Thursday December 5 2019, Weekly News Digest

Prosper monthly originations

News Comments Today’s main news: SoFi gets BitLicense in New York. Funding Circle unveils 250M GBP securitization of SME loans. Zopa raises 1.4M GBP. RateSetter to close family finance product. RMBS gears up for securitization windfall. Reserve Bank of India raises P2P lending limit by 5x. Today’s main analysis: Prosper performance update – October 2019. […]

The post Thursday December 5 2019, Weekly News Digest appeared first on Lending Times.

Prosper monthly originations

News Comments

United States

United Kingdom

European Union

India

Other

News Summary

United States

Prosper Performance Update – October 2019 (Prosper), Rated: AAA

Highlights from the report include:

  • In October, 64% of originations were rated AA-B. The dollar‑weighted average FICO on the platform was 720, relatively flat month‑over-month.
  • The weighted average income of borrowers on the platform in October was ~$106K, relatively flat month-over-month.
  • The weighted average borrower rate for October originations increased 30 bps month-over-month largely due to a shift in Prosper Rating mix.
Source: Prosper

See the full report here.

New York Gives SoFi Green Light on BitLicense (SoFi), Rated: AAA

New York State Department of Financial Services (NYDFS) has approved SoFi’s BitLicense application, allowing SoFi Invest customers in New York to trade cryptocurrencies on its platform through SoFi Digital Assets, LLC.

FT Partners’ CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA

FT Partners recently announced our role as exclusive financial advisor to 

Source: FT Partners

Financings

Source: FT Partners

See the full report here.

Online Lending Platform Refines the Science of Underwriting (CFO.com), Rated: AAA

Through the use of artificial intelligence, Upstart examines approximately 1,600 variables pertaining to loan applicants, says CFO Sanjay Datta. But he doesn’t like to draw attention to the artificial intelligence per se.

In a Nov. 8 report, Kroll rated the performances of five loan securitizations, worth a cumulative $1.5 billion, that Upstart offered from mid-2017 through early this year. Each one has significantly outperformed Kroll’s forecast at the time of the deal.

Kroll predicted that Upstart’s first securitization, dated June 21, 2017, would experience 13.07% credit losses by October 2019. But the actual losses were only 9.96%, 24% better than forecast.

Kabbage data places Vermont at third-highest small business revenue growth in the first half of 2019 (Vermont Biz), Rated: AAA

Kabbage placed Vermont at the third-highest in the nation at 173.90 on the Kabbage Index Value, based on monthly median-revenue growth for small businesses.

The Kabbage Index Value (KIV), a value used to track revenue growth of small businesses, increased almost 22 points, from 136.8 to 158.4 points, indicating U.S. small businesses’ median revenue grew 15.7% in the first six months of the year. This represents a 22% increase compared to the same time period in 2018 and a large contrast from the second half of 2018 when small business revenue only grew 1.8 percent.

Source: Kabbage

StreetShares Discontinues Major Segment of Its Financing Business (deBanked), Rated: A

StreetShares quietly discontinued a major part of its financing business on November 15, a new disclosure filed with the SEC revealed.

The company has only facilitated $180 million in funding to small businesses since inception in 2014. That would indicate that the invoice factoring portion was roughly half of the company’s funding volume.

Monzo hires Visa exec to lead US push (ZangPay), Rated: A

Monzo has hired a Visa executive — who was previously with Standard Chartered — to lead its US business as it ramps up efforts to become a fully-fledged bank in the country even though complex rules have deterred some rivals, according to the FT.

There’s a better way to regulate small-dollar lending (American Banker), Rated: A

Innovation in online lending has shifted consumers away from traditional payday lenders. And while that’s a safer bet, the shift has also sparked a misguided policy conversation around online lending that is focused on the wrong thing: capping interest rates.

Bad Credit? Regulators Back Ways for Risky Borrowers to Get Loans (WSJ), Rated: A

Consumers with spotty or no credit histories might find it easier to get loans after federal banking regulators endorsed alternatives to traditional methods of assessing creditworthiness.

The regulators on Tuesday backed the use of information such as borrowers’ cash flow as an alternative to the traditional credit-evaluation system, which relies on scores issued by companies such as Equifax Inc. and Experian PLC based on applicants’ past history of borrowing and repayments.

Assets managed by robos up 10% so far in 2019 to $ 283 billion (Investment News), Rated: A

Assets managed by digital advisers grew 10% over the first three quarters of 2019 to reach a total of $283 billion, according a new report from Aite Group, a consulting firm.

Fintech Lending Stocks Have Been a Bust. Here’s Why. (Barron’s), Rated: A

Fintech lenders were supposed to be the next big thing in finance. Big data, machine learning, peer-to-peer platforms, social networking data: the list of buzzy new ideas that were supposed to upend the business of money lending went on and on.

Bank Regulators’ Proposals Won’t Erase Madden Uncertainty (Law360), Rated: A

These Funding and Business Assistance Programs Are Helping Felons Restart Their Lives (Stamford Advocate), Rated: A

1. Prosper

Prosper is a peer-to-peer lending platform. The entire process is online, with no background check. Hence criminal history does not affect getting a loan.

2. HelpForFelons.org

HelpForFelons.org has lists of grants and loans for felons and links to reentry programs around the country.

More students from higher-income families taking out student loans (Marketplace.org), Rated: A

Whether their families are higher income, lower income, or somewhere in between, a majority of all students today take out loans to cover at least part of their undergraduate degree. Which wasn’t always the case.

In fact, over the last 20 years, the percentage of students from higher-income families — defined here as making more than $114,000 a year — who take out loans to get a bachelor’s degree has more than doubled, from 30% in the mid-1990s to 60% now, according to a new report out Wednesday from the American Enterprise Institute. The percentage of students from low-income families who take out loans is higher, just over 75%, but hasn’t increased nearly as much since the 1990s.

Source: Marketplace.org

Crypto lender hires local mayor to smooth over regulatory hurdles (Decrypt), Rated: A

Cred, a crypto lending and borrowing platform, announced earlier this week that it has added a local California mayor to its roster to further boost government relations for its business.

Ally Medina, mayor of Emeryville—a city in California, will lead the company’s strategic government relations and business development initiatives.

Payday Lender Curo Group Can’t Derail Securities Class Action (Bloomberg Law), Rated: A

Curo Group Holdings Corp. failed to shake off a proposed shareholder class action after the District of Kansas found sufficient allegations that the company didn’t disclose facts that were bound to impact its financial performance.

Curo Can’t Ditch Investor Suit Over Canada Products (Law360), Rated: B

Source: Law360

Elevate Credit to Attend the Jefferies’ Crossover Consumer Finance Summit (BusinessWire), Rated: B

Elevate Credit, Inc. (NYSE: ELVT), today announced that its Chief Executive Officer, Jason Harvison, and Chief Financial Officer, Chris Lutes, will attend the Jefferies’ Crossover Consumer Finance Summit on December 12, 2019 at The New York Lotte Palace Hotel. Mr. Harvison and Mr. Lutes will be available for 1×1 meetings with investors.

Harvard University and ArborCrowd Partner to Host Panel That Examines the Future of Commercial Real Estate Investing (Yahoo! Finance), Rated: B

On Tuesday, November 20, Harvard University’s Real Estate Development Club together with ArborCrowd (the “Company”), the first crowdfunding platform launched by a real estate institution, hosted a panel of experts at Harvard University to discuss the future of commercial real estate investing. The panel was attended by graduate students interested in pursuing a career in commercial real estate.

Finicity Solution Live Within Ellie Mae Encompass Consumer Connect (Markets Insider), Rated: B

Finicity, a provider of real-time financial data access and insights, and Ellie Mae, the cloud-based platform provider for the mortgage finance industry, today announced that Finicity’s digital Verification of Assets (VoA) solution is now available through Ellie Mae’s Encompass Consumer Connect, part of the Encompass Digital Lending Platform.

United Kingdom

Funding Circle Unveils £250 Million Securitization of SME Loans With Waterfall Asset Management (Crowdfund Insider), Rated: AAA

Marketplace lending company Funding Circle (LSE:FCH) recently unveiled its £250 million securitization of SME loans with Waterfall Asset Management. The duo reported that the portfolio brings the total amount of UK Funding Circle loans securitized to £1 billion and the deal will notably open up the small business loans asset class to an even wider range of investors such as insurance companies and pension funds.

Is the current share price of FTSE fintech company Funding Circle a bargain buy? (The Motley Fool), Rated: A

On, average Funding Circle collects 4.86% of the total amount of new loans generated annually as transaction revenue and 0.82% of the annual principal balance of loans under management in servicing fees.

Fintech Zopa raises £140m just in time for banking licence (Yahoo! Finance), Rated: AAA

Financial technology company Zopa has raised £140m, just in the nick of time to meet a key requirement of its provisional banking license.

Zopa announced on Tuesday it had secured the investment from IAG Capital, a US investment group that first backed the online lender in 2018.

Zopa valuation fall hits Augmentum Fintech but other gains buoy portfolio (AltFi), Rated: A

Zopa has seen its valuation fall by 47 per cent following its latest fundraise to a new money valuation of £188m.

The trust wrote down £10.3m in the value of Zopa and its share price has fallen has fallen 4.67 per cent as a result today.

Zopa Bank fundraising delays ‘not down to P2P lending concerns’ (P2P Finance News), Rated: A

ZOPA’S struggle to raise last-minute funding so it can launch its banking brand should not be seen as a sign of trouble for the peer-to-peer lending sector, an analyst claims.

RateSetter to close family finance loan product (P2P Finance News), Rated: AAA

RATESETTER is to stop offering its family finance product from the new year.

Uncapped raises £10M to offer revenue-based finance to growing businesses (TechCrunch), Rated: A

Uncapped, a London-headquartered and Warsaw-based startup that wants to provide “revenue-based” finance to growing European businesses, is officially launching today and disclosing that it has raised £10 million in funding.

UK start-up Student Finance raises €1.15m to tackle university loans (Fintech Futures), Rated: A

Educational technology start-up Student Finance has raised €1.15 million in a seed funding round led by Seedcamp and Mustard Seed Impact.

Growth Street CEO exits (AltFi), Rated: A

Greg Carter, the CEO of Growth Street, has stood down from his role.

Carter, who co-founded the business in 2014, is to remain with Growth Street in an advisory role, the company said.

Finastra joins World Economic Forum (Finastra), Rated: B

Finastra today announced that it has joined the World Economic Forum. The move will see the company collaborating with industry leaders and policy-makers to drive change across financial services, world trade and beyond, to help build a better, sustainable future.

China

China gradually cleans up P2P lending businesses (Ecns.cn), Rated: AAA

Southwest China’s Sichuan Province became the country’s latest province to ban all peer-to-peer lending (P2P) businesses amid regulators’ tightened grip on the internet financial industry due to monetary risks.

European Union

Securitization: RMBS gears up for windfall (Euromoney), Rated: AAA

Volumes have picked up since then, and RMBS-related issuance is forecast to reach $100 billion in 2019, up from $86 billion in 2018, according to Standard & Poor’s. However, the market is still a shadow of its former self. The banks still dominate mortgage lending, but not nearly to the extent that they used to. Most are quick to point out that their online disruptors have yet to perform through a cycle.

The banks still dominate mortgage lending, but not nearly to the extent that they used to. Most are quick to point out that their online disruptors have yet to perform through a cycle.

It’s securitization, but not as we knew it (Euromoney), Rated: A

There is no more ‘originate to distribute’, the grand name for the strategy behind so much of the dysfunctional lending that drove the sub-prime residential mortgage-backed securities (RMBS) crisis.

Today banks provide funding to a growing army of private and buy-side institutions that make the loans, and the banks then arrange securitization exits for them.

German fintech N26 targets IPO in 4-5 years (Reuters), Rated: A

German fintech N26, valued at $3.5 billion in its latest funding round, views a stock market listing as an attractive option, but rather in 4-5 years than in the short-term, its Germany head told Reuters.

Klarna Bank picks Amazon for expanded cloud services (American Banker), Rated: A

In a move to aid faster expansion and provide more security and regulatory compliance tools, Klarna Bank in Sweden is strengthening its longtime relationship with Amazon Web Services by making it the bank’s preferred cloud provider.

Klarna says it will leverage the AWS global infrastructure to support its scale, now at 60 million customers across 170,000 merchants in 17 countries.

European FinTech: the next generation trend setter (Finextra), Rated: A

Despite the influence of the US, we are finding something quite different when exploring the way the FinTech market is evolving. European technological innovation is having a profound effect on the approach US companies are taking, reversing the well-known ‘cultural influencing trend.’

International

International P2P Lending Volumes November 2019 (P2P-Banking), Rated: AAA

The total volume for the reported marketplaces in the table adds up to 658 million Euro.

Source: P2P-Banking

How in-branch video banking enhances customer service experience (Bob’s Guide), Rated: A

While they turn to online banking, and given the rise in digital transformation, the most customers still appreciate the need for financial advice face-to-face, especially for complex transactions or help. Accenture’s recent study of financial service consumers show that on average two-thirds of consumers favour face-to-face interaction with their bank.

A 2018 study supported by the retail banking industry group EFMA, Vidyo and CUNA Strategic Services suggested more customers would be willing to use in-branch video (90 percent) than online video banking (85 percent).

Crypto Loans See Solid Growth, Platforms Attract Community Interest (CoinTelegraph), Rated: A

Today, the entire crypto loaning industry is estimated at $4.7 billion and the number of crypto loan platforms is growing rapidly, according to a report made by blockchain company Graychain Ltd. While lenders have only earned a combined $86 million in interest since 2018, the demand for cryptocurrency loans is growing. In the first quarter of 2019, over 5,400 new loans were issued, and in the second, at least 18,500. The volume of lending also increased, with lenders issuing $64.8 million in loans in the first quarter and $159.3 million in the second.

Source: CoinTelegraph

OpenID Foundation Launches New Microsite Focused on Open Banking and Fintech Developers (OpenID), Rated: B

The OpenID Foundation has launched a new microsite focused on global open banking initiatives and providing resources for fintech developers implementing the Foundation’s Financial-grade API (FAPI).

Australia/New Zealand

Peer-to-peer lending and crowdfunding 2019 data published (Scoop), Rated: AAA

The Financial Markets Authority (FMA) today published its third statistical report on peer-to-peer lending (P2P) and crowdfunding services in New Zealand.

Year-on-year, there were 34% fewer successful crowdfunding offers and 52% less investment from licensed service investors.

India

RBI Raises Peer-To-Peer Lending Limit Fivefold (Bloomberg Quint), Rated: AAA

India’s central bank has raised the lending cap for peer-to-peer platforms fivefold, providing a boost to such lending.

The aggregate exposure of a lender to all borrowers at any point of time, across all non-banking financial company-peer-to-peer platforms, will be capped at Rs 50 lakh against Rs 10 lakh at present, the Reserve Bank of India said in a statement on Developmental and Regulatory Policies issued on Dec. 5.

A 30-year-old company is disrupting the loan marketplace business in an old-fashioned way (Economic Times), Rated: A

MyMoneyMantra is taking on rivals like BankBazaar and Paisabazaar head on. The company is growing its giant distribution network even as it swiftly expands its digital footprint to scale faster. But its physical network will remain the core business. A digital-only model just doesn’t deliver, believes its founder.

Xiaomi announces launch of digital lending solution Mi Credit in India (The News Minute), Rated: A

Xiaomi on Tuesday announced Mi Credit, its digital lending solution in India. Mi Credit is Xiaomi’s second Mi Finance solution to be launched in India after Mi Pay.

Xiaomi Offers Digital Lending Marketplace For Young Indian Consumers (PYMNTS), Rated: B

The new venture is an app called Mi Credit, and it’s a marketplace for personalized lending, offering users credit between Rs 5,000 ($70) and Rs 100,000 ($1,400). Xiaomi said it offers a “low” interest rate.

Online lending segment to witness consolidation in next 5-6 months: CASHe’s Ketan Patel (IBS Intelligence), Rated: A

The NBFC (non-banking financial company), which lends to the young salaried segment with a monthly income of Rs 15,000 and upwards, is already profitable. With a monthly run-rate of 19000 loans, the lender has  30,000 unique customers. Its CEO Ketan Patel, who had spent 18 years in Kotak Mahindra Bank before joining CASHe, told IBS Intelligence that as long as lenders use technology to focus on strong underwriting, they need not worry about collections or NPAs.

Asia

FinAccel raises $ 90 million for low-fee lending app (Impact Alpha), Rated: AAA

FinAccel’s mission is to improve financial inclusion across Southeast Asia’s “vast and fast growing middle class”. Its starting point is Indonesia, where most of the country’s 265 million people lack access to formal financial services but do have a cell phone.

Indonesian P2P lender Komunal bags seed money in East Ventures-led round (Tech in Asia), Rated: A

Indonesian peer-to-peer lending company Komunal secured an undisclosed amount of seed funding in a round led by East Ventures, with local VC firm Skystar Capital also participating.

Latin America

Goldman Makes Biggest Mexico Fintech Bet With MercadoLibre Loan (Bloomberg), Rated: AAA

Goldman Sachs Group Inc. agreed to lend $125 million to Mercado Credito, the bank’s third loan to a Latin American fintech this year and the biggest ever in Mexico.

MercadoLibre dominates Latin American e-commerce with an almost 25% market share and 40 million unique monthly visitors, Julie Chariell, a senior analyst at Bloomberg Intelligence, said in a November report. It’s based in Argentina, but almost two-thirds of its $603 million in third-quarter net revenue came from Brazil, according to the company’s financial statements. Its market value more than doubled this year to $29 billion.

The borrower, a unit of MercadoLibre Inc., plans to use the money to triple in about one year its $100 million working-capital portfolio provided to small and midsize companies in Mexico, Martin de los Santos, a senior vice president, said in a phone interview.

The Next SMB Lending Frontier (Nexoos), Rated: AAA

Source: Nexoos

See the full white paper here.

SoftBank pours $ 100M into Mexico’s Konfio (TechCrunch), Rated: A

Three months after Goldman Sachs lent $100 million to Mexican fintech Konfio, SoftBank has invested another $100 million into the financial services company. The investment confirms Reuters’ August report that SoftBank was in advanced talks with the startup — now one of the most heavily funded fintechs in Mexico.

Brazilian FinTech Rebel Lands $ 10M For Affordable Loan Products (PYMNTS), Rated: A

Rebel, a Brazilian FinTech that offers unsecured credit to middle-class citizens in the country, has raised $10 million in new equity funding, according to a press release.

Africa

Consumer credit scoring is the latest African fintech sector to get funding with $ 20 million for Migo (Quartz Africa), Rated: AAA

Migo, a fintech startup offering credit-as-a service to large companies, has raised $20 million in a Series B round led by Brazil-focused venture firm, Valor Capital Group. The round also saw participation from existing investors including The Rise Fund and Velocity Capital. It follows a $13 million Series A round in August last year.

Africa’s fintech boom is creating niche ecosystems to power the industry’s future globally (Quartz Africa), Rated: A

In the inaugural edition the Global Fintech Index City Rankings, four African cities are identified among the top 100 fintech ecosystems globally.

City Global Finech Index City rank
Johannesburg, South Africa 62
Nairobi, Kenya 63
Lagos, Nigeria 71
Cape Town, South Africa 87
Accra, Ghana 123
Kigali, Rwanda 132
Kampala, Uganda 168

Authors:

George Popescu
Allen Taylor

The post Thursday December 5 2019, Weekly News Digest appeared first on Lending Times.

Thursday August 1 2019, Weekly News Digest

Consumption loans

News Comments Today’s main news: OnDeck, Chase divorce; OnDeck to pursue bank charter. DBRS assigns provisional ratings to Upstart Securitization Trust 2019-2. RateSetter ISA passes 250M GBP in subscriptions. Iwoca doubles lending, turns first annual profit. Nubank raises $400M. Elevate Credit CEO resigns. Today’s main analysis: What the Fed rate cut means. Today’s thought-provoking articles: […]

The post Thursday August 1 2019, Weekly News Digest appeared first on Lending Times.

Consumption loans

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

OnDeck Pursuing Bank Charter, Loses Chase (Lend Academy), Rated: AAA

OnDeck had some pretty interesting updates in their earnings release which took place earlier today (Editor: July 29).

Probably the biggest shock was that Chase is concluding their partnership with OnDeck.

Chase will stop originating loans through OnDeck and OnDeck will continue to service the loans for two years.

You can view OnDeck’s Q2 earnings press release here.

Source: Lend Academy

What’s next for OnDeck after breakup with JPMorgan? (American Banker), Rated: A

In retrospect, Jamie Dimon’s comment that his bank could duplicate the capabilities of online lenders might have served as a warning.

“Can we do something like that? Of course we can,” the JPMorgan Chase Chairman CEO 

OnDeck shares slide 22% (Biz2Credit Email), Rated: B

Shares of OnDeck (According to industry expert Biz2Credit CEO Rohit Arora, OnDeck spent a lot of money marketing when they should have focused more on managing risk and developing technology – the two most important things in today’s small business lending environment.

“Their gross write-offs were 15%… and that is in an economy that is doing very well,” Arora said.

DBRS Assigns Provisional Ratings to Upstart Securitization Trust 2019-2 (DBRS Email), Rated: AAA

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes (collectively, the Notes) to be issued by Upstart Securitization Trust 2019-2 (UPST 2019-2):

— $230,208,000 Class A Notes at A (low) (sf)
— $61,558,000 Class B Notes at BBB (low) (sf)

Source: DBRS

Read the DBRS Presale Report here.

KBRA Assigns Preliminary Ratings to Upstart Securitization Trust 2019-2 (BusinessWire), Rated: A

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Upstart Securitization Trust 2019-2 (“UPST 2019-2”). This is a $358.4 million consumer loan ABS transaction that is expected to close on August 7, 2019.

Preliminary Ratings Assigned: Upstart Securitization Trust 2019-2

Class

Preliminary Rating

Expected Initial
Class Principal

A

A- (sf)

$230,208,000

B

BBB- (sf)

$61,558,000

C

BB- (sf)

$66,617,000

Europe’s startup banks are coming to America. Can they succeed? (CNN), Rated: AAA

Two of Europe’s most popular online banks are making a big push into the United States. But they may struggle to win over consumers.

Berlin-based N26 and its UK rival Monzo have signed up millions of young professionals in Europe by offering free accounts that can be opened in minutes via smartphones.
Critics say the startup European banks remind them of American online-only banks that sprang up and then disappeared during the dot-com boom.

Netflix for banking; Equifax settles (PeerIQ), Rated: AAA

But first, in industry news, Equifax settled $700 million with state and federal authorities due to the 2017 security breach. Investors are looking past the incident. Equifax’s stock price is within earshot of an all-time high.

“Netflix” Model for Banking

MoneyLion’s “all-you-can-eat” membership pricing model has distinguished itself from the pack. MoneyLion provides customers access to financial advice, loans, and other banking service. Customer’s can enjoy the lion’s share of offerings all at a bundled rate $20/month.

The near-Unicorn FinTech announced a roaring $100 M funding round led by Edison Partners and Greenspring Associates, bringing PIC to ~$200M. MoneyLion is looking to invest in broker dealer, training, and stock-investing capabilities and further distance itself from potential copycats.

Series Money Raised Valuation Services Provided
MoneyLion C $200M ~$1B Financial advice, loans, integration of other bank accounts
Chime D $309M $1.5B Debit, checking, and savings accounts with no fees
Acorn E $270M $860M Rounds up purchases and invests the change, financial education
Betterment E $275M $800M Robo-advising, savings, checking (soon), debit cards

Source: PeerIQ

Here’s what that Fed rate cut means for you (CNBC), Rated: AAA

The Federal Reserve’s decision to cut interest rates 25 basis points for the first time in over a decade marked a dramatic shift in monetary policy.

Now, interest rates are historically low, which leaves the central bank with little wiggle room in the event of a recession or if the economy stumbles. The current target range for its overnight lending rate is 2% to 2.25%.

In the past five years, the average interest rate charged on credit card debt has increased 35%.

Considering that the average household currently owes $8,390, credit card users would save roughly $1.5 billion in interest as a result of a quarter-point rate cut, a separate report by WalletHub found.

Elevate Credit CEO Resigns as Q2 Revenue Misses, Guidance Cut (Crowdfund Insider), Rated: AAA

Elevate Credit (NYSE: ELVT) announced the exit of CEO Ken Rees today a Q2 earnings release missed on top-line numbers and the Fintech lowered guidance for Q3. Current COO Jason Harvison was selected to be interim CEO as the firm seeks a full-time replacement. Rees will remain on the Board of Directors.

Japanese Online Retailer Rakuten Seeks U.S. Bank Charter (WSJ), Rated: A

Japanese online merchant Rakuten Inc. wants to open a bank in Utah to offer loans, credit cards and other financial services to customers of its existing U.S. cashback-shopping business, the company said Friday.

“We’re going to focus on that customer base we already have,” said Lee Carter, the new head of banking development at Rakuten and a former UBS Group AG executive. “That’s really the community that we want to extend additional financial services to.”

My Company Surpassed $ 7 Billion in Business By Investing in This 1 Thing (Inc.),Rated: A

In the early days of my company, Kabbage, we struggled against requests from some potential partners. They wanted customers to be able to upload traditional loan paperwork like bank statements and tax returns.

By insisting on data connections, which in 2008 was usual, we lost some potential upfront revenue but prioritized a unique customer relationship and experience that would make us a more than $7 billion lending platform just a few years later.

Online bank Green Dot reveals savings account with a rate 30 times the national average (CNBC), Rated: A

Branchless bank Green Dot is launching the highest yielding bank account in the industry.

The Pasadena, California-based bank, which gained traction with prepaid cards in the dot-com era, launched a new bank account Tuesday with 3% annual interest on savings, and 3% cash back on all online debit card purchases. The average rate for savings accounts, according to Bankrate.com, is 0.1%.

The 3% rate on a savings account is the highest for any bank in the country, according to Bankrate.

The Story of Rocket Loans and the Rebirth of Detroit (Lend Academy), Rated: A

I was in Detroit recently at the invitation of Rocket Loans CEO, Bill Parker. I do visits to fintech companies quite regularly but usually in the big hubs of New York, San Francisco or London. This was my first visit to Detroit for a couple of decades so I was excited to see how the city had changed. And you can’t really tell the story of Rocket Loans without also talking about the city of Detroit.

Quicken Loans is the crown jewel of the financial component of Rock Ventures. It is now the largest mortgage lender in the country, bigger than even the largest banks. They seem to be slowly moving away from that brand, though, and moving to Rocket Mortgage which has a much more modern and innovative feel.

BofA terminates First Data partnership (Finextra), Rated: A

Bank of America is to terminate its merchant services partnership with First Data when the ten-year contract expires in June 2020.

The news came within hours of Fiserv acquiring control of First Data, sending its shares downward.

BofA says it expects to incur an impairment charge of about $1.7 billion to $2.1 billion in Q3 2019 due to the termination of the partnership, which started in 2009.

Open Banking Takes On Bad Rap Of Merchant Cash Advance (PYMNTS), Rated: A

The merchant cash advance is considered the payday loan for many in the small business lending market — and that’s not necessarily a good thing. While designed to connect small business owners to quick capital for a boost to their cash flow, the MCA has earned a reputation for some predatory behavior, like sky-high interest rates and fees.

Man Repeller and Klarna Collab on “Dream Closet” Pop-Up at Showfields (Sourcing Journal), Rated: A

Fashion and lifestyle blog Man Repeller is taking operations offline through a pop-up retail collaboration with Klarna. Opening at Showfields in New York on Monday, the “highly instagrammable” retail space was crafted to represent a shopper’s “dream closet,” Man Repeller said in a statement. Curated by the Man Repeller team, the temporary store includes offerings…

Visa pitches a program offering fintechs faster market access through an ecosystem of partners (TechCrunch), Rated: A

Visa is pitching a new way for startups in the fintech space to get to market faster by using its rails and a group of pre-approved partners.

Chiefly, the process makes it easier to integrate with Visa. It’s an attempt to put the payment processor’s network, VisaNet, at the center of a vast array of services ranging from payroll to business to business payments and online banking, online lending and even digital wallets.

The Most Exciting Piece Of Opportunity Zone Investing Is Still Being Defined (Benzinga), Rated: A

Despite the enthusiasm they have received from the private equity world and the billionaire hedge fund set, a majority of investors have been mostly shut out of the conversation surrounding the Opportunity Zones initiative included in the 2017 Tax Cuts and Jobs Act.

Although there is already a flood of capital being funneled into qualified funds (upward of $40 billion according to the National Council of State Housing Agencies’ Opportunity Zone Fund Directory) Opportunity Zones remain an ongoing experiment in maximizing the benefit to both investors and the communities in which they invest.

According to Thomas McDonald, Investment Product and Portfolio Manager of the online real estate investing platform CrowdStreet, the new language is a critical move for the program.

Real estate lending platform Groundfloor raises $ 3 million through crowdfunding (Housingwire), Rated: A

Groundfloor, a real estate lending platform that raises its loan funds via crowdfunding from the public, announced Wednesday it raised $3 million from 1,580 investors, while also doubling its annual revenue in the second quarter of 2019.

Groundfloor is taking private real estate lending public (Groundfloor Email), Rated: B

As we close out the first half of the year, we’re excited to report accelerating growth and strong financial results for the quarter. Once again, GROUNDFLOOR more than doubled its year-over-year revenue for the quarter to $1.6 million, 1H revenue to $2.6 million and trailing 12-month revenue to $4.4 million.

OCC’s innovation pilot gets little love from banks (American Banker), Rated: A

The OCC received 19 comment letters on a pilot program announced in April meant to provide supervisory clarity as national banks pursue “novel activities” in which regulatory uncertainty is perceived to be a barrier to development.

Melissa Koide of FinRegLab (Lend Academy), Rated: A

Our next guest on the Lend Academy Podcast is Melissa Koide, the founder and CEO of FinRegLab. They have just published their first research report this week on the use of cash flow data in underwriting. It is the first independent research done on this topic and it is milestone for both FinRegLab and the fintech community.

Zerocard aims to reduce overspending with “debit-style” credit card and rewards (CNBC), Rated: A

Fin-tech company Zero announced on Tuesday, July 30, the public release of Zerocard, a credit card providing a “debit-style experience” issued by WebBank and backed by Mastercard.

Zerocard aims to be an alternative to credit cards from big banks that make money off cardholders who fall into debt.

Genesis Reports $ 746 in Crypto Lending/Borrowing Originations in Q2: Best Quarter Ever (Crowdfund Insider), Rated: A

Genesis, a digital asset trading and lending platform that is also a broker-dealer registered with FINRA, and a BitLicense holder with the New York State Department of Financial Services, reports that its services are booming.

According to a release from last week, Genesis’ Q2 performance was the best over as it topped $746 million in loans/borrowing – a 48% quarter over quarter increase.

Genesis states that total active loans increased to $454 million – a 149% increase over Q1.

Northwest Community Credit Union Short-Term Loans, Powered by QCash Financial’s Platform  (Yahoo! Finance), Rated: A

Headquartered in Eugene, Oregon, Northwest Community Credit Union (NWCU) launched two new products earlier this year called Northwest Cash and Northwest Cash Plus, offering short-term loans from $150 to $700 and $701 to $4,000, respectively. Both products are designed to help their members deal with unexpected cash needs with an easy to use application process.

Using QCash Financial’s white-label, digital lending platform, NWCU automated the loan process using the member’s credit union relationship to make the lending decision rather than credit history.

Kony Secures $ 37 Million in Financing from BMO (Finovate), Rated: B

An infusion of $37 million in debt financing from BMO will help cloud-based digital banking and low-code platform company Kony “accelerate growth” in its two signature solutions: Kony DBX, the company’s digital banking technology, and Kony Quantum, its low-code development platform. The financing, courtesy of BMO’s Technology and Innovation Banking Group, adds to the more than $115 million in funding Kony has raised to date.

White Oak Commercial Finance Responds to Increasing ABL Demand with New Key Hires (GlobeNewswire), Rated: B

White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, announced today the addition of two new professional underwriters, further increasing the company’s originations presence across the United States. Mr. Sudhir Chaudhry joins White Oak’s Los Angeles office bringing nearly 25 years of structured finance and underwriting experience. Mr. Kevin Maitland joins White Oak in Boca Raton with over 14 years of asset-based lending and commercial banking experience.

FINICITY INTEGRATION WITH ELLIE MAE ENCOMPASS DIGITAL LENDING PLATFORM NOW LIVE  (Finicity), Rated: B

Finicity, a provider of real-time financial data access and insights, and Ellie Mae, the leading cloud-based platform provider for the mortgage finance industry, today announced that Finicity’s digital Verification of Assets (VoA) solution is now available through Ellie Mae’s Encompass Digital Lending Platform.

United Kingdom

RateSetter ISA passes £250m in subscriptions (LoveMoney), Rated: AAA

But by investing within a large, diverse portfolio of loans (RateSetter’s portfolio is currently £875 million with 250,000+ loans) investors get the stability of scale and this makes for steady and predictable returns.

And putting this inside the ISA tax-free wrapper, it’s no wonder that in less than 18 months since launch, RateSetter’s Innovative Finance ISA has attracted more than £250 million of investments from people looking to put their money to work.

Platforms may be forced to favour high net worths due to incoming 10pc rule (P2P Finance News), Rated: AAA

RETAIL investors are at risk of being shut out of the peer-to-peer lending sector due to the so-called 10 per cent rule that will come into force this December.

However, a number of P2P lending platforms have a minimum investment of £1,000, which would mean that individuals must have at least £10,000 in total to invest across a variety of asset classes. Official statistics indicate that most UK adults do not have this amount of money to invest, which could effectively bar them from certain platforms.

P2P lenders such as Zopa, Funding Circle and ThinCats require a minimum investment of £1,000, but the FCA’s latest financial lives survey shows that 49 per cent of UK adults, equating to 25 million people, either have no such assets or have less than £10,000 in value.

Iwoca doubles lending, turns first annual profit (AltFi), Rated: AAA

Iwoca almost doubled its loans last year, leading to its first annual profit since the small business platform was founded eight years ago.

The London-based fintech, started by chief executive Christoph Rieche (pictured, centre) and James Dear in 2012, said loan originations jumped by 91 per cent to £325m, as its lending hit the equivalent of 12 per cent of the UK’s small business overdraft market over the last year.

Former RateSetter executive to launch new P2P platform (P2P Finance News), Rated: A

RATESETTER’S former chief technology officer John Gillespie is preparing to launch a “next generation” peer-to-peer consumer lending platform.

After raising money from family and friends, SquareDeal.Finance has opened pre-registration for a funding round on equity crowdfunding platform Seedrs.

Gillespie has described the platform as “the next generation P2P consumer lender”, although he said there would be scope to expand into other types of finance in the future.

Digital asset lending platform outlines new framework in a bid to resemble securities market (The Trade Crypto), Rated: A

A digital asset lending platform is looking to set new industry standards with the launch of a framework using master agreements typically seen from incumbent capital markets bodies.

The Global Digital Assets Lending Agreement (GDALA) was developed by Lendingblock, with legal counsel and support from Norton Rose Fulbright.

The platform, targeting institutional investors, will use master agreements framework similar to ISLA’s Global Master Securities Lending Agreements, ICMA/SIFMA’s Global Master Repurchase Agreements and ISDA’s Master Agreements.

What to Know About Alternative Lending (Nav), Rated: A

Alternative lending includes business lenders that exist outside of the traditional lending space. The different types of alternative lending these lenders provide include short-term business loans, medium-term business loans, lines of credit, invoice financing, equipment financing, merchant cash advances and more. They don’t typically include bank loans or SBA loans.

ARBUTHNOT SPECIALIST FINANCE STRENGTHENS TEAM WITH TWO NEW APPOINTMENTS (Arbuthnot Latham), Rated: B

Arbuthnot Specialist Finance (ASFL) announces the appointment of Chloe Skae and Molly Markey to the relationship management team.

OakNorth completes loan to Kexgill for latest student accommodation development at the University of Hull (Fintech Finance), Rated: B

Fintechs invited to enter £2m affordable credit challenge (P2P Finance News), Rated: B

THE TREASURY and innovation foundation Nesta Challenges are offering £2m in prize money to encourage fintechs and community lenders to work together on affordable credit solutions.

Over 5.4 million high-cost short-term credit loans were made in the year to 30 June 2018, according to the Financial Conduct Authority’s consumer credit data.

China

China’s Generation Z Is Hooked on Credit (Bloomberg Businessweek), Rated: AAA

At one point in June last year, Zeng Jinpeng was more than 10,000 yuan ($1,500) in debt to a smartphone app.

Formal household borrowing rose to 54% of gross domestic product in the first quarter, up more than 4 percentage points in a year. China’s ratio is still lower than that of the U.S. (66%), Hong Kong (72%), or South Korea (100%), according to S&P Global.

Source: People’s Bank of China

Regulators last year launched a crackdown on peer-to-peer lending, which besides being a source of easy credit had also become a popular investment vehicle. The sector has shrunk to less than half its peak size as a result of forced shutdowns. Official data showed that almost 70% of China’s 50 million P2P investors were younger than 40.

New era of technological finance faces spectrum of challenges (Global Times), Rated: A

Online attacks against China’s peer-to-peer (P2P) platforms have been rising. An industry report released on Wednesday shows that more than 10 million malicious attacks were encountered by the online financial sector in the first half of 2019, and gambling-related attacks accounted for over 56 percent.

China Lending Arranges Partnership With Zhong Lian in Consumer Financing (CapitalWatch), Rated: A

China Lending Corp. (Nasdaq: CLDC) announced Monday its five-year strategic partnership with Zhong Lian Jin An Insurance Brokers Co. Ltd. in the development of consumer financing and litigation guarantee business, sending its shares up 4 percent intraday to 88 cents apiece.

European Union

Is ‘Hodling’ the Future of Cryptocurrency Lending? (150sec), Rated: AAA

The nascent cryptocurrency sector is renowned for its volatility.  It’s very early days in the development of the industry and with that, various niches are emerging within its overall purview.  DeFi or decentralised financing is one such area.  Over many years, the world of retail and business sector lending has seen little in the way of disruption.  However, that may be in the process of changing.

Firms like Ripio Credit Network (RCN), Salt Lending, EthLend, and WeTrust are emerging, providing their unique twists on financing with blockchain as a basis to their respective propositions.  Within Europe too, the market is innovating. Hodl Finance is one such entity – which is harnessing this newly emerging economy to provide its unique take on financing.

Engaging shoppers is hard. Keeping them is harder. (Candy Industry), Rated: A

New research from Klarna, a Swedish firm that offers interest-free installment payments among other payment solutions, suggests shoppers will only tolerate such aggravations for so long.

Through a survey of 2,065 shoppers conducted in May and June, Klarna found 55 percent of consumers say one bad retail experience would stop them from returning to a brand. Nearly 30 percent of consumers said they don’t find shopping as fun as it used to be.

Klarna also noted 39 percent of the 250 retailers surveyed realize shopper loyalty isn’t just driven by rewards programs. Nearly 70 percent understand they have to do more to retain customers, but just over a third of retailers are struggling to keep up with changing consumer expectations because of outdated technology and a short-term emphasis on sales.

International

The Fintech Revolution: Who Are The New Competitors In Banking? (Forbes), Rated: AAA

In Asia, Africa and Latin America, the percentage of unbanked people exceed 60% in all cases. However, people in this segment of the population do own a mobile device.

The massive use of mobile phones has allowed great successes, such as that of M-Pesa in Kenya and ten other African countries, which over the past decade has enabled more than 30 million users to transfer money, take out loans and make deposits using mobile phones, from the remotest rural areas.

The Pulse of Fintech H1 2019 (KPMG), Rated: A

Both the number of global fintech deals and the total global investment in fintech dropped in H1’19, raising $37.9 billion across 962 deals, driven by the lack of  mega deals seen in 2018.

Source: KPMG

Catching attention in marketing (Business Daily Africa), Rated: A

Kiva, with its African headquarters in Nairobi, thrives as a peer-to-peer lending website whereby millions of US dollars get lent from around the world at zero percent interest rates. In 2009, dozens of competitors of Kiva emerged based largely off their business model: get generous individuals to lend their money for a few months up to a few years all while earning no interest return as long as the funds go towards helping entrepreneurs.

Australia

4 small business tips to kickstart the 2019/20 financial year (Mozo), Rated: A

And Australian businesses have access to a number business loan sources including traditional banks and online lenders, although according to online lender OnDeck, some small businesses can have trouble securing funding from traditional sources.

New research from the lender found that nearly 25% of small to medium enterprises (SME’s) that have applied for business finance with a bank have been rejected – a figure that rises to 37% of SMEs which have been operating for less than five years.

India

P2P Lender Rupeecircle launches Affordable Credit Products for Rural Tamil Nadu (IndianWeb2), Rated: AAA

Digital lending marketplace RupeeCircle has set up a segment-wise model of credit disbursement through its P2P platform. Deserving Individuals and families belonging to certain communities who were hitherto declined loans from banks and NBFCs due to lack of sufficient credit history or lack of a proper bank account can now avail loans on the P2P platform.

Asia

Vietnam tech company NextTech pledges US$ 10M fund for early-stage startups (e27), Rated: AAA

Vietnam-based tech company NextTech announces a total of US$10 million injected into Next100, a fund dedicated for backing early-stage startups.

Recently, Next100 invested in VayMuon.vn, a P2P lending platform based in Vietnam, Heyu.asia, a startup that provides order consolidation and shipper services, and Teky.edu.vn, a tech academy for kids.

Latin America

Fintech decacorn Nubank raises $ 400M led by TCV (TechCrunch), Rated: AAA

Brazil-based Nubank, which offers a suite of banking and financial services for Brazilian consumers, announced today that it has raised a $400 million Series F round of venture capital led by Woody Marshall of TCV. The growth-stage fund is best known for its investment in Netflix but has also made fintech a high priority, with over $1.5 billion in investments in the space. According to Nubank, the company has now raised $820 million across seven venture rounds.

Shares in Brazil’s Banco Inter surge as it lures SoftBank (Business Recorder), Rated: A

Shares in Banco Inter SA surged more than 20% on Tuesday as the Brazilian online lender raised 1.25 billion reais ($329.73 million) in an offering largely sold to Japan’s SoftBank Group Corp, boosting pressure on traditional banks.

Africa

Reaching the unbanked — MTN to shake up Nigeria’s fintech sector (the africa report), Rated: AAA

In the latest bullish development, OPay, founded by Norwegian browser company Opera and which includes lead investors such as Sequoia China, raised $50m to partly fund its expansion in Nigeria.

While sub-Saharan Africa’s number of adults with a bank or other financial account increased to 43% in 2017, up 9% from 2014, Nigeria’s banked population dropped to 40%, down 4% from 2014. Over half of Nigerian adults — 60 million people — lack access to financial services.

Under the new mobile-money framework, MTN will drive user acquisition with its large existing subscriber base and powerful agent network. With a 42% market share of Nigeria’s 163m active voice subscriber accounts, MTN has a huge pool of untapped demand as each voice subscriber represents a potential new mobile money account.

Authors:

George Popescu
Allen Taylor

The post Thursday August 1 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.

    Tuesday April 3 2018, Daily News Digest

    FT Partners

    News Comments Today’s main news: SoFi issues $2.6B in ABS notes in Q1 2018. GreenSky files for IPO. China’s P2P lenders brace for more regulations. FinanZero raises $3.6M. Today’s main analysis: FT Partners’ CEO alternative lending market analysis. Today’s thought-provoking articles: Cities with highest share of cash-out refinance borrowers. Retailers grow financial services capabilities. India’s unsecured instant loan interest rates […]

    FT Partners

    News Comments

    United States

    United Kingdom

    China

    International

    Australia

    India

    Other

    News Summary

    United States

    SoFi Issues a Record $ 2.6 Billion in ABS Notes in the First Quarter of 2018 (PR Newswire), Rated: AAA

    SoFi announced today that it completed $2.6 billion in loan securitizations in the first quarter of 2018, a 35% increase over the prior-year period and its largest-ever quarterly ABS issuance volume.

    In Q1 2018, SoFi completed a total of three securitization transactions: two student loan ABS offerings ($960 million SOFI 2018-A Notes and $869 million SOFI 2018-B Notes) and one consumer loan ABS offering ($774 million SCLP 2018-1 Notes). The SoFi 2018-B Notes marked the first time SoFi included medical residency loans as a part of the collateral.

    LendingTree Ranks Cities with the Highest Share of Cash-Out Refinance Borrowers (PR Newswire), Rated: AAA

    LendingTree today released the findings of its study on where cash-out refinancing was most prevalent in the past year.

    Cities with the highest share of cash-out borrowers

    Source Lending Tree

    Cities with the highest cash-out loan amounts

    Source Lending Tree

    Fintech Firm GreenSky Files Confidentially for IPO (Wall Street Journal), Rated: AAA

    Financial-technology firm GreenSky LLC has confidentially filed paperwork with the Securities and Exchange Commission for a sizable initial public offering that could come as soon as this summer, according to people familiar with the matter.

    The Atlanta company, which operates a lending platform that enables retailers, health-care providers and home contractors to offer loans to their customers, could seek to raise $1 billion at a valuation of roughly $5 billion, some of the people said.

    FT Partners’ CEO Monthly Alternative Lending Market Analysis  (FT Partners), Rated: AAA

    This month’s report features an exclusive interview with Manu Smadja, co-founder and CEO of MPOWER Financing, an alternative lender that enables high-potential international students to finance their education. In our conversation with Manu, he discusses the inception of MPOWER, along with the unique opportunities and challenges of lending to this market.

    M&A

    Source: FT Partners

    Read the full report here.

    Max Levchin To Participate In A Keynote Fireside Chat At LendIt Fintech USA 2018 (PR Newswire), Rated: A

    LendIt Fintech announced today that Max Levchin, Co-founder and Chief Executive Officer of Affirm, a financial services technology company that is reimagining consumer credit and banking, will be featured in a keynote fireside chat on April 9. The world’s most prominent and emerging fintech CEOs from Wall Street to Main Street will gather April 9-11 at Moscone Center in San Francisco to focus on the hot-button topics and issues exploring the future of finance.

    In a session titled The future of credit: Reimagining the financing ecosystem, Levchin’s keynote fireside chat will delve into how the retail industry has evolved and how retail experiences are continuing to grow beyond the capabilities of traditional credit and lending. Levchin will share his thoughts on why the industry needs to reimagine the financing ecosystem from the ground up in order to unlock the future of credit. Levchin will also discuss why Affirm is committed to reinventing credit, starting with the belief that it should help improve consumers’ financial lives in addition to financing their purchases.

    Kabbage: Small Businesses Turning To Mobile Lending In Big Numbers (Payment Week), Rated: A

    Sometimes, businesses need ready cash to get from “the latest bills” to “the next paid invoice,” and that’s where lenders are coming in. A new report from Kabbage says that small businesses are turning to mobile devices to get in on that lender funding in increasing numbers.

    Kabbage surveyed almost 150,000 small businesses, and found that loans accessed by mobile device had increased better than three-fold, over 360 percent, of what they were back in April 2014. While the total numbers went through the roof, the value of the loans accessed went through the roof and over the treetops, having increased over 1,220 percent.

    Why Marcus Has Changed Everything (Orchard Platform), Rated: A

    Fast forward almost 18 months and Marcus is the fastest growing online lender in history. They have lent $2.5 billion in this time to 350,000 customers and have 700 employees spread across three offices. Not only that, but they have grand ambitions in the space. Goldman Sachs CEO Lloyd Blankfein has repeatedly talked about the importance of Marcus to the future of Goldman Sachs.

    According to a recent article in the Wall Street Journal the consumer banking business of Goldman Sachs is expected to generate $1 billion in revenue for the firm by 2020. That is significantly more revenue than LendingClub is expected to generate in 2018 as an 11-year- old business.

    We have heard that Barclays and PNC Financial will be launching their own lending platforms in 2018 and there are rumors that many other large banks are going to do the same.

    Most people probably don’t know Goldman Sachs offers a savings account with excellent perks — and anyone can use it with just $ 1 (Business Insider), Rated: A

    Marcus— named after the Goldman Sachs founder Marcus Goldman — allows any adult (except in Maryland, where Marcus is not yet available) to create a savings account.

    The big selling point for Marcus is the 1.5% annual percentage yield offered. Whereas interest rates for many banks have plummeted to as low as 0.01%, Goldman Sachs’ savings accounts create significant interest.

    There is also no minimum amount needed to open an account with Marcus, and a deposit of even $1 allows users to earn the 1.5% APY.

    Ohio Insurtech Root Insurance Completes Series C Round With $ 51 Million in Funding (Crowdfund Insider), Rated:A

    Root Insurance, an Ohio-based car insurtech company, announced last week it secured $51 million in funding through its Series C round, which was led by Redpoint Ventures, with Scale Venture Partners and existing partners Ribbit Capital and Silicon Valley Bank Capital Partners. 

    Root will use the new funding to expand into additional states and continue to invest in technology that significantly improves the customer experience.

    That Fast Online Loan Could Have Super-high Interest Rates and Hidden Fees That Bankrupt Your Business (Entrepreneur), Rated: A

    recent lawsuit against fintech small-business lender Kabbage Inc., charging that it partnered with a bank in order to offer interest rates that exceeded the legal limit, highlights the need for more regulatory oversight of the growing number of online lenders signing deals with small businesses.

    Online lenders are getting more scrutiny.

    The recent Massachusetts federal case brought by a small business against Kabbage (and its partner Celtic Bank) highlights why non-bank fintech lenders should be regulated. The suit alleges that Kabbage used its relationship with Celtic — which “rented” its balance sheet to Kabbage — as a basis to charge interest rates that violated usury laws.

    How Credit Karma is using data to become a central finance hub (Tearsheet), Rated: A

    It’s not a bank, but it uses customer data to help banks find customers.

    Currently valued at $4 billion, Credit Karma has 80 million customers — half of whom are millennials. The company joins a growing number of financial startups like Clarity Money, SoFi, Chime and Varo Money that are aiming to become one-stop shops for customers’ finances. The field is growing increasingly competitive. Meanwhile, banks are bundling personal finance advice into their mobile apps. But Credit Karma has two advantages its competitors often struggle with — scale and data — and it’s using a chatbot to lock in the relationship with the customer.

    A Chase Sapphire experiment is getting revived and expanded after the trial run blew away expectations with millennials last year (Business Insider), Rated: B

    Last year, ahead of the spring homebuying season — the busiest of the year — JPMorgan Chase engineered an experiment to gain an edge in the mortgage-lending competition.

    So the bank targeted its Sapphire customers, offering another 100,000 in rewards points if they closed a mortgage with the bank — a bonus worth as much as $1,500.

    HNW Clients Warming Up To Digital Advice (Financial Adviser), Rated: A

    In its report, “The Cerulli Edge—U.S. Retail Investor Edition, 1Q 2018 Issue,” the researcher found that more than one-quarter of investors over 70 who have $2 million to $5 million in investable assets said they would consider online-only engagement. Beyond that, high-net-worth investors in general seemingly are more receptive to digital advice platforms.

    In 2015, Cerulli found that 38% of investors with investable assets of $2 million to $5 million said they were willing to engage with digital providers. Last year, that number jumped to 46%. And among investors with $5 million-plus in investable assets, those numbers went from 30% in 2015 to 38% last year.

    Why borrower experience will be the principal driver of bank revenue in the lending market (Lendit), Rated: A

    Tech giants such as Google and Amazon have rewritten the rulebook for consumers when it comes to what they can reasonably expect from their service providers. Consequently, bank offerings are being judged to the same standard as the most innovative digitally native products in the world.

    The benefits of improved customer experience

    More generally, banks must focus on improving user experience to remain competitive as digitally native fintech products flood the marketplace. Focusing especially, the motivations for improving customer experience can be described as:

    •  Differentiation Financial services can no longer lean on long-standing relationships and brand positioning to generate new customer business.
    • Positive brand response in addition to research, some customers will also emphasize the emotive impression they receive from a product when making purchasing decisions.
    • Coping with an economic downturn During a recession or other global economic hardship businesses are placed under increased financial strain. Services viewed positively by their existing clients will stand a better chance of retaining their clients as well as growing their client base during the downturn.

    Pindrop Introduces New Biometric Solution: Tongueprinting (Finovate), Rated: A

    Banking Technology’s Anthony Peyton reports that the Atlanta-based anti-fraud and authentication specialist has unveiled Tongueprinting, a technology that analyses every person’s unique tongue as its newest biometric engine. Banking Technology is Finovate’s sister publication.

    The idea is for Tongueprinting to stop fraudsters from taking over legitimate accounts by spoofing the call centre with automated bots, social engineering, and knowledge-based authentication questions.  

    HomeUnion Launches Crowdfunding Platform for Individual Investors (Business Wire), Rated: A

    HomeUnion, the leader in online residential real estate investing, has launched a crowdfunding platform that allows investors to purchase stakes in funds of single-family rental (SFR) properties on its website. Starting with a minimum investment of $10,000, retail investors now have the ability to acquire interest in the HomeUnion Fix-and-Flip Fund. The fund enables consumers to invest in SFR assets acquired for fix-and-flip purposes in seven HomeUnion markets: Atlanta, Austin, Charlotte, Chicago, Dallas, Raleigh and Tampa.

    Upstart tests buyer appetite with riskier loans, more sub notes (Global Capital), Rated: A

    Online lender Upstart is the latest marketplace loan company to broaden the risk profile of its ABS, announcing a deal this week offering more subordinate bonds and backed by a higher proportion of longer term loans.

    The California-based lender, founded by ex-Google employees, uses an underwriting model which incorporates data points beyond borrowers’ FICO scores, utilizing other factors such as schools attended, areas of study, academic performance and work history.

    Is low pay hurting banks in the battle for tech talent? (American Banker), Rated: A

    Conversations about pay in the banking industry typically focus on whether executives at the top are paid too much or workers at the bottom are paid too little.

    But new data available as a result of the Dodd-Frank Act is drawing rare attention to the compensation of employees in the middle. In what will become an annual exercise, publicly traded U.S. companies are now required to disclose annually the median pay of their employees.

    Information and Data Integrity: A Two-Way Street (Lendit), Rated: A

    For many businesses, data is an important aspect of decision management. When you are choosing with whom to do business, you rely on the validity of data to guide you. If it proves faulty, you may be steered into accepting bad customers or rejecting good ones, which can seriously affect your bottom line. For consumers, inaccurate data can be equally harmful—leading to the appearance of having bad credit, denials of services or products or worse, flagged as potentially fraudulent.

    Spanning both digital and real worlds, and encompassing data about identity, financial characteristics, behaviors and more, an integrated view is the foundation of enhanced insights that can ultimately improve financial outcomes. TransUnion understands the importance of current, accurate data and gives its customers access to information—including both highly-regulated and publicly available forms of alternative data—that creates powerful, comprehensive views of consumers.

    Here’s Why Millennials Are Choosing Personal Loans (Lendit), Rated: A

    When it comes to millennial spending habits, it looks as though they’re rounding a corner to a new kind of credit. With the vast treasure trove of accumulated data available, credit bureaus like TransUnion are seeing spikes in personal loans compared to Generation X’s spending habits in the early 2000s. It’s a tremendous opportunity for marketers to capture a demographic that expects more from their lender.

    The Overarching Trends

    The newly minted adults of Generation Z are at the very beginning of their financial journey, but millennials are at the age where they’re expected to make major purchases. As they struggle with the economy and student debt, they’re making different financial choices along the way.

    Adopting New Technology

    Lenders are turning to financial technology (fintech) to help peddle their products, which millennials are all too happy to use. Ironically, applying for a personal loan without the face-to-face connection can be far more attractive than the traditional application process.

    A Decline in Credit Card Usage

    Right or wrong, credit cards have long been linked to perpetual debt in many people’s minds. In 2009, the CARD Act was introduced to place stricter limits on the marketing of credit cards at college campuses. Debit cards have become more of the rule as opposed to the exception, leaping from 8 billion transactions in 2000 to 60 billion in 2015.

    Small Business Confidence Is Up, What Does that Mean? (Lendit), Rated: A

    The year 2017 saw small business owners across the United States grow more optimistic about the future than they’ve ever been—at least since the creation of the Optimism Index by the NFIB in the 70s.  “2017 was the most remarkable year in the 45-year history of the NFIB Optimism Index,” said NFIB President and CEO Juanita Duggan.

    The Tax Bill Could be a Boon for Small Businesses

    Sole proprietorships, partnerships, and S corporations are all examples of what are called pass-through businesses; and make up roughly 95 percent of all U.S. businesses. They also happen to be many of our customers at OnDeck, and other online small business lenders. One of the main components of the new tax bill is a 20 percent tax deduction for those businesses, where business owners can “shield” 20 percent of their business income from flowing through to their personal income tax returns.

    Cincinnati-based financial tech startup raises $ 1.2 million (Cincinnati Business Courier), Rated: B

    A Cincinnati-based financial tech startup that aims to help users secure low-dollar loans without having to resort to a payday lender raised $1.2 million in venture capital.

    Mayor proposes employee loans to offset predatory lenders (Santa Fe New Mexican), Rated: B

    A few months after a new annual 175 percent cap on small-loan interest rates in New Mexico went into effect, Mayor Alan Webber is proposing a short-term loan program to help municipal workers avoid payday lending businesses viewed as predatory by consumer advocates.

    BlockFi Gives Hodlers Another Option to Borrow Against Crypto Assets (BitcoinMagazine), Rated: B

    Options for borrowing and lending with cryptocurrencies are on the rise. One of the latest start-ups to join the likes of SALT and Unchained Capital is BlockFi, a New York City–based startup that issues loans backed by bitcoin and ether to individuals, companies and institutions in 35 U.S. states.

    BlockFi takes cryptocurrency as collateral, offering interest rates on loans of around 12 percent. This is generally lower than unsecured loans and higher than loans secured with traditional assets such as securities or real estate.

    eBus to offer visitors financial advice, credit reports (The Repository), Rated: B

    The eBus is a mobile classroom which is equipped with 14 personal computers and satellite technology staffed by Fifth Third bankers and representatives from nonprofit community organizations. On the bus, visitors can request a credit report and review it with a professional; receive a personalized evaluation of finances; receive internet banking and bill pay demonstrations; speak with nonprofits about housing, money management and business advice; receive consultation on foreclosure prevention; and conduct online job searches.

    United Kingdom

    Scots ‘side businesses’ generate £1.7bn a year (The Scotsman), Rated: A

    More than 500,000 people living in Scotland have started a side business, generating a collective £1.7 billion a year out of more than £33bn UK-wide, according to new research.

    Online lender Sunny said many of those north of the Border turning to side businesses are doing so to help with the cost of bills, savings and debts, and bring in an average of £272 a month on top of their main income.

    That represents a 20 per cent increase from when they first started their business.

    China

    China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated: AAA

    China will soon be rolling out new licensing requirements for p2p lenders; The system will kick off in April with approvals slated to come at the end of this month, but many lenders aren’t aware of the filing process; in 2016 and 2017 many p2p lenders shut down and according to data there are around 2,000 remaining; it is expected that many of the 2,000 will not pass the new requirements; the new rules won’t allow platforms to guarantee loan payments and also limit loans to individuals and businesses; it will also require that platforms use custodian banks.

    China Rapid Finance Executives Selected to Speak at LendIt Fintech USA 2018 (PR Newswire), Rated: A

    China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE: XRF) announced today that the Company will participate as a sponsor and exhibitor at the upcoming LendIt Fintech USA 2018, to be held between Apr 9th and 11th in San Francisco, California.

    China: WeiyangX Fintech Review (Crowdfund Insider), Rated: A

    On March 28th, cross-border payment company iPayLinks announced that it had completed, at the beginning of this year, a hundreds of million-yuan B1 round of financing led by Tencent and followed by Legend Capital.

    NIFA Issues a Self-Discipline Convention for Debt-Collection Practitioners

    The five-chapter convention is mainly applying to regulate the behavior of overdue debt collection within the Internet Finance industry by establishing several basic principles (e.g. observing laws and regulations, prudential regulations, protecting privacy, and strict self-discipline). In other words, the document outlines a framework of debt-collection regulation in terms of discredited punishment, business management, personnel management, information management, outsourcing management, and complaints.

    China’s internet lenders fall foul of data privacy rules (Financial Times), Rated: A

    More than half of Chinese internet finance lenders are failing to comply with data privacy regulations, research has found, raising risks for investors as China steps up the implementation of laws to protect consumer data.

    The breaches include collecting phone numbers from users’ contact lists, which can be used to mount harassment campaigns and shame users into repaying debts.

    The survey of 200 finance apps by Renmin University and Nandu Personal Data Protection Research Centre, a Beijing think-tank, ranked 111 apps as having “low” compliance.

    It found that almost half — 95 apps — wanted to read users’ text messages, while 97 of them wanted access to users’ contact lists, despite such access not being necessary for the app’s functioning.

    International

    How retailers are growing their financial services capabilities (Tearsheet), Rated: AAA

    Amazon isn’t the only retailer encroaching on the financial services space. It may be the scariest — just the rumor of it entering a company’s space will send its stock price down — but ultimately, Amazon only cares about getting more buyers and more sellers to join its platform.

    Overstock’s Raj Karkara, vp of loyalty and financial services, echoed that sentiment earlier this year, saying that offering financial services or connecting customers with financial services providers is a natural extension of its retail function of buying and selling consumer goods.

    Rakuten
    Rakuten is Japan’s largest e-commerce site and has slowly been growing outside of the country. It has a footprint in media, video-on-demand, mobile messaging, e-books, travel, fashion, marketing and even sports. It also operates the largest online bank in the country.

    Overstock
    For the past few months, e-commerce company Overstock.com has been quietly building out FinanceHub, a sort of marketplace for financial services that includes existing Overstock credit cards and insurance products; loans by LendingTree, Prosper and Sofi; a robo-adviser for automated investing; and, most recently, a discounted trading platform.

    Sainsbury (and Tesco)
    Amazon may not be interested in becoming a bank but that doesn’t mean it can’t succeed in stealing customer attention from them. The U.K.’s largest grocers have all opened banks attached to their brands —  Sainsbury’s and Tesco.

    ETHLend (LEND) Token – Will It Go Down After Kyber Network Partnership? (Hot Stocked), Rated: A

    ETHLend has recently partnered up with Kyber Network. The ETHLend (LEND) Token has reached a market capitalization of 45.69 Million US dollars in the last 24 hours. The token traded 9.50%higher against the U.S. dollar during the last 24 hours ending at 10:30 AM EDTon April 2nd. That rise might be as a result of the partnership. ETHLend aims to become another decentralized and secure financial marketplace, but targeting peer to peer lending agreements via Blockchain and Smart Contracts.

    Source CoinMarketCap

     

    Australia

    SMALL BUSINESS LOANS IN AUSTRALIA: SHOULD YOU SEEK FINANCE FROM A BANK OR AN ONLINE LENDER? (Dynamic Business), Rated: A

    Considering the small business sector employs nearly half the national workforce and contributes around $380 billion to Australia’s GDP [1], it’s easy to see why it’s frequently referred to as the ‘engine room’ of the economy.

    Like all engine rooms, the sector requires sufficient fuel – in this case, working and growth capital – to not only keep running but also accelerate. However, poor access to capital remains a significant barrier to small businesses, accounting for a majority of failures in the sector.

    Part of the reason is that banks are reluctant to lend to small businesses in circumstances where the borrower doesn’t have bricks-and-mortar security – especially if a short-term loan is sought.

    APRA rejected CBA home loan data as inaccurate and incomplete (Financial Review), Rated: B

    Commonwealth Bank was being pressured by the prudential regulator to appoint external consultants and fix its flawed home lending data almost 2½ years before the Hayne royal commission began exposing the big four for sloppy administrative errors and irresponsible lending.

    The Australian Prudential Regulation Authority’s frustration with the failure of Australia’s biggest home lender to accurately identify what proportion of its loans were taken out by property investors and its level of exposure to big borrowers has been revealed in evidence tendered to the banking royal commission and published in a massive dump of more than 100 documents late last week.

    India

    Interest rates on unsecured instant loans are high (LiveMint), Rated: AAA

    Financial institutions and fintech companies have launched multiple small credit products in India in the past 1-3 years. It is now possible to get loans even on your mobile phone. But how do you pay for this convenience?

    P2P lending platform

    Peer-to-peer lending companies such as Faircent, i2ifunding and Lendbox connect lenders and borrowers on their platforms. Usually, the lender is an individual and not a financial institution. The interest rates are between 15% and 36% per annum and the loan amount can range from Rs50,000 to Rs5 lakh. The interest rate is decided based on the credit profile of the customer. Usually, the P2P lending companies take into account your Cibil credit score. The loan tenure is 3 months to 24 months.

    Fintech eco-system is moving to blockchain and AI: Rajat Gandhi, Faircent (Economic Times), Rated: A

    A lot of players have come into the fintech space. There are wallet players, then there are PPI, P2B, crowdsourcing and other payment players as well. So, regulation is one of the key challenges the private players are going through. What is your take on it?

    Surprisingly, the Indian regulators, I would say, are strict. You can see the example of NBFC P2P licences regulation. It is a good rule-based model. In fact, the players themselves were pushing for some kind of regulation because financial markets need them. It’s not like e-commerce or running a taxi where the risks are not that high.

    India’s Finzy Raises $ 1.3 Mln At Pre Series A Funding (Reuters), Rated: A

    Finzy, India’s fastest growing peer to peer lending platform, has raised USD 1.3 million in first round of Pre Series A from investors in the industry. A second round of fundraising is expected to close with pre-identified set of investors within the next 60 days.

    Latin American

    Brazilian Loan Marketplace FinanZero raises USD 3.6 million in Series A Funding Round (PR Newwire), Rated: AAA

    FinanZero is a leading marketplace for consumer loans in Brazil. The business is an independent broker for loans, negotiating the customer’s loan application with several banks and credit institutions, to find the loan with the best interest rate and terms for the consumer. FinanZero handles the lending process from start to finish.

    The Series A round was led by Swedish publicly listed investment company, Vostok Emerging Finance, with participation by other Swedish investors, including Webrock Ventures and Zentro Founders.

    Africa

    Fintech is central to Nigeria’s future success (Financial Times), Rated: A

    Central to this opportunity is an acceleration in the development of a modern banking and financial services sector. We are already seeing huge breakthroughs in digital banking and the adoption of fintech-based services by Nigerian consumers — be they retail or business customers. But this expansion must be encouraged by policies that will see greater inclusion of women and rural communities into mainstream banking activity.

    Asia

    Meet the most disruptive fintech startup in South Korea (Forbes), Rated: AAA

    Viva Republica is the most disruptive fintech startup in South Korea. Since the 2015 launch of its simple peer-to-peer payments app Toss, banks are finally revamping their user experiences and customers have easier access to financial products. South Korea’s mobile payments have more than quadrupled in that time to $4.6 billion, according to Bank of Korea data.

    The startup, funded at $76 million, hasn’t stopped there. After PayPal joined a $48 million investment in Toss in March, Toss has grown from a simple money-transfer app to a diverse consumer-finance platform generating Viva Republica’s $20 million in expected revenue in 2017. Toss thus joins Asia’s ranks of fast-growing mobile P2P payment services, reaching a $12 billion transaction volume in 2017.

    Authors:

    George Popescu
    Allen Taylor

    Tuesday April 3 2018, Daily News Digest

    FT Partners

    News Comments Today’s main news: SoFi issues $2.6B in ABS notes in Q1 2018. GreenSky files for IPO. China’s P2P lenders brace for more regulations. FinanZero raises $3.6M. Today’s main analysis: FT Partners’ CEO alternative lending market analysis. Today’s thought-provoking articles: Cities with highest share of cash-out refinance borrowers. Retailers grow financial services capabilities. India’s unsecured instant loan interest rates […]

    FT Partners

    News Comments

    United States

    United Kingdom

    China

    International

    Australia

    India

    Other

    News Summary

    United States

    SoFi Issues a Record $ 2.6 Billion in ABS Notes in the First Quarter of 2018 (PR Newswire), Rated: AAA

    SoFi announced today that it completed $2.6 billion in loan securitizations in the first quarter of 2018, a 35% increase over the prior-year period and its largest-ever quarterly ABS issuance volume.

    In Q1 2018, SoFi completed a total of three securitization transactions: two student loan ABS offerings ($960 million SOFI 2018-A Notes and $869 million SOFI 2018-B Notes) and one consumer loan ABS offering ($774 million SCLP 2018-1 Notes). The SoFi 2018-B Notes marked the first time SoFi included medical residency loans as a part of the collateral.

    LendingTree Ranks Cities with the Highest Share of Cash-Out Refinance Borrowers (PR Newswire), Rated: AAA

    LendingTree today released the findings of its study on where cash-out refinancing was most prevalent in the past year.

    Cities with the highest share of cash-out borrowers

    Source Lending Tree

    Cities with the highest cash-out loan amounts

    Source Lending Tree

    Fintech Firm GreenSky Files Confidentially for IPO (Wall Street Journal), Rated: AAA

    Financial-technology firm GreenSky LLC has confidentially filed paperwork with the Securities and Exchange Commission for a sizable initial public offering that could come as soon as this summer, according to people familiar with the matter.

    The Atlanta company, which operates a lending platform that enables retailers, health-care providers and home contractors to offer loans to their customers, could seek to raise $1 billion at a valuation of roughly $5 billion, some of the people said.

    FT Partners’ CEO Monthly Alternative Lending Market Analysis  (FT Partners), Rated: AAA

    This month’s report features an exclusive interview with Manu Smadja, co-founder and CEO of MPOWER Financing, an alternative lender that enables high-potential international students to finance their education. In our conversation with Manu, he discusses the inception of MPOWER, along with the unique opportunities and challenges of lending to this market.

    M&A

    Source: FT Partners

    Read the full report here.

    Max Levchin To Participate In A Keynote Fireside Chat At LendIt Fintech USA 2018 (PR Newswire), Rated: A

    LendIt Fintech announced today that Max Levchin, Co-founder and Chief Executive Officer of Affirm, a financial services technology company that is reimagining consumer credit and banking, will be featured in a keynote fireside chat on April 9. The world’s most prominent and emerging fintech CEOs from Wall Street to Main Street will gather April 9-11 at Moscone Center in San Francisco to focus on the hot-button topics and issues exploring the future of finance.

    In a session titled The future of credit: Reimagining the financing ecosystem, Levchin’s keynote fireside chat will delve into how the retail industry has evolved and how retail experiences are continuing to grow beyond the capabilities of traditional credit and lending. Levchin will share his thoughts on why the industry needs to reimagine the financing ecosystem from the ground up in order to unlock the future of credit. Levchin will also discuss why Affirm is committed to reinventing credit, starting with the belief that it should help improve consumers’ financial lives in addition to financing their purchases.

    Kabbage: Small Businesses Turning To Mobile Lending In Big Numbers (Payment Week), Rated: A

    Sometimes, businesses need ready cash to get from “the latest bills” to “the next paid invoice,” and that’s where lenders are coming in. A new report from Kabbage says that small businesses are turning to mobile devices to get in on that lender funding in increasing numbers.

    Kabbage surveyed almost 150,000 small businesses, and found that loans accessed by mobile device had increased better than three-fold, over 360 percent, of what they were back in April 2014. While the total numbers went through the roof, the value of the loans accessed went through the roof and over the treetops, having increased over 1,220 percent.

    Why Marcus Has Changed Everything (Orchard Platform), Rated: A

    Fast forward almost 18 months and Marcus is the fastest growing online lender in history. They have lent $2.5 billion in this time to 350,000 customers and have 700 employees spread across three offices. Not only that, but they have grand ambitions in the space. Goldman Sachs CEO Lloyd Blankfein has repeatedly talked about the importance of Marcus to the future of Goldman Sachs.

    According to a recent article in the Wall Street Journal the consumer banking business of Goldman Sachs is expected to generate $1 billion in revenue for the firm by 2020. That is significantly more revenue than LendingClub is expected to generate in 2018 as an 11-year- old business.

    We have heard that Barclays and PNC Financial will be launching their own lending platforms in 2018 and there are rumors that many other large banks are going to do the same.

    Most people probably don’t know Goldman Sachs offers a savings account with excellent perks — and anyone can use it with just $ 1 (Business Insider), Rated: A

    Marcus— named after the Goldman Sachs founder Marcus Goldman — allows any adult (except in Maryland, where Marcus is not yet available) to create a savings account.

    The big selling point for Marcus is the 1.5% annual percentage yield offered. Whereas interest rates for many banks have plummeted to as low as 0.01%, Goldman Sachs’ savings accounts create significant interest.

    There is also no minimum amount needed to open an account with Marcus, and a deposit of even $1 allows users to earn the 1.5% APY.

    Ohio Insurtech Root Insurance Completes Series C Round With $ 51 Million in Funding (Crowdfund Insider), Rated:A

    Root Insurance, an Ohio-based car insurtech company, announced last week it secured $51 million in funding through its Series C round, which was led by Redpoint Ventures, with Scale Venture Partners and existing partners Ribbit Capital and Silicon Valley Bank Capital Partners. 

    Root will use the new funding to expand into additional states and continue to invest in technology that significantly improves the customer experience.

    That Fast Online Loan Could Have Super-high Interest Rates and Hidden Fees That Bankrupt Your Business (Entrepreneur), Rated: A

    recent lawsuit against fintech small-business lender Kabbage Inc., charging that it partnered with a bank in order to offer interest rates that exceeded the legal limit, highlights the need for more regulatory oversight of the growing number of online lenders signing deals with small businesses.

    Online lenders are getting more scrutiny.

    The recent Massachusetts federal case brought by a small business against Kabbage (and its partner Celtic Bank) highlights why non-bank fintech lenders should be regulated. The suit alleges that Kabbage used its relationship with Celtic — which “rented” its balance sheet to Kabbage — as a basis to charge interest rates that violated usury laws.

    How Credit Karma is using data to become a central finance hub (Tearsheet), Rated: A

    It’s not a bank, but it uses customer data to help banks find customers.

    Currently valued at $4 billion, Credit Karma has 80 million customers — half of whom are millennials. The company joins a growing number of financial startups like Clarity Money, SoFi, Chime and Varo Money that are aiming to become one-stop shops for customers’ finances. The field is growing increasingly competitive. Meanwhile, banks are bundling personal finance advice into their mobile apps. But Credit Karma has two advantages its competitors often struggle with — scale and data — and it’s using a chatbot to lock in the relationship with the customer.

    A Chase Sapphire experiment is getting revived and expanded after the trial run blew away expectations with millennials last year (Business Insider), Rated: B

    Last year, ahead of the spring homebuying season — the busiest of the year — JPMorgan Chase engineered an experiment to gain an edge in the mortgage-lending competition.

    So the bank targeted its Sapphire customers, offering another 100,000 in rewards points if they closed a mortgage with the bank — a bonus worth as much as $1,500.

    HNW Clients Warming Up To Digital Advice (Financial Adviser), Rated: A

    In its report, “The Cerulli Edge—U.S. Retail Investor Edition, 1Q 2018 Issue,” the researcher found that more than one-quarter of investors over 70 who have $2 million to $5 million in investable assets said they would consider online-only engagement. Beyond that, high-net-worth investors in general seemingly are more receptive to digital advice platforms.

    In 2015, Cerulli found that 38% of investors with investable assets of $2 million to $5 million said they were willing to engage with digital providers. Last year, that number jumped to 46%. And among investors with $5 million-plus in investable assets, those numbers went from 30% in 2015 to 38% last year.

    Why borrower experience will be the principal driver of bank revenue in the lending market (Lendit), Rated: A

    Tech giants such as Google and Amazon have rewritten the rulebook for consumers when it comes to what they can reasonably expect from their service providers. Consequently, bank offerings are being judged to the same standard as the most innovative digitally native products in the world.

    The benefits of improved customer experience

    More generally, banks must focus on improving user experience to remain competitive as digitally native fintech products flood the marketplace. Focusing especially, the motivations for improving customer experience can be described as:

    •  Differentiation Financial services can no longer lean on long-standing relationships and brand positioning to generate new customer business.
    • Positive brand response in addition to research, some customers will also emphasize the emotive impression they receive from a product when making purchasing decisions.
    • Coping with an economic downturn During a recession or other global economic hardship businesses are placed under increased financial strain. Services viewed positively by their existing clients will stand a better chance of retaining their clients as well as growing their client base during the downturn.

    Pindrop Introduces New Biometric Solution: Tongueprinting (Finovate), Rated: A

    Banking Technology’s Anthony Peyton reports that the Atlanta-based anti-fraud and authentication specialist has unveiled Tongueprinting, a technology that analyses every person’s unique tongue as its newest biometric engine. Banking Technology is Finovate’s sister publication.

    The idea is for Tongueprinting to stop fraudsters from taking over legitimate accounts by spoofing the call centre with automated bots, social engineering, and knowledge-based authentication questions.  

    HomeUnion Launches Crowdfunding Platform for Individual Investors (Business Wire), Rated: A

    HomeUnion, the leader in online residential real estate investing, has launched a crowdfunding platform that allows investors to purchase stakes in funds of single-family rental (SFR) properties on its website. Starting with a minimum investment of $10,000, retail investors now have the ability to acquire interest in the HomeUnion Fix-and-Flip Fund. The fund enables consumers to invest in SFR assets acquired for fix-and-flip purposes in seven HomeUnion markets: Atlanta, Austin, Charlotte, Chicago, Dallas, Raleigh and Tampa.

    Upstart tests buyer appetite with riskier loans, more sub notes (Global Capital), Rated: A

    Online lender Upstart is the latest marketplace loan company to broaden the risk profile of its ABS, announcing a deal this week offering more subordinate bonds and backed by a higher proportion of longer term loans.

    The California-based lender, founded by ex-Google employees, uses an underwriting model which incorporates data points beyond borrowers’ FICO scores, utilizing other factors such as schools attended, areas of study, academic performance and work history.

    Is low pay hurting banks in the battle for tech talent? (American Banker), Rated: A

    Conversations about pay in the banking industry typically focus on whether executives at the top are paid too much or workers at the bottom are paid too little.

    But new data available as a result of the Dodd-Frank Act is drawing rare attention to the compensation of employees in the middle. In what will become an annual exercise, publicly traded U.S. companies are now required to disclose annually the median pay of their employees.

    Information and Data Integrity: A Two-Way Street (Lendit), Rated: A

    For many businesses, data is an important aspect of decision management. When you are choosing with whom to do business, you rely on the validity of data to guide you. If it proves faulty, you may be steered into accepting bad customers or rejecting good ones, which can seriously affect your bottom line. For consumers, inaccurate data can be equally harmful—leading to the appearance of having bad credit, denials of services or products or worse, flagged as potentially fraudulent.

    Spanning both digital and real worlds, and encompassing data about identity, financial characteristics, behaviors and more, an integrated view is the foundation of enhanced insights that can ultimately improve financial outcomes. TransUnion understands the importance of current, accurate data and gives its customers access to information—including both highly-regulated and publicly available forms of alternative data—that creates powerful, comprehensive views of consumers.

    Here’s Why Millennials Are Choosing Personal Loans (Lendit), Rated: A

    When it comes to millennial spending habits, it looks as though they’re rounding a corner to a new kind of credit. With the vast treasure trove of accumulated data available, credit bureaus like TransUnion are seeing spikes in personal loans compared to Generation X’s spending habits in the early 2000s. It’s a tremendous opportunity for marketers to capture a demographic that expects more from their lender.

    The Overarching Trends

    The newly minted adults of Generation Z are at the very beginning of their financial journey, but millennials are at the age where they’re expected to make major purchases. As they struggle with the economy and student debt, they’re making different financial choices along the way.

    Adopting New Technology

    Lenders are turning to financial technology (fintech) to help peddle their products, which millennials are all too happy to use. Ironically, applying for a personal loan without the face-to-face connection can be far more attractive than the traditional application process.

    A Decline in Credit Card Usage

    Right or wrong, credit cards have long been linked to perpetual debt in many people’s minds. In 2009, the CARD Act was introduced to place stricter limits on the marketing of credit cards at college campuses. Debit cards have become more of the rule as opposed to the exception, leaping from 8 billion transactions in 2000 to 60 billion in 2015.

    Small Business Confidence Is Up, What Does that Mean? (Lendit), Rated: A

    The year 2017 saw small business owners across the United States grow more optimistic about the future than they’ve ever been—at least since the creation of the Optimism Index by the NFIB in the 70s.  “2017 was the most remarkable year in the 45-year history of the NFIB Optimism Index,” said NFIB President and CEO Juanita Duggan.

    The Tax Bill Could be a Boon for Small Businesses

    Sole proprietorships, partnerships, and S corporations are all examples of what are called pass-through businesses; and make up roughly 95 percent of all U.S. businesses. They also happen to be many of our customers at OnDeck, and other online small business lenders. One of the main components of the new tax bill is a 20 percent tax deduction for those businesses, where business owners can “shield” 20 percent of their business income from flowing through to their personal income tax returns.

    Cincinnati-based financial tech startup raises $ 1.2 million (Cincinnati Business Courier), Rated: B

    A Cincinnati-based financial tech startup that aims to help users secure low-dollar loans without having to resort to a payday lender raised $1.2 million in venture capital.

    Mayor proposes employee loans to offset predatory lenders (Santa Fe New Mexican), Rated: B

    A few months after a new annual 175 percent cap on small-loan interest rates in New Mexico went into effect, Mayor Alan Webber is proposing a short-term loan program to help municipal workers avoid payday lending businesses viewed as predatory by consumer advocates.

    BlockFi Gives Hodlers Another Option to Borrow Against Crypto Assets (BitcoinMagazine), Rated: B

    Options for borrowing and lending with cryptocurrencies are on the rise. One of the latest start-ups to join the likes of SALT and Unchained Capital is BlockFi, a New York City–based startup that issues loans backed by bitcoin and ether to individuals, companies and institutions in 35 U.S. states.

    BlockFi takes cryptocurrency as collateral, offering interest rates on loans of around 12 percent. This is generally lower than unsecured loans and higher than loans secured with traditional assets such as securities or real estate.

    eBus to offer visitors financial advice, credit reports (The Repository), Rated: B

    The eBus is a mobile classroom which is equipped with 14 personal computers and satellite technology staffed by Fifth Third bankers and representatives from nonprofit community organizations. On the bus, visitors can request a credit report and review it with a professional; receive a personalized evaluation of finances; receive internet banking and bill pay demonstrations; speak with nonprofits about housing, money management and business advice; receive consultation on foreclosure prevention; and conduct online job searches.

    United Kingdom

    Scots ‘side businesses’ generate £1.7bn a year (The Scotsman), Rated: A

    More than 500,000 people living in Scotland have started a side business, generating a collective £1.7 billion a year out of more than £33bn UK-wide, according to new research.

    Online lender Sunny said many of those north of the Border turning to side businesses are doing so to help with the cost of bills, savings and debts, and bring in an average of £272 a month on top of their main income.

    That represents a 20 per cent increase from when they first started their business.

    China

    China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated: AAA

    China will soon be rolling out new licensing requirements for p2p lenders; The system will kick off in April with approvals slated to come at the end of this month, but many lenders aren’t aware of the filing process; in 2016 and 2017 many p2p lenders shut down and according to data there are around 2,000 remaining; it is expected that many of the 2,000 will not pass the new requirements; the new rules won’t allow platforms to guarantee loan payments and also limit loans to individuals and businesses; it will also require that platforms use custodian banks.

    China Rapid Finance Executives Selected to Speak at LendIt Fintech USA 2018 (PR Newswire), Rated: A

    China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE: XRF) announced today that the Company will participate as a sponsor and exhibitor at the upcoming LendIt Fintech USA 2018, to be held between Apr 9th and 11th in San Francisco, California.

    China: WeiyangX Fintech Review (Crowdfund Insider), Rated: A

    On March 28th, cross-border payment company iPayLinks announced that it had completed, at the beginning of this year, a hundreds of million-yuan B1 round of financing led by Tencent and followed by Legend Capital.

    NIFA Issues a Self-Discipline Convention for Debt-Collection Practitioners

    The five-chapter convention is mainly applying to regulate the behavior of overdue debt collection within the Internet Finance industry by establishing several basic principles (e.g. observing laws and regulations, prudential regulations, protecting privacy, and strict self-discipline). In other words, the document outlines a framework of debt-collection regulation in terms of discredited punishment, business management, personnel management, information management, outsourcing management, and complaints.

    China’s internet lenders fall foul of data privacy rules (Financial Times), Rated: A

    More than half of Chinese internet finance lenders are failing to comply with data privacy regulations, research has found, raising risks for investors as China steps up the implementation of laws to protect consumer data.

    The breaches include collecting phone numbers from users’ contact lists, which can be used to mount harassment campaigns and shame users into repaying debts.

    The survey of 200 finance apps by Renmin University and Nandu Personal Data Protection Research Centre, a Beijing think-tank, ranked 111 apps as having “low” compliance.

    It found that almost half — 95 apps — wanted to read users’ text messages, while 97 of them wanted access to users’ contact lists, despite such access not being necessary for the app’s functioning.

    International

    How retailers are growing their financial services capabilities (Tearsheet), Rated: AAA

    Amazon isn’t the only retailer encroaching on the financial services space. It may be the scariest — just the rumor of it entering a company’s space will send its stock price down — but ultimately, Amazon only cares about getting more buyers and more sellers to join its platform.

    Overstock’s Raj Karkara, vp of loyalty and financial services, echoed that sentiment earlier this year, saying that offering financial services or connecting customers with financial services providers is a natural extension of its retail function of buying and selling consumer goods.

    Rakuten
    Rakuten is Japan’s largest e-commerce site and has slowly been growing outside of the country. It has a footprint in media, video-on-demand, mobile messaging, e-books, travel, fashion, marketing and even sports. It also operates the largest online bank in the country.

    Overstock
    For the past few months, e-commerce company Overstock.com has been quietly building out FinanceHub, a sort of marketplace for financial services that includes existing Overstock credit cards and insurance products; loans by LendingTree, Prosper and Sofi; a robo-adviser for automated investing; and, most recently, a discounted trading platform.

    Sainsbury (and Tesco)
    Amazon may not be interested in becoming a bank but that doesn’t mean it can’t succeed in stealing customer attention from them. The U.K.’s largest grocers have all opened banks attached to their brands —  Sainsbury’s and Tesco.

    ETHLend (LEND) Token – Will It Go Down After Kyber Network Partnership? (Hot Stocked), Rated: A

    ETHLend has recently partnered up with Kyber Network. The ETHLend (LEND) Token has reached a market capitalization of 45.69 Million US dollars in the last 24 hours. The token traded 9.50%higher against the U.S. dollar during the last 24 hours ending at 10:30 AM EDTon April 2nd. That rise might be as a result of the partnership. ETHLend aims to become another decentralized and secure financial marketplace, but targeting peer to peer lending agreements via Blockchain and Smart Contracts.

    Source CoinMarketCap

     

    Australia

    SMALL BUSINESS LOANS IN AUSTRALIA: SHOULD YOU SEEK FINANCE FROM A BANK OR AN ONLINE LENDER? (Dynamic Business), Rated: A

    Considering the small business sector employs nearly half the national workforce and contributes around $380 billion to Australia’s GDP [1], it’s easy to see why it’s frequently referred to as the ‘engine room’ of the economy.

    Like all engine rooms, the sector requires sufficient fuel – in this case, working and growth capital – to not only keep running but also accelerate. However, poor access to capital remains a significant barrier to small businesses, accounting for a majority of failures in the sector.

    Part of the reason is that banks are reluctant to lend to small businesses in circumstances where the borrower doesn’t have bricks-and-mortar security – especially if a short-term loan is sought.

    APRA rejected CBA home loan data as inaccurate and incomplete (Financial Review), Rated: B

    Commonwealth Bank was being pressured by the prudential regulator to appoint external consultants and fix its flawed home lending data almost 2½ years before the Hayne royal commission began exposing the big four for sloppy administrative errors and irresponsible lending.

    The Australian Prudential Regulation Authority’s frustration with the failure of Australia’s biggest home lender to accurately identify what proportion of its loans were taken out by property investors and its level of exposure to big borrowers has been revealed in evidence tendered to the banking royal commission and published in a massive dump of more than 100 documents late last week.

    India

    Interest rates on unsecured instant loans are high (LiveMint), Rated: AAA

    Financial institutions and fintech companies have launched multiple small credit products in India in the past 1-3 years. It is now possible to get loans even on your mobile phone. But how do you pay for this convenience?

    P2P lending platform

    Peer-to-peer lending companies such as Faircent, i2ifunding and Lendbox connect lenders and borrowers on their platforms. Usually, the lender is an individual and not a financial institution. The interest rates are between 15% and 36% per annum and the loan amount can range from Rs50,000 to Rs5 lakh. The interest rate is decided based on the credit profile of the customer. Usually, the P2P lending companies take into account your Cibil credit score. The loan tenure is 3 months to 24 months.

    Fintech eco-system is moving to blockchain and AI: Rajat Gandhi, Faircent (Economic Times), Rated: A

    A lot of players have come into the fintech space. There are wallet players, then there are PPI, P2B, crowdsourcing and other payment players as well. So, regulation is one of the key challenges the private players are going through. What is your take on it?

    Surprisingly, the Indian regulators, I would say, are strict. You can see the example of NBFC P2P licences regulation. It is a good rule-based model. In fact, the players themselves were pushing for some kind of regulation because financial markets need them. It’s not like e-commerce or running a taxi where the risks are not that high.

    India’s Finzy Raises $ 1.3 Mln At Pre Series A Funding (Reuters), Rated: A

    Finzy, India’s fastest growing peer to peer lending platform, has raised USD 1.3 million in first round of Pre Series A from investors in the industry. A second round of fundraising is expected to close with pre-identified set of investors within the next 60 days.

    Latin American

    Brazilian Loan Marketplace FinanZero raises USD 3.6 million in Series A Funding Round (PR Newwire), Rated: AAA

    FinanZero is a leading marketplace for consumer loans in Brazil. The business is an independent broker for loans, negotiating the customer’s loan application with several banks and credit institutions, to find the loan with the best interest rate and terms for the consumer. FinanZero handles the lending process from start to finish.

    The Series A round was led by Swedish publicly listed investment company, Vostok Emerging Finance, with participation by other Swedish investors, including Webrock Ventures and Zentro Founders.

    Africa

    Fintech is central to Nigeria’s future success (Financial Times), Rated: A

    Central to this opportunity is an acceleration in the development of a modern banking and financial services sector. We are already seeing huge breakthroughs in digital banking and the adoption of fintech-based services by Nigerian consumers — be they retail or business customers. But this expansion must be encouraged by policies that will see greater inclusion of women and rural communities into mainstream banking activity.

    Asia

    Meet the most disruptive fintech startup in South Korea (Forbes), Rated: AAA

    Viva Republica is the most disruptive fintech startup in South Korea. Since the 2015 launch of its simple peer-to-peer payments app Toss, banks are finally revamping their user experiences and customers have easier access to financial products. South Korea’s mobile payments have more than quadrupled in that time to $4.6 billion, according to Bank of Korea data.

    The startup, funded at $76 million, hasn’t stopped there. After PayPal joined a $48 million investment in Toss in March, Toss has grown from a simple money-transfer app to a diverse consumer-finance platform generating Viva Republica’s $20 million in expected revenue in 2017. Toss thus joins Asia’s ranks of fast-growing mobile P2P payment services, reaching a $12 billion transaction volume in 2017.

    Authors:

    George Popescu
    Allen Taylor

    Legal Considerations When Using Big Data And Artificial Intelligence To Make Credit Decisions

    Legal Considerations When Using Big Data And Artificial Intelligence To Make Credit Decisions

    Companies across all sectors increasingly use big data as part of business decision-making. “Big data” has many definitions, but generally refers to “a collection of data from traditional and digital sources inside and outside [a] company that represents a source for ongoing discovery and analysis.”1 The credit and mortgage lending businesses are no exception to […]

    Legal Considerations When Using Big Data And Artificial Intelligence To Make Credit Decisions

    Companies across all sectors increasingly use big data as part of business decision-making. “Big data” has many definitions, but generally refers to “a collection of data from traditional and digital sources inside and outside [a] company that represents a source for ongoing discovery and analysis.”1 The credit and mortgage lending businesses are no exception to this growing trend. Companies use big data, algorithms, and artificial intelligence to make decisions about the extension of credit. While this emerging practice has the potential to accurately identify more people who are good credit risks and expand access to credit to traditionally under-served communities, companies should be aware of the legal risks that may arise under familiar laws such as the Fair Housing Act (FHA), Equal Credit Opportunity Act (ECOA), and the Fair Credit Reporting Act (FCRA).

    Like companies in other sectors, banks and fintech companies have access to an increasing amount of data about their consumers. For example, a company might know what websites its consumers visit, the people they are connected to on social media, the clothes they buy online, the college they went to, the bills they pay, the places they used to live, and more.2 A company might collect this information itself, or it may purchase it from a “data broker” that compiles information about consumers from across the internet.3 Lending companies can use this data to make decisions about who should get credit by developing and applying algorithms that analyze the various data points and drawing conclusions from them about a consumer’s credit risk.4

    For example, one company that has embraced the use of big data in evaluating consumers’ credit risk is Upstart. Upstart provides personal loans to consumers based on an assessment of their credit-worthiness that is based in part on “non-traditional sources of information such as education and employment history.”5 The company uses artificial intelligence and machine learning to make its determinations. Another company in this space is underwrite.ai. Underwrite.ai creates algorithms that use machine learning (i.e., artificial intelligence) that lenders can customize to help them make credit decisions.6 Its algorithms “analyze[] thousands of data points from credit bureau sources” in order to “accurately model credit risk for any consumer.”7

    These companies and others are using technology to change the way that lending decisions are made, and more companies will likely enter this space in the near future. Yet even as technology and decision-making methods change, companies that choose to use big data, algorithms, and artificial intelligence to make lending decisions should not forget that traditional fair lending risks remain. Specifically, lenders should be attentive to avoiding discriminatory impact in lending decisions and consider how to comply with the obligation to disclose why a consumer was denied credit.

    First, lenders must ensure that their lending decisions do not have a discriminatory impact in terms of race, gender, or other protected classes. The FHA prohibits discrimination in securing financing for housing on the basis of race, sex, and familial status, among other protected characteristics.8 ECOA plays a similar role context of credit transactions.9 The discrimination need not be intentional; a violation of these statutes occurs if there is a disparate impact on members of a protected class.10

    The use of big data raises particular concerns related to disparate impact. For example, the inputs—that is, the data itself—can lead to inadvertent disparate impact on protected classes. If, say, a lending decision is made in part by screening people in certain zip codes, the racial distribution of loans may be uneven since de facto residential segregation persists in the United States. The same could be true for decisions made based on connections on social media sites such as Facebook. While the data is not explicitly based on race, it may still have a racially disparate impact. Relatedly, the algorithms a lender uses may contribute to a disparate impact. The algorithm might rely on correlations between certain data points that end up affecting people of certain groups differently. And machine learning could exacerbate the problem. If a machine learns through patterns that credit risk is correlated to zip code, it could adjust the algorithm and sort consumers by race, even though the algorithm itself is racially neutral.

    To avoid making unintentional disparate lending decisions, companies should be vigilant about testing the impact of their algorithms and adjusting them as necessary. Moreover, companies should give close and careful thought to the business justifications for using a particular data set or algorithm.

    Second, lenders that use big data, algorithms, and artificial intelligence to make lending decisions should be attentive to the requirements of the Fair Credit Reporting Act. Specifically, the FCRA requires lenders to disclose to consumers if they deny credit based on a consumer report and to disclose to consumers if they charge more for credit based on a consumer report.11 This allows consumers to check for inaccuracies in the consumer report, the document that determines their access to credit.12 This is a fairly simple requirement to satisfy when a credit decision is based on a FICO score. But when a credit decision is based on a complicated algorithm drawing from a wide data set that incorporates a multitude of data points compiled by a third party, it is much more difficult to explain the credit decision to the consumer. Lenders ought to think carefully about choosing data sets and designing algorithms that can lead to clear explanations of lending decisions.

    Though this is still an emerging area, federal regulators have already demonstrated an interest in the fair lending implications of the use of big data. For example, in September 2017, the Consumer Financial Protection Bureau (CFPB) issued a No Action Letter to Upstart. In the letter, the CFPB indicated that it did not intend to take an enforcement or supervisory action against Upstart.13 But it clarified in an accompanying press release that it was paying attention to the emerging field of big-data-based lending. It noted that the CFPB had “launched an inquiry into the use of alternative data sources in order to evaluate creditworthiness and potentially expand access to credit for consumers with limited credit history.”14 Other government agencies have also begun thinking about the fair lending ramifications of big data, algorithms, and machine learning. For example, the Federal Trade Commission put out a report in January 2016 raising a number of issues that may become relevant in this space.15

    It is difficult to predict how the current administration will address these emerging issues.16 Yet companies continue to recognize the real risks that fair lending laws can pose to their business models. For example, underwrite.ai has specifically noted its intent to incorporate federal fair lending and credit laws into its algorithmic model: “Our system was designed to be fully compliant with all FCRA regulations from the ground up. Additionally, we specifically exclude from analysis any data that might proxy for a protected class. In our model, we don’t know or care about the gender, age, race, religion, zip code, sexual preference, or ethnicity of applicants. We strongly believe that these attributes are fundamentally NOT predictive of credit worthiness.”17 Other companies would be prudent to follow a similar path.

    This is particularly true because, even if federal enforcement of fair lending laws wanes, private plaintiffs may still take action. The FHA and ECOA both provide for private rights of action.18 Available remedies include punitive damages and equitable and declaratory relief, as well as attorneys’ fees. State attorneys general, too, may seek to enforce state statutes that protect fair lending. Many states have fair lending laws, and, in fact, many of those statutes are more expansive in terms of protected classes than the federal laws are.19 No matter the role the federal government takes in the near future, private plaintiffs and state attorneys general still have the power and opportunity to seek relief.


    1 Lisa Arthur, What Is Big Data?, Forbes.com (Aug. 15, 2013).
    2 See, e.g., Federal Trade Commission, Big Data: A Tool for Inclusion or Exclusion?: Understanding the Issues (January 2016), at 3-5, (“FTC Report”); Charles Lane, Will Using Artificial Intelligence To Make Loans Trade One Kind Of Bias For Another?, WBEZ (March 31, 2017); Executive Office of the President, Big Data: A Report on Algorithmic Systems, Opportunity, and Civil Rights (May 2016), at 11-12.
    3 FTC Report at 4.
    4 Id. at 4-5; Lane, Will Using Artificial Intelligence To Make Loans Trade One Kind Of Bias For Another?.
    5 Press Release, Consumer Financial Protection Bureau, CFPB Announces First No-Action Letter to Upstart Network (Sept. 14, 2017), (“Upstart Press Release”).
    6 /> 7 /> 8 42 U.S.C. § 3605.
    9 15 U.S.C. § 1691.
    10 Tex. Dep’t of Hous. & Cmty. Affairs v. The Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507 (2015).
    11 FCRA, 15 USC § 1681m(a), (h).
    12 FTC Report at 14.
    13 Letter from Christopher M. D’Angelo, Associate Director for Supervision, Enforcement & Fair Lending, Consumer Financial Protection Bureau, to Thomas P. Brown, Paul Hastings, LLP (September 14, 2017).
    14 Upstart Press Release.
    15 See generally FTC Report.
    16 Michael Mulvaney, the acting Director of the CFPB, recently decided to move the Fair Lending Office out of the Supervision, Enforcement, and Fair Lending Division and into the Office of the Director. Many consumer groups viewed this move as a signal that the CFPB will decrease fair lending enforcement. Kate Berry, CFPB’s Mulvaney Strips His Fair-Lending Office of Enforcement Powers, American Banker (Feb. 1, 2018).
    17 /> 18 42 U.S.C. § 3613; 15 U.S. Code § 1691e.

    Authors:

    Kali Bracey is a litigation partner in the firm’s Washington, DC office and a member of the firm’s Government Controversies and Public Policy Litigation Practice.  She brings 20 years of experience handling complex commercial litigation, investigations and regulatory matters.

     

     

     

    Marguerite L. Moeller is an associate in the firm’s Litigation Department.

    Wednesday March 2 2018 Daily News Digest

    Alibaba and Tencent investments

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

    Alibaba and Tencent investments

    News Comments

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    News Summary

    United States

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

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

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

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

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

    Read the full report here.

     

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Source: Student Loan Hero

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

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

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

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

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

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

    Additional product features include:

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

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

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

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

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

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

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

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

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

    The research paper covers:

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

    You can access the report at: 

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

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

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

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

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

    United Kingdom

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

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

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

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

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

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

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

    Refer-a-friend: current accounts

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     

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

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

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

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

     

     

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

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

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

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

     

    China

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

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

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

    The Apple enforced process is described as follows:

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

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

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

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

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

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

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

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

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

     

    International

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

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

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

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

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

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

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

    Australia

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

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

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

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

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

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

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

    Asia

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

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

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

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

     

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

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

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

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

    Africa

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

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

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

    Authors:

    George Popescu
    Allen Taylor

    Friday February 23 2018, Daily News Digest

    Marketing Lending Return

    News Comments Today’s main news: LendingClub increases interest rates. LendingTree plunges 8.13%. P2P default forecasts are on the rise. 29% of Australian consumers believe comprehensive credit reporting changes how they manage finances. Today’s main analysis: LendingTree’s Q4 and full year 2017 results. Today’s thought-provoking articles: Peter Renton shares personal quarterly marketplace lending results. 6 online personal loan lenders that […]

    Marketing Lending Return

    News Comments

    United States

    United Kingdom

    International

    Australia

    News Summary

    United States

    LendingClub Increases Interest Rates on Loans, Files 8K on Change (Crowdfund Insider), Rated: AAA

    Marketplace lending platform LendingClub (NYSE:LC) has filed an 8K with the Securities and Exchange Commission regarding interest rate changes.

    The rate changes came into affect on February 20th with notable changes including of 0.38% for loan grade E1, 0.39% for loan grades D2-D4, 0.40% for loan grade D5, and 0.47% for loan grade E5.

    LendingTree Inc. (TREE) Plunges 8.13% on February 22 (Equities), Rated: AAA

    LendingTree Inc. (TREE) had a rough trading day for Thursday February 22 as shares tumbled 8.13%, or a loss of $-30.2 per share, to close at $341.05. After opening the day at $343.05, shares of LendingTree Inc. traded as high as $358.80 and as low as $326.61. Volume was 688,145 shares over 9,300 trades, against an average daily volume of 221,877 shares and a total float of 11.97 million.

    LendingTree Reports 4Q & FY 2017 Results Above Guidance (PR Newswire), Rated: AAA

    Fourth Quarter 2017 Business Highlights

    • Revenue from mortgage products of $67.7 million represents an increase of 22% over fourth quarter 2016.
    • Revenue from non-mortgage products of $93.3 million in the fourth quarter represents an increase of 106% over the fourth quarter 2016 and comprised 58% of total revenue.
    • Credit card revenue of $36.9 million. On a proforma basis, giving effect to the CompareCards and MagnifyMoney acquisitions as if they had occurred on January 1, 2016, credit cards revenue grew 35% over fourth quarter 2016.
    • Personal loan revenue of $25.3 million represents accelerated growth of 74% over fourth quarter 2016.
    • Home equity revenue continued its strong momentum, increasing 138% over fourth quarter 2016, and marking the ninth consecutive quarter of year-over-year growth exceeding 100%.
    • More than 7.4 million consumers have now signed up for free credit scores and savings alerts through My LendingTree, and the revenue contribution from My LendingTree grew 109% in the fourth quarter compared to the prior year period.
    Source: LendingTree

    Fourth Quarter 2017 Financial Highlights

    • Consolidated revenue of $161.0 million represents an increase of $60.2 million, or 60%, over revenue in the fourth quarter 2016.
    • GAAP Net Loss from Continuing Operations of $6.5 million, or $0.54 per share, was impacted by a $9.1 millioncharge related to the revaluation of deferred tax assets as a result of U.S. tax law changes and a one-time $10 million commitment to establish a charitable foundation.
    • Variable Marketing Margin of $56.1 million represents an increase of $19.3 million, or 52%, over fourth quarter 2016.
    • Adjusted EBITDA of $29.6 million increased $10.7 million, or 57%, over fourth quarter 2016.
    • Adjusted Net Income per share of $0.84 represents an increase of $0.07, or 9%, over fourth quarter 2016.
    • On November 21, 2017, our wholly-owned subsidiary LendingTree, LLC entered into an amended and restated $250.0 million five-year senior secured revolving credit facility which matures on November 21, 2022. Borrowings under the revolving credit facility can be used to finance working capital needs, capital expenditures, and general corporate purposes, including permitted acquisitions. We do not currently have any borrowings outstanding under the revolving credit facility.
    • During fourth quarter 2017, the company repurchased 33 thousand shares of its stock at a weighted-average price per share of $331 for aggregate consideration of $11.0 million. In the first quarter 2018 to-date, the company has repurchased 30 thousand shares at a weighted-average price per share of $362 for aggregate consideration of $11.0 million.
    • On February 21, 2018, the Company’s Board of Directors approved an additional $100 million in share repurchase authorization. As of that date, $116.7 million in share repurchase authorization remained available.

    Full-Year 2017 Financial Highlights

    • Record consolidated revenue of $617.7 million, an increase of $233.3 million or 61%, over revenue in full-year 2016.
    • Net Income from Continuing Operations of $19.4 million, or $1.42 per diluted share.
    • Record Variable Marketing Margin of $207 million, an increase of $65.8 million or 47%, over full-year 2016.
    • Record Adjusted EBITDA of $115.1 million, an increase of $45.3 million or 65%, over full-year 2016.
    • Adjusted Net Income per share of $3.78 increased $0.80, or 27%, over full-year 2016.

    My Quarterly Marketplace Lending Results – Q4 2017 (Lend Academy), Rated: AAA

    The long decline in my returns has continued with 2017 by far my worst year since I began investing with LendingClub back in 2009. My overall TTM return  in Q4 2017 was 5.01% compared to 6.64% in Q3 2017 and 8.07% one year ago.

    Source: Lend Academy

    My main Prosper taxable account has had $50,000 of investments starting in 2010 and continuing until 2013. Since then I have just been reinvesting all earnings.

    Source: Lend Academy

    Lend Academy P2P Fund

    While 5.04% is down considerably from where the fund has been it is still significantly better than the 2.77% I received at my six original marketplace lending accounts.

    AlphaFlow

    What I like about AlphaFlow is that you can quickly build a diversified portfolio of 75-100 properties.

    Source: Lend Academy

    7 Personal Loan Companies That Help You Pay Off Debt Quickly (Student Loan Hero), Rated: AAA

    2. SoFi

    The main advantage of SoFi is the fact that it’s the only personal loan company on this list that allows you to borrow up to $100,000 for debt consolidation. Additionally, SoFi doesn’t have a minimum FICO requirement, which makes it the best way to consolidate debt with bad credit. The minimum annual income is on the high side to make up for it, however.

    3. Earnest

    Earnest has a minimum credit score requirement, but it also has a flexible underwriting program that can take into account special circumstances. There’s no income requirement, so Earnest loans can be useful for entrepreneurs.

    4. Payoff

    Payoff is a personal loan company that offers loans specifically aimed at consolidating or refinancing your credit card balances. However, the maximum loan amount is on the low end for our list. If you have a smaller amount of debt to consolidate, Payoff might work for you.

    5. Upstart

    • Minimum FICO score: 620
    • Minimum annual income: $12,000
    • Loan amounts: $1,000 to $50,000
    • Loan terms: three and five years
    • Interest rates: fixed
    • Credit check: soft pull for rate estimates
    • Fees: origination fee of 1% to 8%

    6. LendingClub

    • Minimum FICO score: 600
    • Minimum annual income: N/A
    • Loan amounts: $1,000 to $40,000
    • Loan terms: three and five years
    • Interest rates: fixed
    • Credit check: soft pull to get a rate estimate
    • Fees: origination fee of 1% to 6%

    7. Avant

    If you’re concerned about your credit score, Avant might be able to help. Avant is known for its accessible debt consolidation loans.

    Despite careful planning, TD Bank fumbles online banking upgrade (American Banker), Rated: A

    It’s been more than a week since TD Bank first revealed that its long-planned update to its online and mobile banking systems had run into technical difficulties, and many customer are still unable to access their accounts.

    A bank spokesman said Tuesday that while the company is making progress on fixing the glitch, he acknowledged that a number of its customers are still unable to use mobile or online platforms to check their accounts, transfer funds or pay bills.

    Scott Sanborn Joins LendIt Fintech USA 2018 As Commencement Keynote Speaker (PR Newswire), Rated: A

    LendIt Fintech, the world’s leading event in financial services innovation, announced today that Scott Sanborn, LendingClub (NYSE: LC) CEO, will open this year’s conference in San Francisco, the home of technology innovation, with a plea to refocus industry efforts on solving the financial problems of everyday Americans in an increasingly divided nation. From April 9-11, the world’s most prominent and emerging fintech CEOs will gather at Moscone Center to focus on the hot-button topics and issues exploring the future of finance.

    Here’s another way Amazon and banks are collaborating (American Banker), Rated: A

    SunTrust Banks, Ally Ventures — the strategic investment arm of Ally Financial — the Amazon Alexa Fund and others have raised $16 million in a new round of funding for Greenlight Financial Technology, which makes “smart” debit cards aimed at instilling sound financial habits in kids, teens and college students, the parties announced Wednesday.

    ORDER UNDER SECTION 8(f) OF THE INVESTMENT COMPANY ACT OF 1940 DECLARING APPLICANT HAS CEASED TO BE AN INVESTMENT COMPANY (SEC), Rated: A

    PROSPECT MARKETPLACE :
    LENDING CORPORATION :
    10 East 40th Street, 42d Floor :
    New York, New York 10016

    Above named applicant filed an application on January 4, 2018, and an amendment filed January11, 2018, requesting an order under section 8(f) of the Act declaring that it has ceased to be an investment company.

    The matter has been considered and it is found, on the basis of the information set forth in the
    application, as amended, that applicant has ceased to be an investment company.

    Research shows first-time home buying in Sacramento is tough (ABC10), Rated: A

    new study by LendingTree, a leading online loan marketplace, ranks the nation’s 100 largest cities to determine the best options for first-time homebuyers.

    The worst cities for first-time homebuyers:

    1. Denver
    2. New York City
    3. San Francisco
    4. Austin, Texas
    5. Las Vegas
    6. Los Angeles
    7. Oxnard, Calif.
    8. Boston
    9. Sacramento, Calif.
    10. Miami

    The best cities for first-time homebuyers:

    1. Little Rock, Ark.
    2. Birmingham, Ala.
    3. Grand Rapids, Mich.
    4. Youngstown, Ohio
    5. Winston, N.C.
    6. Dayton, Ohio
    7. Indianapolis
    8. Scranton, PA
    9. Pittsburgh
    10. Cincinnati

    KBSDirect.com Launches $ 1 Billion No-Load Real Estate Fund on CrowdStreet Marketplace (PR Newswire), Rated: A

    CrowdStreet, provider of the leading commercial real estate investment platform for investor acquisition and relationship management, today announced KBS, one of the largest and most respected commercial real estate companies in the United States, has launched a new $1 billion “no load” and no upfront commission growth and income properties fund on the CrowdStreet Marketplace. KBS is offering its new fund, the KBS Growth & Income Fund, through both the CrowdStreet Marketplace and its own direct-to-investor platform at KBSDirect.com, which is powered by CrowdStreet technology. KBS is taking this unique omnichannel marketing approach to provide access and engage a wider array of accredited investors seeking institutional-quality investment opportunities managed by leading professionals.

    ArborCrowd Offers Investors Equity in New Multifamily Real Estate Deal (PR Newswire), Rated: B

    ArborCrowd, an online commercial real estate crowdfunding company, announced the opportunity for investors to own equity interest in a multifamily property with tremendous upside potential. Tower on Ryan Park (the Property) is a 141-unit, high-rise property located in downtown Mobile, AL.

    The total capitalization of the deal is $12.7 million, and ArborCrowd is raising $2.6 million of equity. The Property has a targeted 16 percent to 18 percent Internal Rate of Return (IRR) and a projected hold period of three to five years.

    StraightUp launches platform for NYC real estate investing (Bankless Times), Rated: A

    With the launch of StraightUp, access to high-potential, curated New York residential development projects is available to investors – those who are neither the well-connected and super-rich elite, nor large institutional investors – for the first time. The platform gives investors a new level of access, transparency and opportunity in the unbeatable, but previously unreachable world of New York City development.

    NY Fed finds fintech mortgages quicker, less risky than bank loans (The Hill), Rated: A

    Mortgage lenders that exclusively use online applications approve loans quicker, experience fewer defaults, encourage more refinancing and respond to demand shifts better than brick-and-mortar rivals, according to a New York Federal Reserve report released Thursday.

    Fintech lending has grown annually by 30 percent from $34 billion to $161 billion, 8 percent of the market, in that time, it reported.

    Small Business Loans for Women (LendEDU), Rated: A

    Investment Opportunities for Women

    1. Golden Seeds

    If you’re looking for an angel investment firm that focuses on women, consider Golden Seeds, one of the largest and most active early-stage investment firms for women. They focus on B2B and B2C firms in tech, health care, consumer products, and service industries. They look for companies that have a scalable business model and at least one woman in the C-suite.

    2. Belle Capital

    This early-state angel investment fund focuses on companies in underserved markets. Belle Capital requires that you have at least one female founder in order to qualify and/or that you’re willing to recruit top female talent to your C-suite. They fund digital, mobile, internet, life sciences, medical devices, health IT, CleanTech, and other sectors.

    3. Female Founders Fund

    As an early-stage investment fund, Female Founders Fund aims to help companies founded by women. The companies must be based on innovative solutions that will better serve customers. The organization focuses on technology that connects buyers and sellers, e-commerce, web-enabled services, and disruptive communities.

    4. Women’s Venture Capital Fund II

    The Women’s VC Fund II looks to help boost women in business, making investments in early-stage, revenue-generating companies that have the potential for significant growth. It requires that companies are inclusive of women. It focuses on funding companies based on the West Coast that are working on enterprise SaaS, educational technology, and consumer internet solutions.

    5. Women’s Startup Lab

    If you’re looking for an accelerator to help you succeed, the Women’s Startup Lab can connect you to a group of mentors who are looking to help female-led businesses. The lab boasts a stellar track record with 90 alumnae and $50 million raised for their companies. In return for their assistance, they ask for 3 percent in equity to pay it forward.

    U.S. House Passes Bill Supporting Triple-Digit Predatory Lending (South Florida Caribbean News), Rated: A

    A bill passed the lower chamber that would render useless state laws in the majority of states, including the 15 states and the District of Columbia where state interest rate limits prevent payday lending. HR 3299, titled the Protecting Consumers’ Access to Credit Act, passed the House on a 245-171 floor vote.

    If passed in the Senate and signed into law by President Donald Trump, the measure will preempt state interest rate caps that now limit the annual percentage rates (APRs) on loans to no more than 36 percent. These respective rate caps now save consumers an estimated $2.2 billion in fees every year.

    Payday lenders strip $ 50 million per year from Colorado economy (Craig Press), Rated: B

    Payday lenders charge Coloradans an average of $119 in fees and interest to borrow $392, with an average annual percentage rate of 129 percent. This removes $50 million per year from the Colorado economy, according a new report released this week by the Center for Responsible Lending.

    Sykes Rejoins Chapman, Expands Renewable Energy, Securitization Practices (Monitor Daily), Rated: B

    David Sykes rejoined Chapman and Cutler earlier this month as a partner in the San Francisco office, adding to the firm’s renewable energy and securitization practices.

    Sykes represents lenders, lessors, issuers and investors in renewable energy and fintech transactions. He has experience in matters involving debt and equity finance transactions (including tax equity transactions), securitizations, joint ventures, asset acquisitions and divestments.

    New Castle Chamber to honor Boggs with community service award (Middletown Transcript), Rated: B

    Boggs regularly interacts with U.S. financial regulators on matters pertaining to global and mobile payments, marketplace lending, crowdfunding and cryptocurrency. He also represents technology and innovation companies in their public sector outreach relating to data privacy and cybersecurity, e-government, public policy and regulatory compliance.

    United Kingdom

    P2P default forecasts are rising, but should investors worry? (P2P Finance News), Rated: AAA

    Zopa figures show its expected default rate is now higher than at the start of the financial crisis in 2007, at 4.52 per cent for loans granted in 2017 against 2.74 a decade previously, but other platforms have similarly high forecasts.

    Lending Works predicted default rates of 3.4 per cent for loans made in 2017, which is more than double the rate when it first started lending in 2014, and up from 3.2 per cent in 2016.

    RateSetter (which originates consumer loans as well as business and property loans) indicated that its expected default rate is 3.18 per cent for 2018, the same as last year. This is down from 3.43 per cent in 2016 but its default rate was 1.4 per cent when it first started lending in 2011. It increased to 1.54 per cent in 2013 and 2.43 per cent in 2014 before hitting 3.02 per cent in 2015.

    Landbay boss makes case for IFISA (AltFi), Rated: A

    Buy-to-let mortgage lender Landbay first launched its ISA just in time for ISA season last year. Now, one year on, CEO John Goodall (pictured) has put forward five reasons for investing in the wrapper.

    Those reasons are: it’s tax-free, it offers high interest rates, it offers an alternative means of investing, it offers access to a variety of asset classes, and it’s a source of regular income.

    The balancing act in digital bank lending (AltFi), Rated: A

    It’s for this reason that more or less every adult in the UK is forced to bin three or four letters a month from their bank offering them a loan or overdraft. In this day and age, users of online banking are just as likely to find themselves having to hide a not-so-surreptitious offer of a pre-approved loan of £20,000, wedged in among the payments on their online statement.

    In the new world of digital banking, the want (/the need?) to lend is a source of great embarrassment. Credit is treated as a kind of dirty, best hushed up necessity. Nowhere is this more evident than in the launch of Tandem’s first major product: a credit card.

    That card – available in four vibrant colours – carries an APR of 18.9 per cent.

    And it’s not just Tandem. Monzo, Starling, Revolut, N26 – they’ve all launched or are thinking about launching a suite of loan options. Revolut partnered with peer-to-peer lender Lending Works to power its consumer credit offering. N26 has teamed up with auxmoney and Younited Credit. They’re all gearing up to lend money but they’re stuck in this weird position where they can’t speak plainly about wanting to lend.

    Assetz Capital to host intermediary events (Bridging&Commercial), Rated: B

    Assetz Capital has announced dates for its intermediary roadshow and smart lending intermediary event.

    The intermediary roadshow will be held at Cedar Court Hotel, Wakefield, on 21st March, while the smart lending intermediary event will take place at Murrayfield Stadium, Edinburgh, on 17th April.

    UK Consumer Credit 2017: Forecasts and Future Opportunities (PR Newswire), Rated: A

    Rate of growth in consumer credit gross advances, which picked up in 2015, has slowed and year-end figures for 2017 are expected to show growth of around 4.6%. Growth will remain moderate throughout the rest of the forecast period, meaning that gross advances are expected to total of around £329bn by 2021. On the supply side, high incidences of bad debt, tighter lending criteria, and a cautious approach towards unsecured lending among providers and regulators will check the rate of growth of credit supply over the forecast period.

    Critical success factors include in this report –
    – Retail finance specialists should identify which retail sectors offer the best opportunities for growth, whether due to rising levels of spending or lack of current finance options. Innovation from fintech companies will soon provide small retailers with new financing options, increasing competition in the market. Hence, they should tailor their propositions to meet the needs of customers.
    – Partnerships with established firms that have a longstanding reputation will help achieve the much needed scale for P2P platforms to compete.

    Moreover, these report offers insight into –
    – The key macroeconomic, regulatory, and other factors that will drive the demand for, and supply of, consumer credit over the next five years.
    – The outlook for total consumer credit including overdrafts, P2P, motor finance, payday lending, home credit, credit cards, and retail finance.

    Scope
    – Peer-to-peer (P2P) lending will see double-digit growth up to 2021. The sector will continue to enjoy rapid expansion due to increased consumer awareness and partnerships with other related sectors.
    – The motor finance boom has started to decline, with growth falling to a lower level of 3.4% in 2017. New car sales are falling, and the excess of vehicles that will enter the used car market over the next few years will drive down prices. Both trends will dampen demand for credit.
    – Payday lending has been severely curtailed by tougher regulation, including strict price caps and comprehensive affordability checks. These measures have significantly reduced the supply of credit and will depress gross lending.

    Banks not saying how they’ll support businesses hit by Brexit (The National), Rated: A

    Brexit and Scottish Business, from former MPs Michelle Thomson and Roger Mullin of consultancy firm Momentous Change, reveals the concerns of 236 of Scotland’s senior business figures about leaving the EU. The report comes against a backdrop of a collapse in bank net lending. In the final two quarters of 2017, net lending to SMEs across 30 UK banks – 75 per cent of the UK lending market – was dwarfed by that from peer-to-peer lender Funding Circle.

    International

     

    INVESTORS NEWLY OPTIMISTIC ABOUT HEDGE FUNDS (All About Alpha), Rated: AAA

    Deustche Bank recently released its Alternative Investment Survey, the 16th annual.  This year the questionnaires received replies from 436 global hedge fund investors, with assets under management of $2.1 trillion, who shared their insights, sentiments, and allocation plans.

    Over the year, the HF industry grew by 6.4%; assets under management reached the record figure $3.21 trillion at year’s end. In last year’s survey, investors’ predictions had fallen a bit short, holding that the year’s end figure would be $3.14 trillion.

    For the year to come, respondents are predicting further expansion, and a year’s end AUM of $3.42 trillion.

    Half of the respondents expect to increase their own allocation. Another 39% said they will maintain their allocation where it is, so that only 11% plan to reduce it. Last year, only 37% of survey respondents were saying they expected to enhance this sliced of their portfolio, 41% expected to hold to the status quo, and 22% planned to reduce.

    Addressing Demand (Medium), Rated: A

    While we’ve made industry-leading progress in issuing over $23m in blockchain-backed loans, there is still a demand of over $1.3b in loan requests that we are diligently working to address.

     

    Australia

    Brokers have ‘key role’ in communicating CCR changes (TheAdviser), Rated: AAA

    RateSetter surveyed 1,000 Australian consumers earlier this year and found that 29 per cent of people believe that the comprehensive credit reporting (CCR) changes will affect the way they approach and manage their finances by way of positive behavioural changes such as making payments on time and paying more than the minimum amount on their credit card.

    SMEs ‘over-reliant’ on banks, but gradually changing (MyBusiness), Rated: A

    The Organisation for Economic Co-operation and Development (OECD) released a new report which found that, although banks still dominate in funding small businesses, new bank lending is declining in a number of countries.

    The Scoreboard found a median year-on-year drop of 6.5 per cent in bankruptcies in 2016, following a drop of 6.9 per cent in 2014 and 9.1 per cent in 2015.

    The OECD report noted that SMEs accounted for 99.8 per cent of all enterprises in Australia, at just over 2.1 million in 2015/16.

    It found that SME loans accounted for around 30 per cent of all outstanding business loans in Australia in 2016 and added that the average interest rate charged to SMEs in Australia between 2013 and 2016 were between 5.1 to 6.5 per cent – nearer the higher end of rates when compared to other OECD countries.

     

     

    Brokers urged to help combat fear about CCR (AustralianBroker), Rated: A

    Peer-to-peer lender RateSetter called on brokers to help combat misunderstanding and fear about changes to credit reporting. It said yesterday that its research found that only one-third of people have any knowledge of the impending changes to how credit records are shared.

    The lender’s research shows that to achieve positive outcomes under comprehensive credit reporting, consumer awareness needs to be significantly improved, given that two-thirds of people (67%) are unaware of these changes.

    Crowdfunded neobank receives credit licence (MortgageBusiness), Rated: B

    Online lender Xinja is set to target mortgage borrowers in Australia’s capital cities after receiving its Australian credit licence.

    The neobank, which launched its equity crowdfunding offer in January 2018, has been granted an Australian credit licence (ACL) from the Australian Securities and Investments Commission (ASIC), which will allow it to use its digital portal to offer home loans to borrowers.

    Authors:

    George Popescu
    Allen Taylor

    Wednesday February 14 2018, Daily News Digest

    OnDeck gross revenue

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

    OnDeck gross revenue

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    Australia

    India

    Asia

    News Summary

    United States

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

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

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

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

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

    Source: Lend Academy

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

    Source: Lend Academy
    Source: Lend Academy

    Full Year 2018

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

    First Quarter 2018

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Affirm, San Francisco

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

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

    Better Mortgage

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

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

    Blend

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

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

    CommonBond

    Online lender refinances and finances undergraduate and graduate student loans.

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

    GreenSky

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

    Bona fides: Has facilitated over $10 billion in loans

    Kabbage

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

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

    LendingHome

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

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

    Tala

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

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

    Upstart, San Carlos, CA

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    China

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

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

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

    European Union

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

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

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

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

    International

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

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


     

    Australia

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

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

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

    India

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

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

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

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

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

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

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

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

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

    Asia

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

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

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

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

    Authors:

    George Popescu
    Allen Tayl

    Wednesday November 20 2017, Daily News Digest

    credible

    News Comments Today’s main news: SoFi offers 6-month grace period for SoFi ReFi. Zopa to build Open Banking infrastructure. Faircent secures $4M funding round. Assetz Capital launches IFISA. Ping An make big bet on technology. Ant Financial partners with Standard Chartered. Today’s main analysis: Student loan borrowers prefer payments over iPhone X or bitcoin. Who are LendingClub borrowers? (A must-read market […]

    credible

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    Australia/New Zealand

    India

    Canada

    News Summary

    United States

    Behind the Investment Platform: The LendingClub Borrower (LendingClub), Rated: AAA

    From 2007 through 2017, LendingClub has matched $31 billion investor dollars with 2 million borrowers’ loans.

    Source: LendingClub

    Today, outstanding credit card and personal loan balances in the U.S. are approximately $960 billion. Of that, two-thirds, or roughly $600 billion, represents interest-earning balances carried month-to-month —the overall addressable population. About half of the addressable population (more than $300 billion) currently meets LendingClub’s target credit profile—a market that we have only just begun to penetrate.

    Read LendingClub’s Marketplace Insights report in full here.

    Holiday Finance with Lending Club (ABC News), Rated: A

    LendingClub Appoints Former Netflix Chief Talent Officer Patty McCord As New Board of Directors Member (Crowdfund Insider), Rated: B

    Online credit marketplace LendingClub Corporation (NYSE: LC), announced on Tuesday it has appointed Patty McCord as the newest member of its Board of Directors, effective December 13, 2017.

    McCord spent 14 years creating the unique and high-performing culture at Netflix and as the video streaming giant’s Chief Talent Officer, she helped create the Netflix Culture deck and experimented and cultivated new ways to work.

    SoFi Now Offering Six-Month Grace Period for Graduates Using SoFi ReFi (Crowdfund Insider), Rated: AAA

    On Tuesday, online lending platform SoFi announced it is now offering a six-month grace period for graduates using its newly launched SoFi ReFi program.

    ABS investors could pull back from MPLs in 2018 as cycle set to turn (GlobalCapital), Rated: AAA

    Interest in marketplace loan ABS from the buyside picked up in 2017, but some investors are now saying that they could sit things out in 2018 as credit concerns grow and a lack of data presents problems in the late stages of the credit cycle.

    ABS volumes doubled from $3.4bn in 2016 to $7bn in 2017, with SoFi issuing more than $3bn in deals this year, according to data from JP Morgan. The introduction of multi-seller platforms from SoFi, Lending Club, Marlette Funding, Prosper Marketplace also drove liquidity for the sector, while new …

    Fiserv teams with TransUnion for loan origination system (Banking Technology), Rated: A

    Financial services company Fiserv and credit reporting agency and risk information provider TransUnion have joined forces, reports Julie Muhn at Finovate (Banking Technology‘s sister company).

    Under the agreement, Fiserv will integrate TransUnion’s CreditVision Link to increase precision of scoring and risk modeling in its Automotive Loan Origination System.

    Over 65% of students prefer student loan payments over iPhone X or Bitcoin for holidays (TechRepublic), Rated: AAA

    LendEDU asked 1,000 people repaying student loans if they would prefer a popular holiday gift or a loan payment of equal value. And, despite the hype surrounding tech trends, they wanted loan payments more.

    Source: LendEDU

    Voice assistants like Google Home and Amazon Echo won’t change banking in 2018 (Tearsheet), Rated: A

    Bankers agree voice will be the biggest and most important channel to their business after mobile, only this time, it won’t sneak up on them like mobile did. They’re looking at 2018 as a year to get their companies more involved with voice by adding features to their Alexa skills, creating an Alexa skill if they haven’t done so already or expanding Alexa capabilities to other parts of the organization. But for the most part, they’re looking for a clearer sense of how people even use Alexa.

    In 2017, USAA, Ally Bank and U.S. Bank launched Alexa skills. Before this year, Capital One was the only bank with the feature, which it launched in 2016.

    Upstart’s First SaaS Partner (LinkedIn), Rated: A

    Earlier this year, we announced an initiative to bring the industry’s first Software as a Service (SaaS) lending platform to market, which we call “Powered by Upstart”. Now we’re excited to announce that BankMobile is the first bank to launch their personal loan program on the Upstart platform. Beginning today, BankMobile offers consumers in 43 states personal loans from $5,000 to $30,000, with no origination fees and interest rates starting at 5.99%.

    Overcoming the Hurdles of Big Data Start-ups (Big Data), Rated: A

    We are an early investor in the company ‘Kabbage” and Kabbage to me is a major disruption in the fund-lending and risk-analysis market. Established in 2009, Kabbage supported the emerging companies that were suffering the blow of a financial crisis. Banks were declining to lend money to small businesses and entrepreneurs had no access to capital to support their businesses. What aggravated the problem is that even if they did get access to money, the procedure for evaluating the risks of money lending were strictly based on scrutinizing the company’s financial background and fico scores instead of probing into the business. Deviating from the established model of risk analysis, Kabbage stepped into the market at a time of financial distress and operated on a completely different strategy. They would evaluate your UPA shipping data, ebay seller reviews, and other bits of information that are generated on different platforms and then assess credit card risks based on these factors and not just credit card fico scores. Kabbage started off by accumulating a ton of third party data which they ingested, analyzed and then created a solution. Over time, the company has gathered a substantial amount of primary data that they can use to tweak and refine their risk-analysis model. The company efficiently leveraged big data to provide an entire new service in the risk-analysis industry.

    Anthemis Group’s Jillian Williams on tough times for personal finance apps (Tearsheet), Rated: A

    It’s a space that started out with Mint ten years ago, with a new way to look at all of one’s finances in one place. The field has now grown to accommodate an ever-expanding number of direct-to-consumer PFM apps, including apps like Digit, Clarity Money, Penny and Qapital, and banks are now folding PFM capabilities into their mobile apps.

    Banks have been folding in PFM features and competing apps are having trouble differentiating. Where do you see the PFM market right now?
    A lot of PFM will continue to move to a business-to-business, or business-to-business-to-consumer model. Things [business-to-consumer PFMs] struggle with are being able to monetize and with customer acquisition.

    What’s the problem with business-to-consumer PFM?
    The market is really crowded and it’s hard to provide that extra value to really distinguish themselves from other platforms in the space.

    Instant Loans at Checkout: helpful or hurtful? (MSN News Now), Rated: A

    An $800 mattress for your bed. A $600 sofa for your living room. A vintage designer bag as a Christmas gift for your best friend.  They’re all pretty big purchases to buy online, but now you can get an instant loan for any of them right at checkout.

    Ingle says the payment plans are different than credit card options. Companies like Affirm partner with certain retailers to offer the loans, which are installment loans with interest rates, and set payments are made over time.

    India

    Peer-to-peer lending platform Faircent gets $ 4m in Series B (Economic Times), Rated: AAA

    Peer-to-peer lending platform Faircent has raised $4 million in a Series-B round led by Belgian impact investment fund Incofin and Muthoot Fincorp.

    P2P platform Faircent raises Series B from Muthoot Fincorp, Incofin, others (Economic Times), Rated: A

    In a statement Faircent said it will utilise the newly acquired funds towards strengthening the platform’s technology and creating greater awareness about P2P lending’s significance as a new and highly rewarding asset class.

    Fintech Startups Seek to Shake Up Money Transfer Industry (WSJ), Rated: AAA

    The race is on to become the top global app for international money transfers.

    Fintech startups including WorldRemit Ltd., TransferWise Ltd. and Remitly Inc. are pulling ahead of the pack of the dozens of companies trying to disrupt the remittance industry, using the latest technology to send money internationally.

    More than $600 billion is remitted world-wide every year, mostly by migrant workers from places like India, Mexico and the Philippines, who have traditionally had to deal with long lines and high fees to send money home.

    Source: The Wall Street Journal

    Finvasia gets licence to operate as NBFC (The Tribune), Rated: A

    Chandigarh-based Finvasia, a fintech company offering zero brokerage, has received the Certificate of Registration (CoR) from RBI to operate as a non-banking financial corporation (NBFC). This extension will allow the company to offer loan-based products to retail and corporates alike. The company plans to develop block chain technology based P2P (peer-to-peer) lending platform.

    Canada

    Fintech Select Announces Launch of Physical Bitcoins (GlobeNewswire), Rated: A

    Fintech Select Ltd. (“Fintech Select” or the “Company”) (TSX-V:FTEC) is pleased to announce that it will be launching its physical Bitcoin product alongside its Selectcoin closed loop swipe card.

    Authors:

    George Popescu
    Allen Taylor