: B

    PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that its Co-Founder and CEO, Brew Johnson, has been named to HousingWire’s 2017 list of Vanguard Award winners. HousingWire’s 2017 Vanguard Award recognizes top leaders from all areas of the mortgage industry, including those in lending, real estate and investing.

    Why Do I Have an Affirm Payment Due After I Returned a Phone? (Republic Wireless), Rated: B

    If Affirm was used to finance a purchase from the Republic Online Store, all carted items, including shipping, must be financed through Affirm. Shipping charges are not refunded by Republic Wireless. This means that you will still be responsible to Affirm for any shipping costs you financed and interest that has accrued.

    United Kingdom

    Peer-to-peer lender Ratesetter loses £23m after ad investment flops (The Times), Rated: AAA

    Ratesetter slumped to a £23 million loss for the year after a disastrous investment in an advertising business.

    The loss was due in large part to a £14 million write-off on Adpod Limited, which the lender ended up owning after using its own capital to prevent a huge default on its peer-to-peer loan book from hitting investors.

    The loss is sharply higher than the previous year’s figure of £5.3 million.

    RateSetter to launch IFIsa in February (Bridging&Commercial), Rated: AAA

    Peer-to-peer lending platform RateSetter expects to launch its Isa in February 2018.

    Once the Isa launches, customers will have until 5th April 2018 to invest the 2016/17 Isa allowance of £20,000.

    Lloyds Banking Group and Royal Bank of Scotland to close branches (Business Insider), Rated: AAA

    Two of the UK’s largest banks, 

    Source: Business Insider

    Orca accepted into regulatory sandbox scheme (p2P Finance News), Rated: A

    PEER-TO-PEER investment platform Orca is one of 18 firms that have been accepted into the third phase of the Financial Conduct Authority’s (FCA) regulatory sandbox scheme.

    The FCA received 61 submissions for the third phase of the scheme, of which 18 met the eligibility criteria and were accepted to move towards testing.

    One of the successful applicants is Orca, which is developing an intelligent peer-to-peer investment platform which lets users diversify across multiple P2P platforms, lending sub-sectors and borrowers.

    Personal Finance App Squirrel Now Processes £1 Million A Month (Crowdfund Insider), Rated: A

    Squirrel, a personal finance app designed to help users have more control over their money, announced this week that it now processes £1 million a month. The company reported that it processed its 10 million last week.

    Squrriel is currently seeking £400,000 through its equity crowdfunding campaign on Crowdcube. Funds from the initiative will be used to continue the expansion of Squirrels platform.

    How an MBA entrepreneur made his multiple-account bank card add up (Financial Times), Rated: A

    Israeli Shachar Bialick spent the first decade of his working life founding and backing start-ups before he dropped everything to move overseas and take an MBA.

    He started Curve, a fintech company, to simplify personal finances with a single bank card for multiple accounts from different providers.

    “We have too many cards, too many accounts, and too many products and services we use to manage our money,” he adds. “Curve is my biggest, most ambitious business so far. We are aiming to create an entirely new category in the banking system.”

    Curve has raised $12m in venture capital funding and added corporate partnerships to extend the services it offers, such as an expense filing system provided by Xero, the online accountancy service.

    Aire partners with retailer N Brown as more retailers become lenders for shopping middle class (Aire Email), Rated: A

    Aire, which provides a more accurate way for lenders to understand and score new applicants, today announces a first-of-its-kind partnership with online retailer N Brown, as research data reveals the ‘new norm’ of UK shoppers choosing to spread the cost for their retail purchases over time.

    The new agreement will see Aire provide its augmented credit assessment technology to support N Brown, which operates online stores such as JD Williams, in analysing the full picture of online customers and the true benefits and risks that come with them. Aire combines technologies of Artificial Intelligence with data science and deep knowledge of credit, which will enable N Brown to reach a wider group of customers without increasing its risk. After recent announcements about new partnerships in the p2p lending and car finance spaces, Aire’s expansion into the retail sector means that it is adding another new market to its portfolio in under six months.

    Key insight:

    –          New partnership between Aire and online retailer N Brown for customers who choose to open a new credit account

    –          Aire adds retail finance to its growing portfolio

    –          New research finds that UK adults pay off on average of £40 per month for retail purchases

    –          9% of UK adults increased their monthly commitments in the last two years

    Research shows in-store crowds are biggest stress factor for christmas shoppers (DIY Week), Rated: A

    The new research by Swedish payments provider Klarna delves into the views of more than 2,000 consumers, and reveals that Brits today are so stressed out in the extended run up to Christmas that they’re overwhelmed when the day itself arrives.

    In-store crowds were the number one stress for a quarter of respondents, whilst finding the perfect gift was the biggest source of stress for 20% of those surveyed.

    These pressures could have a big impact on the bottom line of merchants if they’re not addressed; more than a third of consumers have previously walked out of a shop in frustration as a result. This is not just a bricks and mortar issue – 1 in 10 respondents have abandoned their online basket in frustration when the process is too complex, suggesting there’s still work to be done to smooth the purchase process online.

    FinTech Marketplace Wealth Migrate Continues Expansion with New UK Office (GlobeNewswire), Rated: B

    Wealth Migrate, (KPMG Global Fintech Top 50), a global online real estate marketplace, today announced the opening of a new office in the U.K. and the appointment of a new country CEO, as the firm continues to build on its global presence as part of a strategy to meet growing demand from investors.

    To better serve its community of investors in this region, Wealth Migrate has opened a new office in London.

    Adding to the news of this expansion, Wealth Migrate additionally announced the opening of their U.A.E. office and the appointment of a new U.S. based CEO this week.

    To head up the new office, Wealth Migrate has appointed Ken Williams as its CEO of Wealth Migrate, U.K.

    China

    Runaway borrowers the new face of China’s personal credit boom (SCMP), Rated: AAA

    China’s online lending boom has sent a steady stream of new clients to Guangzhou lawyer Luo Aiping in recent months: the parents and siblings of young men trapped or ruined by usurious debts.

    Zeng Hong, from Hunan province, is a typical client. She went to Luo for help because she had been harassed by calls from debt collectors for months after her 27-year-old brother ran away, leaving behind a two-year-old son and more than 300,000 yuan (US$45,400) in debts.

    Zeng wanted to help repay her younger brother’s loans, but 300,000 yuan is a big sum for a poor family and her husband strongly opposed her plan. She approached Luo to ask whether the debts and interest her brother had incurred were legal.

    China Launches Massive Debt Crackdown (ValueWalk), Rated: AAA

    You see, in an effort to fuel economic growth over the past few years, China has taken on a lot of debt. Since 2008, China’s debt as a percentage of economic output has increased from around 160 percent to around 280 percent at the end of 2016. (By comparison, the total debt in the U.S. as a percent of economic output is upwards of 300 percent.)

    Source: ValueWalk

    Why it matters: China is BIG and getting bigger

    With a GDP of US$11.2 trillion, China is already the world’s second-largest economy (it will soon be the largest), and it has the second-largest stock market. The country will also soon have the world’s biggest middle class, totalling over 550 million people by 2022. To put this in perspective: That’s 1.7 times the entire population of the U.S.

    Consumer loans (such as peer-to-peer (P2P) lending and payday loans) have grown rapidly recently. For example, consumer loans jumped 300 percent compared to last year.

    SoftBank’s Son Eases Lufax Peer Pressure (Bloomberg), Rated: AAA

    Lufax, the online wealth manager that’s among the world’s biggest startups, has hired five banks to work on a Hong Kong initial public offering of as much as $5 billion, according to IFR.

    Lufax is the world’s 10th-largest unicorn, or startup worth at least $1 billion.

    Source: Bloomberg

    Lufax had a loan balance as of Sept. 28 of more than 158 billion yuan ($24 billion), more than three times the 43 billion yuan held by China’s second-biggest P2P lender, New York-listed Yirendai Ltd., according to wdzj.com, a Chinese website that tracks online financiers.

    DAILY BRIEFING (TechNode), Rated: B

    What happened: The Ping An-backed online wealth management firm Lufax has hired five banks to work on an up to $5 billion Hong Kong IPO.

    Why it’s important: A major player in China’s P2P lending market, Lufax will join a number of fintech companies that go public in recent months. It was eyeing an IPO as early as last year but later delayed the process due to market challenges and regulatory uncertainties, the CEO told Bloomberg last year. —Rita Liao

    China’s Lufax picks banks for up to $5 bln Hong Kong IPO – Reuters

    CreditEase Received Top Rankings in Global FinTech Investment by CB Insights and FT Partners (PR Newswire), Rated: A

    CreditEase, a world-class financial technology conglomerate based in Beijing, China, specializing in inclusive finance and wealth management, announced today that its venture fund, CreditEase FinTech Investment Fund (“CEFIF”) has recently been ranked No. 7 by CB Insights as “Top 10 Most Active VC Investors in Global FinTech Companies” and No. 1 by FT Partners as “Most Active FinTech Investors (Corporate VC)”.

    Source: CB Insights FinTech Report_Q3 (PRNewsfoto/CreditEase)

    How This Chinese Fintech Company Is Innovating by Leasing Cows (Fortune), Rated: A

    Particularly, Ning Tang, CEO of fintech firm CreditEase, is lending consumers cows in a bid to reach those living in rural areas who might have limited access to credit and financing.

    The rural population accounts for 48% of China’s total, with agriculture accounting for about 8.6% of the the nation’s Gross Domestic Production in 2015, according to the World Bank. Income in rural China has also been on the rise, with urban income narrowing to 2.7 times that of rural income from 3.3 times in 2009. And though migration toward the city has been on the rise and the nation’s dependence on farming and livestock is on the slide, rural populations and agriculture are still a significant part of the country’s economy.

    IN CHINA, THE CHARACTERS FROM THE SHOW APPEAR IN THE COMMERCIALS, TOO (AdAge), Rated: A

    iQiyi, which is backed by Chinese internet giant Baidu, adopted the tactic first and developed it into a commercial product when it broadcast the 1930s tomb-raiding adventure tale “The Mystic Nine” last year. The first batch of advertisers ranged from iQianjin, a peer-to-peer lending app, to PepsiCo, which showed characters chowing down on Lay’s and gulping Pepsi.

    The other major services, Alibaba Group’s Youku Tudou and Tencent Holdings‘ video platform, have embraced the tactic too. At iQiyi, the cost for embedding one such commercial in an episode ranges from $150,000 to $530,000, depending on projected viewership, Yuan says.

    European Union

    Worldpay Partners with Klarna to Launch Invoice and Credit Based Payments in 6 Key European Markets (PR Newswire), Rated: AAA

    Worldpay, a global leader in payments, has announced that it will partner with Klarna, a leader in invoice and credit based payments, to further enhance its product portfolio. From today, Worldpay customers trading in AustriaFinlandGermanythe NetherlandsNorwaySweden and the United Kingdom, and wishing to accept payments on invoice or instalments, will be able to use Klarna’s invoice and credit based payments from Worldpay. This will help eCommerce businesses to improve conversion rates by up to 20% and provide a fast and smooth checkout process.

    These new payment options will allow consumers to decide when to pay for the items once they have received their goods. Instead of a request for credit or debit card details at the point of checkout, consumers are prompted for their email address and postcode, ensuring a quicker checkout process and leading to lower cart abandonment. The solution allows consumers to manage the terms of their payment, be it 14-day payment by invoice, by fixed or flexible instalments, spreading the cost over several months.

    The move into credit and invoicing payments follows demand from customers wanting to expand the breadth of payment methods offered. Worldpay is one of the first payments companies to deploy this new payment integration, providing superior market coverage as well as faster time to market since there is no need for a new plug-in when  legacy technology is updated.

    Fintech deposit marketplace hits 100,000 customers (AltFi), Rated: A

    Savings specialist Raisin continues to gain momentum. The savings account marketplace now has itself 100,000 customers. The company is also integrated with more than 40 banks, from across 18 European countries, including a number of challenger banks and even an online lender (Younited Credit). SolarisBank is its newest partner.

    ConsenSys Ventures has made its first four investments (TechCrunch), Rated: B

    But the companies the fund is backing come from some relatively seasoned entrepreneurs. BlockFi, the firm’s lending for liquidity startup, was founded by Zac Prince — a serial startup founder whose previous idea was the lending platform for the underbanked, Cognical.

    Up to 5% Cashback On Long-Term Investments Offered by Mintos (P2P-Banking), Rated: B

    Lativan p2p lending marketplace Mintos just launched a cashback campaign running for the remainder of December. Investors investing in new loans with a term of at least 24 months on the primary market will receive a cashback of 2% to 5% depending on term length. The cashback will be credited within 6 days says Mintos.

    Important: To be eligable an investor needs to enroll once for the campaign by clicking on the promotion banner inside the Mintos dashboard.

    International

    Salt and Coinloan Promise Crypto-Asset Backed Fiat Loans (Bitcoin.com), Rated: AAA

    Typically, when we think of taking a loan, we think of going to a bank, filling out a ton of paperwork and then getting denied the loan unless a guarantor or cosigner signs as well. However, blockchain banking startups like Salt and Coinloan aim to change this by creating a peer to peer lending platform on the blockchain. These platforms allow users to leverage their bitcoin and other cryptocurrencies as collateral for fiat loans.

    Salt hails from the land of the free, a.k.a Denver, Colorado, USA.

    On the other hand, Coinloan has Baltic roots and is headquartered in Estonia.

    Salt will be starting straight out of Denver, Colorado and is set to launch their blockchain backed lending platform, BTC collateralized loans and loan fund by the end of 2017. In 2018, they will be launching ethereum collateralized loans in Q1, credit cards in Q2 and altcoin collateralized loans in Q3.

    By contrast, Coinloan is still currently running their ICO. By 2018, they hope to obtain payment licences in Q2, develop mobile applications for IOS and android by Q3 and enter the Asian market in 2019.

    Lendoit & RSK creates a decentralized BTC lending future together (Live Bitcoin News), Rated: A

    In about 2 weeks, Lendoit will launch its official token Pre-sale, but it can’t wait to reveal the secret that will change the future of decentralized BTC lending, which the company has entered together with the largest and most promising blockchain-based project, The RSK Project.

    Right from Argentina is Rootstock or popularly called RSK. This company is well-known for its open-source smart contract stage which has a 2-dimensional peg to Bitcoin. Amazingly, RSK uses merge-mining to reward bitcoin miners and give them the chance to be part of the smart contract ecosystem.

    The Goal? To ensure that the highest level of functionality and value is added to the entire bitcoin ecosystem through the use of smart contracts, increased scalability, and near-instant payments.

    Lendoit removes all intermediaries in the lending process, creates a trusted and secure platform for participants through the smart contract, and gives users a decentralized, anonymous platform where upscaling, lending, and borrowing are done hassle-free.

    Source: Live Bitcoin News

    PNC Live On New Real-Time Payments Network Using Finastra (Payment Week), Rated: A

    PNC, a top-10 US bank by assets, is live on RTP, The Clearing House’s new US real-time payments system, using Finastra’s payment services hub, Fusion Payments.

    “The ability to make an immediate payment at any time, on any day of the week, with a real-time confirmation of the payment significantly transforms the way businesses and consumers make payments in the United States. Emerging technologies such as RTP are creating opportunities for banks and clients to re-imagine our business models.”

    Trulioo Recognized As a Global Leader in Digital Identity Verification (PRWeb), Rated: B

    Trulioo, the global identity verification provider, is delighted to be recognized as the global identity verification leader in a recent comprehensive report published by Let’s Talk Payments (LTP).

    India

    Why America could miss out big time on India’s fintech revolution (TechCrunch), Rated: AAA

    Morgan Stanley expects India’s digital payments penetration to increase from 5 percent today to 20 percent, and the e-commerce market to reach $200 billion, with 475 million e-commerce shoppers, adding up to a GDP upwards of $6 trillion — all by 2027.

    India now has 800 million mobile phone users with 430 million having internet connectivity. According to Morgan Stanley, the number of internet users is expected to grow to 915 million by 2027.

    Source: TechCrunch

    In 2016, China’s digital payments were already 50 times America’s. Alibaba and Tencent understand ecosystems better than anyone else in the world, including American companies.

    Asia

    After success at home, Toss sets sights overseas (Korea JoongAng Daily), Rated: AAA

    After emerging as one of the top fintech start-ups in Korea, Viva Republica, the company behind Korea’s top peer-to-peer transfer app Toss, is zeroing in on Southeast Asia as its next target market.

    “While more than 70 percent of the population is using smartphones, their financial services are equivalent to that of Korea in the 1980’s. Our goal is to bring our story and product to Southeast Asian countries such as the Philippines and Vietnam and to improve the level of financial services in the market.”

    As of November this year, the accumulated transactions through Toss reached 10 trillion won ($9.2 billion). In November alone, the platform handled more than one trillion won, a feat that comes just two and half a years since it launched in February 2015. The company said its annual sales will come to 20 billion won by the end of this year and reach the break-even point sometime next year.

    M’sian regulators likely to enforce licensing for cryptocurrency exchanges (The Star), Rated: B

    Malaysian regulators are looking to clamp down on initial coin offerings or ICOs by expanding the definition of “securities” in existing laws, according to industry sources.

    The regulator is also likely to require some form of licensing for cryptocurrency exchanges to operate on Malaysian shores.

    Mexico

    Mexican Senate passes fintech law (Reuters), Rated: A

    Mexico’s Senate on Tuesday approved a bill that would regulate its fast-growing financial technology sector, including crowdfunding and cryptocurrency firms, paving the way for a vote by the lower house.

    The bill, which seeks to promote financial stability and defend against money laundering and financing of extremists, is expected to pass in a final lower house vote by Dec. 15, said three sources familiar with the measure.

    Authors:

    George Popescu
    Allen Taylor

    Monday November 6 2017, Daily News Digest

    SoFi CLP 2017-6 structure

    News Comments Today’s main news: Lending Club considering bid for bank charter. N26 to launch in the UK. TransferWise hooks $280M investment for APAC expansion. Zopa vows rate hike won’t impact loan performance. Hexindai debuts on NASDAQ with 60% increase. Westpac profits AU$7.99B. Kaodim raises $7M. Today’s main analysis: SoFi’s latest consumer lending deal. Today’s thought-provoking articles: How payment tech is […]

    SoFi CLP 2017-6 structure

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    Australia

    India

    Asia

    Middle East

    News Summary

    United States

    Lending Club eyes charter as landscape evolves (Global Capital), Rated: AAA

    Lending Club is exploring the idea of operating as a bank or obtaining a fintech bank charter in order to keep pace with a changing lending and regulatory landscape, an executive from the marketplace lender said on Thursday.

    Speaking at the Digital Lending + Investing conference in New York, Valerie Kay, Lending Club’s head of institutional investor group, said that the platform is considering both pathways as the business grows.

    How payment technology is being disrupted (The Next Web), Rated: AAA

    One of the earliest changes involving the payment industry is how banks and customers behavior is shifting with one another. Quite simply, people have different expectations with how money should move, as well as how quickly. This is a cross-generational phenomenon and something that banks are trying to keep up with.

    According to Bank Innovation, approximately 70 percent of millennials now do their banking online.

    According to Business Insider, peer-to-peer payments alone are on pace to be worth $86 billion by 2018. And with the popularity of apps like VenmoPayPal, and even Square Cashcontinuously on the rise, this trend doesn’t show signs of slowing down anytime soon.

    CurrencyPay, an online payment system that not only finances major equipment for businesses, but extends online payment methods from credit and debit cards to include ACH or wire, all the while reducing fees across the board.

    SoFi’s Latest Consumer Lending Deal (PeerIQ), Rated: AAA

    On Thursday, President Trump announced his nomination of Jerome Powell to succeed Fed Chairwoman Janet Yellen as the next chairman of the central bank.

    Also on Thursday, President Trump rolled out his new tax plan which reduces the number of tax brackets from seven to four and cuts the corporate tax rate to 20% from 35%. Relevant to marketplace lenders, the tax plan reduces the mortgage interest deduction cap by half.

    SoFi’s Latest Consumer Lending Deal

    SCLP 2017-6 is the largest deal on SoFi’s shelf, and the first since SCLP 2017-5, which priced concurrently with Mike Cagney’s resignation. As we discussed in our previous blog post, SCLP 2017-5 priced slightly wider on the news (10 to 15 bps). SoFi’s latest consumer lending deal, SCLP 2017-6, is the first deal from SoFi with borrowers living in FEMA declared disaster areas, comprising approximately 12% of the deal.

    Source: PeerIQ, Company Filings, Kroll Bond Rating Agency, S&P

    SCLP 2017-6 Structure
    Although it may seem that SoFi is structuring deals more aggressively, the A and B classes have higher initial CE when compared to SCLP 2017-5 by 2.38% and 0.76% respectively.

    Source: PeerIQ, Company Filings, Kroll Bond Rating Agency, S&P

    Square’s Jack Dorsey: We’re moving as fast as we can with bank application (Fast Company), Rated: A

    “I think the [regulatory] environment really changes depending on who you’re talking about,” says Dorsey, who traveled to New York this week for the unveiling of Square Register, a new hardware device. “There’s a lot of appreciation for the fact that we’ve spent eight years serving an underserved customer, an underbanked customer, both on the seller and the individual side.” Before Square unveiled its signature card reader, he adds, micro-merchants “couldn’t participate in the economy in the way that the economy was moving.”

    Investors see “perfect storm” in marketplace loan ABS (Global Capital), Rated: A

    An investor roundtable at the Digital Lending + Investing conference in New York on Thursday highlighted developments in the securitization of marketplace loans over the last 12-18 months. The transition to a hybrid funding model for lenders, in addition to the emergence of more sophisticated deal structures, have …

    MoneyLion takes on America’s savings crisis with the launch of MoneyLion Plus (BusinessWire), Rated: A

    Despite solid economic and wage growth in the U.S. since the 2008 crisis, a host of studies point to critically low rates of savings and widening income inequality among American consumers. In the face of this savings crisis, mobile consumer finance platform, A monthly subscription gives MoneyLion Plus members access to the following benefits:

    • Guided savings: MoneyLion Plus makes it easy and convenient to save $50 or more per month. MoneyLion’s technology analyzes each member’s cash flows to determine when to set aside and save money from their checking account. Via the MoneyLion mobile app, members are provided with personalized daily budgeting tips to help them optimize their spending and increase their savings even further.
    • Fully-managed investment account: The funds saved are automatically invested into a fully-managed investment account featuring a diversified portfolio of ETFs built to suit the financial needs and life stage of each member, all without any additional trading or management fees. These portfolios are based on simple investment strategies that will help members grow their wealth.
    • Low-cost access to credit: Unexpected expenses can reset savings back to square one, preventing longer-term growth of wealth. Access to personal loans with APRs of 5.99% or less, regardless of credit score, offers MoneyLion Plus members an affordable means to manage their cash flow needs and avoid costly overdraft or late payment fees. 
    • Cashback bonus: MoneyLion Plus offers its members additional rewards, including an instant $1 cashback bonus deposited into a member’s investment account each day they log into the MoneyLion app. Members also earn rewards based on their investment account balance.
    • MoneyLion mobile app: Members can access all of their benefits on-the-go via MoneyLion’s mobile app, including viewing their savings progress, getting personalized tips and offers for saving more, and accessing their loan funds in just a few taps.

    Credit Karma Launches Online Vehicle Center (Finovate), Rated: A

    Consumer credit monitoring and financial health startup Credit Karma has launched a new offering today that changes those routines. The company’s new automotive information center is a one-stop shop for helping consumers to manage and organize their vehicle-related finances and information. Included among the capabilities are an overview of the user’s DMV profile, with vehicle and drivers license information, vehicle value estimations, and manufacturer recall notices.

    The two most notable capabilities are the auto insurance score and comparison tool and the vehicle refinancing decision tool.

    Fintech Lenders Are Holding Larger Portion of the Personal Loan Market (Lend EDU), Rated: A

    During the Digital Lending + Investment Conference in New York, the consumer credit reporting agency Transunion released the results of a study called ”Fact versus Fiction: FinTech Lenders.” In a nutshell, the study concluded that fintech lenders were not riskier than other lenders, and they are starting to represent a more significant part of the loan industry in the USA.

    By the end of the year, the fintech lenders comprised 30 percent of outstanding personal loan balances which is up from four percent in 2012. Up through June in 2017, fintechs represented 32% of the personal loan market.

    In the second quarter of 2016, 14.8 million people had a personal loan; after one year, that number increased to 16.1 million. Additionally, the total outstanding personal loan volume more than doubled from $45 billion in Q2 2012 to $106 billion by Q2 2017.

    Wells Fargo Launches New Banking App “Greenhouse” (Crowdfund Insider), Rated: A

    Banking giant Wells Fargo announced on Thursday the launch of its new banking app, Greenhouse. The company described the app as a new mobile banking experience that provides tools to help consumers manage their money and know where they stand financially. 

    According to Wells Fargo, consumers using the Greenhouse app will be able to have money management with two accounts that work together, immediate access to their Greenhouse account, and the ability to send and receive payments.

    Marketplace Lending News Roundup – November 4 (Lend Academy), Rated: A

    Redpoint Capital Group Sells Stake to Dundon Capital Partners (BusinessWire), Rated: A

    Redpoint Capital Group, LLC (“Redpoint Capital”), a leading alternative credit manager, announced today that it has agreed to sell a stake in its affiliated General Partner and Management Company to an affiliate of Dundon Capital Partners, LLC (“DCP”). DCP is led by Thomas (“Tom”) Dundon, one of the founders and former CEO and Chairman of Santander Consumer USA (“SCUSA”), a leading publicly-traded non-captive finance company.

    As part of the transaction, both Tom Dundon and DCP Partner, John Zutter, will sit on Redpoint Capital’s Board of Directors along with Redpoint Capital Managing Partners Alex Dunev and Andy Thomas.

    Digital Lending Innovation Starts with the Simple Things, Bank of America Says (Bank Innovation), Rated: A

    Financial services should focus on “making the easy stuff really easy,” Schleck said yesterday during a panel discussion at the American Banker Digital Lending and Investing conference in New York.

    Schleck was the sole representative from a traditional bank during the discussion, with fellow panelists hailing from alternative fintech companies and lenders  – Lending Club, Funding Circle, and Varo Money.

    The key to BofA’s innovation in this space was a cross between data (also highlighted by others on the panel) and simplicity, Schleck said, pointing to the bank’s success with mobile direct deposit as an example.

    Citizens Digitizes SMB Lending Process With Fundation (PYMNTS), Rated: A

    Citizens Bank is enhancing its small and medium-sized business (SMB) lending offering by digitizing the loan application process, according to a press release published by the financial institution (FI) on Thursday (Nov. 2).

    The bank is launching a new platform, built in collaboration with alternative online lender Fundation, allowing SMB customers of the bank to apply for a loan or line of credit and receive an approval online.

    BlackRock pivots to US west coast as part of tech push (Financial Times), Rated: A

    BlackRock is pivoting its business to the US west coast, moving Mark McCombe, head of Americas, to San Francisco as part of a broader plan by the world’s top asset manager to step up its focus on technology and innovation.

    More than 40 per cent of BlackRock’s $5.9tn in client assets are managed from San Francisco, which accounts for a third of group revenue.

    New Online Portal Offers Loans Up to $ 500,000 to African American Entrepreneurs in Chicago (Black Enterprise), Rated: A

    The national advocacy group Small Business Majority, national online lender Fundera, and micro-lender Accion have developed SimpleGrowth, a new online lending marketplace. Calling SimpleGrowth a first-of-its-kind local lending portal, officials say the platform will allow African American entrepreneurs in Chicago to connect with area lenders via a website.

    Individuals can seek loans ranging from $500 to $500,000 at various rates, depending on the business owner’s readiness and other factors.

    There are 230,000 small businesses in Chicago, but an unusually high percentage of those businesses are owned by African Americans. Cook County, Illinois—which includes Chicago—has the most African American-owned small businesses of any county in the country at 110,000, the U.S. Census Bureau’s 2012 analysis of small businesses reports.

    The financing will come from Chicago lenders including Accion, Local Initiatives Support Corporation Small Business and the Women’s Business Development Center, all Community Development Financial Institutions that support small business entrepreneurship. Businesses can apply for the loans for free.

    LoanDepot Starts JV (Orange County Business Journal), Rated: B

    LoanDepot LLC, the nation’s second largest non-bank consumer lender, announced a joint venture with OfferPad, a real estate investment company, to speed up the process of mortgage approval.

    The joint venture will be a stand-alone mortgage broker with LoanDepot acting as the wholesale lender, Calle said. It is expected to launch in the first quarter and will be based in Phoenix.

    Online Lender Better Mortgage Names Jeff Corbett New Director of Business Development (Crowdfund Insider), Rated: B

    Better Mortgage, a digital mortgage company working to improve access to home financing through transparency, honest guidance, and zero loan officer commissions, announced on Friday it has appointed Jeff Corbett as its Director of Business Development and adding him to its growing Strategic Partnership team.

    Silicon Valley Start-ups Join the Line-up for Blockchain Expo North America (Coinspeaker), Rated: B

    Amongst those speaking is Karma – a cross-border peer-to-peer lending platform, working to eliminate inefficiencies in the P2P lending industry. Karma will be taking to the stage in the ICOs, Tokens and Cryptofinance conference track on November 29, to introduce their service to delegates ahead of their closed ICO sale later this month.

    Goji Appoints Peter Breitstone As New CEO (Crowdfund Insider), Rated: B

    Specialist provider of P2P and marketplace lending products and services, Goji, announced on Friday it has appointed Peter Breitstone as its new CEO. According to the company, Breitstone has over 20 years of senior executive leadership experience at several global insurance companies, including Insureon, Zurich, and Aon. Breitstone also built and ran Environmental Partners, an insurance brokerage specializing in Environmental Risk and Insurance Management, which he sold to Aon.

    Weekly WealthTech Report: The First CEFEX-Certified Robo (Wealth Management), Rated: B

    PlanCorp is putting its experience and research into a new hybrid robo advisor called BrightPlan, which it says is the first of its kind to be certified by the Centre for Fiduciary Excellence for providing prudent fiduciary practices to clients. The online service offers goals-based financial planning without requiring users to invest.

    Clients can choose either a digital-only service, or tap into Plancorp’s team of wealth managers.

    United Kingdom

    European Fintech N26 to Launch in the UK in Early 2018 (Crowdfund Insider), Rated: AAA

    N26, a digital-only challenger bank based in Germany, announced on Friday it is launching its services in the UK in early 2018. This news comes after the fintech startup announced plans to launch in the U.S. next year. UK customers may now get early access by signing up directly on the company’s UK homepage.

    TransferWise announces $ 280m investment round as company looks towards APAC expansion (AltFi), Rated: AAA

    The international money transfer service raised $280m in a Series E round as it plans for global expansion and challenge to banking disruptors.

    The round was led by asset management firm Old Mutual Global Investors (OMGI), investing funds managed by its small and mid-cap UK equities desk, and Silicon Valley venture capital firm IVP.

    Zopa says rate hike will not impact loan performance (P2P Finance News), Rated: AAA

    ZOPA has reassured investors that the Bank of England’s interest rate hike will not impact the performance of the peer-to-peer platform’s loans.

    On Thursday, the central bank raised the base rate from 0.25 per cent to 0.5 per cent – the first increase in a decade.

    LendInvest to enter BTL market after securing new funding line (Bridging&Commercial), Rated: A

    LendInvest has agreed a long-term financing facility with Citi which will help the lender enter the UK’s £40bn buy-to-let market.

    LendInvest now manages over £500m of lending capital on behalf of its institutional investors.

    UK interest rates rise for first time in 10 years (Growth Business), Rated: A

    For the first time in more than ten years, the Bank of England has raised interest rates. The official bank rate has been lifted from 0.25 per cent to 0.5 per cent, the first increase since July 2007.

    The hike has divided opinion and it is yet to be seen how severely the impact will hit the UK. Mr Carney expects banks to pass on the rate rise to savers, but said many mortgages, loans and credit cards would not see an immediate impact.

    With an alternative outlook, Giles Cross, CMO at FOLK2FOLK, says, “For years low interest rates have been bad news for consumers wanting a positive return on their money in real terms. So today’s announcement may come as a small relief to many people who are looking for an increase. Whilst the reality is that consumers may not see the outcome passed on from their financial services provider or bank for a long time.

    British fintech lender Cashplus seeks licence (Times of Malta), Rated: A

    Cashplus said yesterday it will soon apply for a UK banking licence as part of the British fintech firm’s plan to step up its challenge to traditional banks.

    The move will allow Cashplus to convert the £200 million of customers’ funds it holds into bank deposits, its chief executive Richard Wagner told Reuters.

    Volkswagen explores obtaining UK banking licence (Financial Times), Rated: A

    Volkswagen is preparing to apply for a UK banking licence so it can carry on providing finance to motorists after Britain leaves the EU.

    Lendy considers offering auto-invest products (P2P Finance News), Rated: A

    LENDY is seeking views from investors on the introduction of an auto-invest product.

    The peer-to-peer property lender has issued a survey to its customers to find out their views on a product that would self-select loans for lenders.

    Simon Champ of P2PGI and Pollen Street Capital (Lend Academy), Rated: A

    In this podcast you will learn:

    • How Simon first became interested in the online lending space.
    • Simon’s original goal when he started P2PGI.
    • What it was like trying to raise the initial capital for the fund in 2014.
    • How many platforms they launched with initially.
    • The scope of the fund: both lending verticals and geographies.
    • How Brexit and the currency challenges of the British Pound has impacted the fund.
    • How the fund has evolved from P2P to a broader direct lending focus.
    • The main challenge of pure peer to peer lending platforms.
    • How they are using leverage today at P2PGI.
    • The P2PGI approach to due diligence and how they decide to make an investment in a new platform.
    • The historical returns of the fund and Simon’s views of the challenges here.
    • His view on the poor performance at US consumer platforms in 2015 and 2016.
    • Why P2PGI left Marshall Wace and merged with Pollen Street Capital.
    • Simon’s view on the evolution of the lending space and where it is going.

    CoInvestor Provides First Digital Access For Advisers Into LendInvest’s Real Estate Opportunity Fund (MondoVisione), Rated: A

    CoInvestor, the alternative assets platform, has been chosen by LendInvest Capital as a preferred method for UK advisers to invest in its Luxembourg-domiciled Real Estate Opportunity Fund.

    Interview with Stuart Law, CEO and co-founder of Assetz Capital (P2P-Banking), Rated: A

    Assetz Capital is now the UK’s second-largest peer-to-peer business and property lender and also the second largest in Europe.

    What are the three main advantages for investors?

    Firstly, we only lend to businesses who we assess as credit worthy businesses with tangible assets.

    Secondly, we cater for all types of investors.

    Thirdly, we are also the only major UK P2P platform to still offer a manual investment option.

    What are the three main advantages for borrowers?

    Rather than being just a website with automated credit assessments, Assetz Capital is run by finance, banking, credit and lending professionals with huge industry experience, alongside our large UK-wide network of employed Regional Relationship Directors who visit potential borrowers and help structure the loans.

    We’re also a lean business, and as such we have lower overheads than traditional lending institutions.  Coupled with the fact that we only lend to credit worthy businesses holding tangible assets, this means our cost of borrowing for businesses is kept low.

    Assetz Capital has succeeded in growing loan originations sharply in the past 12 months. How did you achieve that and were intermediaries like brokers a major factor?

    To date, more than 350 successfully funded projects have come through brokers, and we predict that this will grow to approaching 1,000 by the end of the 2018 year.

    Singaporean sovereign wealth fund piles into OakNorth fundraise (AltFi), Rated: A

    Challenger bank OakNorth entered into the UK’s stable of unicorns in October when it raised £154m.

    The £154m round valued OakNorth at £934m (approximately $1.3bn). The money came from three investors, The Clermont Group, Toscafund and Coltrane, which collectively took a 16 per cent stake in the company. Today, the trio has been joined by a fourth investor: GIC, Singapore’s sovereign wealth fund.

    Anyone for a Crowd VCT? (AltFi), Rated: A

    Currently the excellent Wise Alpha is plastered all over the Waterloo and City line. And in recent months Crowdcube has also been blasting out adverts at the Waterloo train station. Not to be outdone, Seedrs is making a regular appearance on the London tube as are a whole number of digital banking apps. Even Abundance in recent years has been making an appearance on billboards at railway stations as far away as Winchester. Now we’re seeing Funding Circle blasting out its message nationwide as part of its multi-million-pound advertising campaign.

    This is all very welcome, but I think it poses some broader questions about what the alternative finance space needs to make itself seem more mainstream. I see no reason why a big player such as Funding Circle shouldn’t use big national brand advertising, but I doubt its overall effectiveness.  My sense is that much smaller, baby steps are needed to mainstream the sector and originate new customers – and, crucially, build brand acceptance amongst investors.

    Three alternative reasons to consider peer-to-peer investing (Your Money), Rated: B

    However, any investment where capital is at risk – such as alternative lending – is not covered by the Financial Services Compensation Scheme (FSCS) and should not be considered as a substitute for cash deposits. So, why should investors look at the burgeoning alternative lending sector? There are three possible reasons:

    • Diversification
    • Funding your income needs
    • Managing pension allowances – Alternative lending certainly offers attractive returns relative to other investment options, as well as against cash at the bank. ThinCats has achieved average returns for investors of 7%-8.5%(as at 11 Oct).

    Hello Soda Raises £5.5M in Funding (FINSMES), Rated: B

    Hello Soda, a Manchester, UK-based international big data and text analytics company, raised £5.5m in equity and debt funding.

    China

    Chinese peer-to-peer lender Hexindai shrugs off tighter scrutiny concerns, rising more than 60pc on Nasdaq debut (SCMP), Rated: AAA

    Shares in Hexindai, China’s fifth biggest P2P lender, surged more than 60 per cent on its Nasdaq debut on Friday, shrugging off looming concerns of possible tighter scrutiny on P2P lending platforms by Chinese authorities.

    Shares in the company traded up 65 per cent to US16.50, just 20 minutes into the listing under the symbol HX, from its offering price of US$10 per American depositary share. The company aims to raise up to US$88 million through the flotation.

    China’s unicorns face questions over fundraising (Financial Times), Rated: AAA

    Jianpu Technology, the Chinese financial comparison site poised to list later this year, has been stripped of its status as a “unicorn” worth $1bn after regulatory filings revealed it had inflated the funds raised from investors.

    Peer-to-peer lender Ppdai’s fundraisings detailed in its filing also fall short of earlier disclosures, according to calculations by Crunchbase, which collates its data from a variety of mostly publicly available channels, including US Securities and Exchange Commission documents.

    Qudian’s initial public offering prospectus put its bad-loan ratio at 0.5 per cent — an unusually low but not impossible figure, especially if was selling off bad debt to third parties, which is a common practice among online lenders.

    Source: Financial Times

    Qudian’s prospectus did not advertise a clear pre-IPO fundraising figure. However, Crunchbase says the company raised about $873m from a number of investors before it went public.

    Source: Financial Times

    Chinese auto-trading IPO may prove to be a lemon (NASDAQ), Rated: A

    Yixin could raise more than $800 million in a Hong Kong float. The Chinese firm wants to be to cars what Ctrip has become for mainland travellers: a one-stop online shop. It is well-positioned for China’s car boom and changing attitudes towards borrowing, but a punchy valuation means it could struggle after listing.

    China’s car market is booming. And Yixin smartly targets people born from the 1980s onwards. They are more open to borrowing than their thrifty parents, and many don’t have credit scores, making it tricky for them to borrow from banks instead.

    Yixin Group, an online auto-trading and financing company backed by Chinese internet giant Tencent, is planning to raise up to $867 million through an initial public offering in Hong Kong, Thomson Reuters publication IFR reported on Nov. 2.

    IDG Capital, CreditEase help retail investors tap new economy (China Daily), Rated: B

    Leading venture capital firm IDG Capital and Credit Wealth Management, an independent wealth management arm of CreditEase Group, has formed a comprehensive strategic partnership at the latter’s 2017 private equity investment forum held in Beijing on Friday.

    The system enables analysis of 20,000 institutions via 60 dimensions such as styles of their management teams, when they exit from companies they have invested in and who buy into these companies.

    European Union

    Early Facebook Backer Tied to Russia Bank, Kushner Platform (Bloomberg), Rated: A

    A prominent Silicon Valley investor who was an early backer of Facebook Inc.partnered in two investments with the Russian state-controlled bank VTB Bank PJSC before it was sanctioned, his spokesman confirmed Friday.

    Yuri Milner, the Russian-born founder of DST Global, also invested $850,000 of his personal money last year in Cadre, a real-estate investing platform co-founded and partially owned by the family of Jared Kushner, President Donald Trump’s son-in-law and senior adviser. Milner’s spokesman said that VTB played no part in his Cadre investment, which was done solely on the business merits of Cadre.

    You too can become an investor in exciting new Irish innovation (Independent), Rated: A

    Backing young companies sounds expensive and risky but it doesn’t have to be either. Today with no more than €50 you can start lending to fledgling Irish businesses through a peer-to-peer platform like Linked Finance. The same €50 could back numerous new ideas on a crowdfunding platform like Fund It.

    Today there are 17,000 people lending a total of over €35m through Linked Finance alone but there’s €99bn more sitting in Irish deposit accounts, according to the Central Bank’s July 2017 figures.

    International

    An Acceleration in Fintech Capital Raising (Lend Academy), Rated: AAA

    The recent CB Insights Fintech Trends Briefing points to the rise in fintech financings as Q3’17 saw 278 deals to VC-backed fintech companies, the largest quarter since Q1’12. While total capital invested is down 25 percent from Q2’17 to $4bn the pace of the deals show investors appetite for fintech companies is still very strong.

    Facial recognition startup Megvii Face++ raised $460mn in their most recent investment round led by China State-Owned Venture Capital Fund and the China-Russia Investment Fund.

    German based online lender Spotcap raised $26mn in equity and debt funding.

    Credit Sesame, a San Francisco and Mountain View, Calif. – based personalized credit service and financial wellness company, raised over $42mn in funding.

    FS Card Inc., a Washington, DC-based financial services company focused on underserved consumers, raised a $150mn credit facility.

    Finova Financial, provider of fair and affordable digital alternatives for Americans underserved by the traditional banking system, secured $102.5mn in equity and credit facility funding.

    LendingHome, a San Francisco, CA-based real estate marketplace lender, raised $457mn in capital, which includes both permanent equity and the launch of LendingHome Opportunity Fund II.

    BlueVine, a Redwood City, CA-based provider of working capital financing to small and medium-sized businesses, secured up to $130mn in debt capital financing.

    OakNorth, a London, UK bank that provides debt finance to fast-growth businesses and established property developers, received a $202mn investment.

    SalaryFinance, a London U.K.-based innovative financial wellbeing employee benefits company, completed a $52mn funding round.

    How banks can use ETHLend to reduce interest rates globally (TechBullion), Rated: A

    P2P platforms are great for smaller loans (i.e. paying off credit cards or repairing a damaged car), but they might not be as affordable and available for larger purchases (i.e. a home purchase or a new car). Especially in developing markets, such larger finance goals might be out of reach due to the lack of credit scoring systems or access to capital in the first place.

    Now, how could ETHLend be used to fulfill this market? Let us imagine that a bank or an institutional financer is looking to finance asset backed loans. They have a minimum loan amount of $100,000, and because of this they will be unable to accept loan terms for smaller loans. These banks and institutional financiers would be able to go onto the ETHLend platform, and offer their liquidity to another investor (wholesale borrower) who has large amounts of digital tokens (cryptocurrency) to pledge as collateral.

    The investor (wholesale borrower) can then take that $100,000 they got from the bank and turn around and offer loans on a smaller scale to people on the platform or in their local markets, whom do not need to pledge collaterals.

    Lendoit – The Decentralized Marketplace Lending Platform Where Everyone Benefits (Chipin), Rated: A

    Current P2P platforms are not really P2P because they need to have intermediaries like issuing banks or trust accounts for the system to work. This is a problem as intermediaries usually lack transparency and are also restricted geographically.

    For instance, the annual interest of a loan in Brazil may be more than 50% while it is only 1% in Japan.

    Source: Chipin

    Lendoit is a decentralized peer-to-peer lending marketplace platform that connects borrowers and lenders globally in a fast, easy, and extremely secure manner by using the blockchain and smart contracts.

    With the blockchain, Lendoit is able to automate all of the processes required in P2P money lending without sacrificing anything. Instead, everything will be much cheaper and more efficient which is exactly the solution to problems of cross-border loans.

    Smart Loan Contracts contain the borrower’s details including his or her score as well as containing the conditions of loans and their respective tenders.

    The Smart Reputation Contract works similarly to credit score; in Lendoit, they act as the global score of an Ethereum address and can be utilized for other purposes other than credit transactions.

    The Smart Conversion Contract is responsible for converting currencies into the LOAN token when it comes to making transactions on the platform.

    Lendoit Global Payments will launch a token for sale for the aptly named LOAN token.

    • Token name: LOAN
    • Token base: Ethereum (ERC-20 compliant)
    • Token supply: TBA
    • Token sale duration: December 13th, 2017

    P2P Lending Offers Participants More Efficiency and Convenience in the Financial Services Sector (NewsBTC), Rated: B

    The global lending marketplace market is projected to reach $290bn. by 2020, with an expected compound annual growth rate of 51% from 2014-2020.

    Colombia Fintech Startups Alegra and Bankity to Compete for Funding at Finnosummit in Miami Next Week (Finance Colombia), Rated: A

    Later this month in Miami, a group of 10 Latin American fintech startups will gather in Miami to compete. Two companies, Alegra and Bankity, are from Colombia and will be vying against peers from Mexico, Brazil, Argentina, and Chile for the $50,000 USD prize.

    The competition is part of Visa’s Everywhere Initiative and will be taking place within Finnovista’s larger Finnosummit on November 9 in Florida’s largest city.

    Bankity offers the first intelligent banking card in Latin America.

    Alegra, founded by Santiago Villegas and Jorge Soto, is also great because it aims to help small business owners with tedious tasks like invoicing and reporting with its cloud-based accounting software.

    Blockchain is bringing the sharing economy to everyone (VentureBeat), Rated: A

    The sharing economy relies on a distributed workforce, shareable assets, and peer-to-peer transactions and contracts. Companies in these emerging marketplaces handle payments through smart contracts and blockchain technology. This greatly lowers costs, improves trust and transparency with the community, and simplifies transactions at a global scale by making them near-instantaneous, even when distributing payments to thousands of digital wallets at once.

    One of the biggest markets for data is social media and online retail. DataWallet, based in San Francisco, helps users download their digital identity and upload it to a blockchain-powered data exchange where companies can purchase it, with payments made to users through the blockchain.

    Ride-sharing company LaZooz, based in Tel Aviv, is building a decentralized, Uber-like app that uses blockchain to pay drivers and other community participants. WeTrust, in Fremont, CA, is doing something similar in the peer-to-peer lending space, charging only a max fee of .3 percent instead of 1 percent, like LendingClub.

    Australia

    Westpac posts AU$ 7.99b yearly profit, sends digital Customer Service Hub live (ZDNet), Rated: AAA

    Westpac has processed its first live home loans through its new technology platform, the Customer Service Hub, with the bank saying the initiative aimed at speeding up and simplifying the home loan process as its largest transformation program to date.

    For the 2017 financial year, the bank reported AU$7.99 billion in after-tax profit, on revenue of AU$21.8 billion, an increase of 4 percent year-on-year.

    As of September 30, 2017, Westpac boasted 13.8 million customers; 4.53 million were considered digitally active, with 72 percent of them using a mobile platform.

    Additionally, through its AU$100 million venture capital firm Reinventure, Westpac has made 16 investments covering areas such as blockchain and digital currencies, payments, peer-to-peer lending, as well as big data and data analytics.

    The bank also this year entered into a “strategic” relationship with Australian-listed payments firm Zipmoney, investing AU$40 million by way of a private share placement in August to allow the integration of the fintech’s products and services across Westpac’s network throughout Australia, as well as other initiatives including the provision of in-development business-to-business products and services.

    In April, the bank went live with Samsung Pay, opening up the phone-based wallet to debit and credit card cardholders across both Mastercard and Visa. This came a year after it launched Android Pay, in addition to Westpac’s own tap and pay function, which was unveiled to customers in 2014.

    Banks wealth models are ‘unravelling’ (Financial Review), Rated: A

    Independent investment and superannuation platforms like Hub24 and Netwealth are readying to reap the rewards of the “unravelling” of the bank’s traditional wealth management models.

    The best interest duty is a key plank of a package of financial advice reforms, known as the Future of Financial Advice (FOFA), introduced in July 2013. This was tested with the corporate watchdog recently ordering Melbourne-based financial planning firm to pay $1.1 million in fines and costs as part of the first civil penalty imposed for breaching its duty to act in the best interest of its clients.

    Last week, BT Financial Group (BTFG) said it would expand its life insurance APL from its sole in-house product, adding a minimum of three alternative insurers by March next year.

    Increasingly, these platforms are snaring a fair whack of adviser business in the $750 billion platform market, which is growing at 10 per cent a year.

    Netwealth has about $16 billion in funds under advice and more than 2000 financial advisers and planners using its services. When it lists on the ASX with an $879.2 million market capitalisation late next month, it will be the second biggest IPO of the calendar year to date

    Australian FinTech SelfWealth IPO Offering Self Directed Investors Alternative to Traditional Broker Trading (BusinessWire), Rated: A

    SelfWealth Limited (“SelfWealth” or “the Company”), an Australian FinTech business offering a flat fee brokerage service and social portfolio construction network for Australian investors, is pleased to announce the opening of its Initial Public Offering (IPO) to raise up to A$7.5 million (with a minimum subscription of A$5.0 million).

    SelfWealth is offering for issue 37.5 million shares priced at A$0.20 per new share; the indicative market captialisation of SelfWealth will be approximately A$26.1 million. The Company’s ASX ticker code will be SWF.

    India

    Here are four lending platforms that are helping unbanked SMEs (The Hans India), Rated: A

    Despite being a major part of the Indian economy, Small and medium-sized enterprises (SMEs) in India face multiple challenges.

    From inadequate banking to lack of constant cash supply, these SMEs are deprived of the smooth and consistent growth factors

    These four SME lending platforms are bridging the requirements digitally:

    1. Lendingkart – The company aims to transform small business lending by making it convenient for SMEs to access credit easily.
    2. CoinTribe – Another online loan disbursement platform, CoinTribe provides quick and easy collateral-free loans to small businesses and individuals.

      It is the only online lending platform which has back-tested its credit model with large banks.

    3. Faircent – Largest peer to peer lending website, Faircent caters to retail and business loans.
    4. TAB Capital – The platform has commissioned an advanced proprietary algorithm that leverages big data and analytics to simplify and accelerate loan application, verification, approval and disbursement.

    China’s Fosun leads $ 10 million round in fin-tech startup Kissht (VC Circle), Rated: A

    OnEMi Technology Solutions Pvt. Ltd, which runs lending startup Kissht, has raised $10 million (Rs 67 crore) led by China’s Fosun International, a report in a financial daily stated.

    In June this year, the startup raised $2 million (around Rs 13 crore) from Endiya and Ventureast.

    India’s Largest Bank Goes Big on Blockchain (Cryptocoins News), Rated: B

    The State Bank of India is gearing up to implement blockchain solutions in a number of financial processes including the management of its Know Your Customer (KYC) system.

    SBI is now pressing ahead with its first implementation of the decentralized technology by using an enterprise blockchain solution for managing its Know Your Customer (KYC) system, via a new partnership with Intel that sees the technology giant become the consortium’s official technology advisor.

    Asia

    Square Peg, SIG Asia lead $ 7m round in SEA service marketplace Kaodim (Deal Street Asia), Rated: AAA

    Southeast Asian service marketplace Kaodim Group has raised $7 million (MYR 29.5 million) in a funding round led by Australia venture capital firm Square Peg Capital and Shanghai-headquartered SIG Asia Investments.

    A clear path to transforming Singapore’s financial services sector (Channel News Asia), Rated: A

    Minister for Education (Higher Education and Skills) and Monetary Authority of Singapore board member Ong Ye Kung unveiled the Industry Transformation Map (ITM) for the financial services sector on Monday (Oct 30).

    The ITM outlines key growth strategies for the financial sector that aim to generate greater productivity, attain higher growth rates, and create 4,000 jobs each year up to 2020.

    These include strengthening financing channels for small- and medium-sized enterprises (SMEs), simplifying the regulatory framework for venture capitalmanagers, introducing dual class share structures for high-tech companies, and encouraging other sources of private sector financing for start-ups and entrepreneurs.

    According to a Deutsche Bank report released last year, debt burdens have risen from less than 240 per cent of GDP in 2009 to 265 per cent in 2015. This is largely due to Singapore’s high levels of private sector leverage, for which there are limits to greater growth.

    Singapore plays fintech evangelist on global mission (Business Times), Rated: A

    IN TWO short years, Singapore has zipped into pole position in the fintech space, challenging rivals such as London in drawing intellectual and funding capital into the city-state with its open adoption of new technology and more broadly, innovation.

    The strategy, led by the Monetary Authority of Singapore (MAS), is now widening to a regional and global endeavour, as MAS expands into cross-border projects that could pay significant digital dividends in time.

    This will chiefly include blockchain experiments, with MAS now looking at ways to expand an inter-bank payments pilot to create a cross-border payments system between two countries, Ravi Menon, managing director of MAS, said in a wide-ranging interview with The Business Times.

    Middle East

    Seven in ten UAE residents unsure how to achieve their financial goals (The National), Rated: AAA

    Seven in ten UAE residents are unsure of the steps needed to achieve their financial goals, a poll by National Bonds revealed on Monday, as the UAE investment company launched a new campaign to encourage better saving habits.

    According to the poll of almost 400 residents conducted in the first nine months of the year, 69 per cent of respondents lack awareness about financial planning.

    Despite the lack of clarity on how to save and invest their money, 53 per cent were most interested in receiving financial advice related to retirement planning. This was consistent among Arabs, Asians and Western expats, according to National Bonds, while Emiratis are more concerned with advice on financial health.

    Authors:


    George Popescu


    Allen Taylor