Monday August 7 2017, Daily News Digest

LendingClub

News Comments Today’s main news: SoFi Ventures to support financial services startups. Prosper’s valuation dives 70%. Fundrise drops minimum investment to $500 for New Starter Portfolio Offering. UK P2P lenders asked to reveal past defaults. Hargreaves Lansdown cancels special dividend. FinMason expands into Prague. PledgeMe close to profitability. Today’s main analysis: LendingClub is looking beleaguered. Australian fintech update. Today’s thought-provoking articles: Surge […]

LendingClub

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

Africa

Barbados

News Summary

United States

SoFi Ventures to support financial services startups (Pitchbook), Rated: AAA

SoFi, a provider of online lending and wealth management services, has launched a strategic VC arm led by 

Surge in FinTech Financings; PeerIQ Closes Series A (PeerIQ), Rated: AAA

This past week featured a slate of fintech venture financings. Kabbage (Series F: $250M), Dianrong (Series D: $220M), Bread (Series B: $126M), and Juvo (Series B: $40M) all announced major financings.

And last, but not least, , led by TransUnion, Hearst Financial Venture Fund, and Macquarie Group.

For PeerIQ, it means continuing to execute upon the vision we shared at our seed financing just over two years ago. This fall, we will be launching our first products uniting TransUnion’s dataset with the PeerIQ analytics platform.

Along with its investment, Hearst brings several major holding companies, including auto data provider, BlackBook, and Fitch Ratings, the global ratings provider, which opens up many new value propositions for our customers. Finally, we are working hand in hand with Macquarie, a major provider of capital to the fintech space, to improve tools for warehouse lenders and their borrowers alike.

Lending Club Is Looking Beleaguered Heading Into Q2’s Do-Or-Die Earnings (Seeking Alpha), Rated: AAA

Source: Thomson Reuters Eikon, image made by James Brumley

Fast forward to Monday. That’s when Lending Club is expected to log another progressive quarter, cranking revenue up to $136.2 million, and whittle the per-share loss back to only one cent; the company lost nine cents per share on $103.4 million in sales for the same quarter a year earlier. Not only is revenue expected to keep growing beyond that, Lending Club is expected to swing back to a profit in Q3, of two cents per share.

Fintech lender Prosper’s valuation dives 70% in latest funding round (Biz Journals), Rated: AAA

San Francisco fintech Prosper is about to close on $50 million in funding, in a round that slashes its value 70 percent to $550 million, The Information reports .

That a steep decrease from the $1.9 billion valuation the second-largest online lender saw just last year.

Fundrise Drops Minimum Investment to $ 500 in New Starter Portfolio Offering (Crowdfund Insider), Rated: AAA

The Fundrise Starter Portfolio starts with a $500 minimum and includes a 9.25% annual dividend yield and zero advisory fees through the end of the year. If you want to try it out the Starter Portfolio comes with a 90 day guarantee. If you have a change of heart, Fundrise will purchase your investment back at the original investment amount. Not a bad deal to test the waters.

Online Lender Prosper in Talks on Deal That Would Slash Its Value (WSJ), Rated: AAA

Prosper Marketplace Inc. is in talks to sell a roughly 10% stake to a Chinese conglomerate in a deal that could reduce the online lender’s valuation by more than two-thirds, according to people familiar with the matter.

Under the terms of the proposed transaction, Linca would invest $50 million in Prosper at a valuation of about $550 million. No deal has been finalized, however, and there was no guarantee the parties would come to an agreement, the people said.

David Kimball, who took over as Prosper’s CEO last December, has been focused on making the company profitable. In February, to ensure a funding source for the company’s loans, Mr. Kimball agreed to sell $5 billion worth of Prosper’s loans to a consortium of investors over the next two years along with warrants to purchase shares representing 35% of the company, The Wall Street Journal previously reported.

Small Change Completes First Real Estate Crowdfunding Offer Under Reg CF (Crowdfund Insider), Rated: A

Real estate investment crowdfunding site Small Change has closed its first real estate offering available to everyone – not just accredited investors.

Small Change reports that investors have funded projects via their platform in cities including Pittsburgh, Los Angeles, New Orleans, and Washington D.C. These projects are as diverse as the cities in which they’ve been built. They include Pittsburgh’s first tiny house, a historic main street mixed-use conversion, and affordable housing in Washington, D.C. with the largest residential solar install in the country.

Small Change has now completed its first offering open to all investors — a Starter Home Two project by architect Jonathan Tate.

WSFS Introduces Private Student Lending Solutions (WSFS), Rated: A

WSFS Financial Corporation (Nasdaq:WSFS), the parent company of WSFS Bank, today announced that it is now offering Private Student Lending Solutions, expanding its consumer lending product line to bridge the funding gap that exists between the actual cost of higher education and the federal aid, grants and scholarships available.

WSFS is partnering with LendKey.

SoFi to finally file for IPO? (Housingwire), Rated: A

Social Finance, better known as SoFi, first teased it would file for an initial public offering nearly three years ago.

SoFi CEO Mike Cagney appears to be interested in filing for an IPO again.

If SoFi did file for an IPO, it would mark the second major IPO for a housing-related company after a dry spell the last few years.

According to an article in Reuters by Lisa Lambert, “Last year IPOs in the United States fell by more than a third from 2015, and many of those 102 share offerings ended up trading below their debut price.”

Renters Insurance: PolicyGenius vs. Lemonade (Coverager), Rated: A

Yesterday, NYC-based digital broker PolicyGenius announced its expansion to renters insurance. The product is delivered in collaboration with Stillwater.

Another thing happened yesterday. Lemonade announced its renters and homeowner’s insurance is now available to folks in NJ, joining those residing in CA, IL and NY.

The result: Stillwater was 40% more expensive than Lemonade, all else equal.

Fluid Strikes Strategic Partnership with Nomad Credit (LendIt), Rated: B

Fintech and adtech startup Fluid announced a strategic partnership with Nomad Credit, a financial marketplace for international students in the US; the partnership looks to offer better credit options to this underserved market; together the companies will deliver better financial literacy, credit building tools and more cost effective financial products.

Here’s how start-ups get funded before they’re ready for venture capital (CNBC), Rated: B

Fledgling businesses rarely command seed or venture funding right out of the gate. But they still need cash to get started.

In reality, there’s a big difference between securing a loan for your business and winning over backers on a site like Kickstarter. Meanwhile, equity crowdfunding, enabled by sites like AngelList, CircleUp and SeedInvest, is generally for businesses that are further along.

Here are the real ways that most entrepreneurs get money at the very start.

  • Personal savings
  • Wages
  • Credit cards
  • Loans
  • Crowdfunding

Countering West Coast Pull, by Helping Finance Start-Ups Sell in New York (The New York Times), Rated: A

Nine of the 15 United States financial technology “unicorns” — companies worth $1 billion or more, as tracked by CB Insights — are in the San Francisco area. These Bay Area companies, which are not public, include the online payments processor Stripe, the online lender Social Finance and the finance website Credit Karma.

For the last seven years, a New York business-backed program — the FinTech Innovation Lab — has been working to stem that West Coast tide by helping financial services start-ups sell their services in New York in an industry where the city clearly dominates: big banks and other finance companies.

Make Delaware the financial technology capital (Delaware Online), Rated: A

One such “industry of the future” that Delaware should be working to attract is the financial technology sector, or what some affectionately call “FinTech. Empowered by mobile computing, these companies use technology to bring better, cheaper, more efficient financial services to citizens. Mobile apps that allow you to send money quickly to friends or family are examples of FinTech products.

For a number of reasons, Delaware is well-suited to become the nation’s FinTech capital. First, the financial services industry has served as a core portion of Delaware’s economy for over 40 years. Individuals with skills and expertise are ready and waiting.

Second, banks, of which many call Delaware home, are leading the way in partnering with startups large and small to develop new solutions and businesses in the space.

Third, Delaware’s nimble government and business community make it a flexible, attractive place for innovation.

Is an Online Business Loan Your Best Option? (Nav), Rated: B

There should be no surprise that with the growth of the internet and online banking that online lending would be close to follow. Over time, banks began to accept loan applications online and eventually began to offer full-service lending through the web.

While online loans may be tempting, it is important to consider every option when borrowing a large sum. Comparison shopping is your friend. There are more than 44 different kinds of business financing — that’s a large ocean to navigate before finding the lowest-cost option that fits your business profile and approval chances.

Nonbank lenders typically lend from their own funds or look to the financial markets to raise millions or billions of dollars to lend in smaller increments.

Here are some questions to ask yourself to get started:

  • How much money do you need to borrow?
  • Do you need an in-person experience or are you comfortable online?
  • What are the best interest rates available today?
  • What origination fees are you willing to pay?
United Kingdom

UK’s peer-to-peer lenders to be asked to reveal past defaults (Financial Times), Rated: AAA

The FCA is expected to announce new measures later this year, including forcing P2P groups to give extra information on the past performance of loans and on how much due diligence they have done on the borrowers’ past performance.

P2P lenders — which had collectively facilitated loans of £7.3bn in the UK by the end of last year, according to research from the Peer-to-Peer Finance Association (P2PFA) — have had plenty of time to prepare for tighter regulation.

The FCA’s latest review is the second in two years, and any measures are unlikely to come in before mid-2018, since the industry will be given between three and six months to respond to the proposals the authority puts forward later this year.

Hargreaves Lansdown Cancels Special Dividend After Regulator Warns on Capital (The New York Times), Rated: AAA

Fund supermarket Hargreaves Lansdown cancelled a planned special dividend on Friday after Britain’s financial regulator said the company needed to shore up its capital base, sending its shares lower.

The company plans to launch its HL Savings product later in the year, a cash deposit service supported by marketplace lending, and this year also launched Lifetime ISAs, or individual savings accounts eligible for a government bonus.

Distribution still keeping the wheels of credit turning (Computer Weekly), Rated: A

A recent survey revealed a third of SMEs in the IT sector have missed out on business opportunities because of a lack of finance. Distributors have long been a major source of credit for SME resellers but with consolidation taking place in distribution through mergers and acquisitions, the sources of credit available to resellers are being reduced.

One distributor that has publicly taken the initiative on credit is Exertis. The company recently introduced a programme called Credit Xtra with the intention of doubling the credit limit for more than 1,650 of its SMB accounts. There is also the option to increase the limit further if resellers remain within the distributor’s credit terms.

Dow believes that it is especially important to offer extra credit at this time of year, when resellers are targeting the peak summertime buying period in education.

LendInvest closes retail bond offer early (P2P Finance News), Rated: A

LENDINVEST has closed its bond offer early, due to strong demand from both retail and institutional investors.

The online mortgage lender launched the five-year notes on 19 July and the offer was scheduled to close at noon on Friday. However, it closed the offer at 11.30am on Thursday.

It said estimated net proceeds from the offer would be just under £49m and confirmed that the issue date will be 10 August.

Kantox raises £4.6 million from investors as it targets profitability (Business Insider), Rated: A

Foreign exchange fintech company Kantox has raised £4.6 million from its existing investors as it aims for profitability.

Filings with Companies House show Kantox raised the sum at the end of July.

Kantox, founded in 2011, made an operating loss of £258,538 on revenues of £2.3 million in 2015, the most recent year accounts are available for.

LendingCrowd offers cashback incentive (P2P Finance News), Rated: A

LENDINGCROWD has launched a £150 cashback offer to investors when adding £2,500 or more amid surging demand from borrowers for business loans.

The offer, which runs until 31 August, is available to new and existing investors and can be used in its Innovative Finance ISA (IFISA.)

Competition regulator confirms P2P business lenders exempt from APR rules (P2P Finance News), Rated: A

NEW pricing rules on business loans will not apply to peer-to-peer lenders, the Competition and Markets Authority (CMA) has confirmed.

From today, all providers of unsecured loans and overdrafts worth up to £25,000 to small- and medium-sized enterprises (SMEs), will have to publish and clearly display the annual percentage rates (APRs.)

It had previously been unclear if this would apply to P2P and alternative finance lenders but the CMA confirmed to Peer2Peer Finance News this morning that it would not.

Can P2P Lending Kill NBFCs? (TechBullion), Rated: A

NBFCs, on the other hand, are the Non-Banking Financial Companies.

Does P2P lending offer such a serious threatto NBFCs and can P2P lending kill NBFCs? We write an informative review to let you know!

While NBFCs mostly deal with the unbanked population, P2P concentrate on the businesses that are usually locked out by traditional lenders and also on the tech-savvy individuals.

While P2P platforms have embraced the use of modern technology, NBFCs have failed in the use of technology. This has really affected their growth as they cannot really compete efficiently in the modern world.

Should you go with the crowd? (MoneyWeek), Rated: B

The returns available to investors aren’t as high as they used to be, but they’re still much, much more than you’d get putting your money in a deposit account. But there’s a very good reason for that. It’s an awful lot riskier too. You’re not covered by the financial services compensation scheme – which safeguards up to £85,000 of your savings if your bank goes bust. That means you cold lose everything.

China

Hexindai Partners with China UnionPay to Launch a Mobile Payment Function to Its App (PR Newswire), Rated: AAA

Hexindai Inc. (“Hexindai” or “the Company”), a fast-growing consumer lending marketplace in China, today announced that it has partnered with China UnionPay to launch its “Quick Pass” app on Hexindai’s mobile platform. The app will allow investors on the Company’s platform to use surplus funds that have not been lent out to pay for goods and services provided by stores partnered with China UnionPay by scanning a QR code created by the app.

Huge Internet finance firms to be assessed (Shanghai Daily), Rated: A

CHINA will explore methods to include large Internet financial businesses of systemic importance in its macro prudential assessment, said a central bank report issued late Friday.

The first peer-to-peer lending platform opened in 2007, and exploded in popularity, with the number of such platforms increasing 18-fold between 2012 and 2015 and the combined transaction volume jumping about 40 times over the period, said the State Information Center.

Inclusive finance to lift fintech firms (China Daily), Rated: A

Financial technology or fintech companies, particularly those focused on credit analysis, will greatly reduce cost of lending and also reduce credit risks. So, they are likely to experience fast growth on market demand as commercial banks are joining the inclusive finance market.

That market is currently dominated by smaller, private financial institutions, such as peer-to-peer or P2P lending platforms and consumer finance platforms.

In China, only 30 percent of citizens are covered by existing credit reporting system, while in mature markets the percentage could be 70 percent or higher.

By the end of July, the five biggest banks in China-Industrial & Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of Communications and Bank of China-had launched inclusive finance arms, just two months after the authorities concerned called for better financial services for a wider group of people across China.

European Union

FinMason Announces International Expansion: Opens Operations in Prague (Crowdfund Insider), Rated: AAA

Boston-based fintech and investment analytics firm, FinMason, announced its international expansion plans and the opening of a new operations center based in Prague. The company stated the initial expansion will include the hiring of twenty software engineers to keep pace with the rapid growth and development needs of the company.

The company shared that FinMason Europe, s.r.o., opened August 1st and the first employees have already started.

Vendorly Adds Three New Companies to Vendor Oversight Platform (Markets Insider), Rated: AAA

Vendorly, an innovative vendor oversight platform for financial institutions, today announced the continued expansion of its platform through the addition of three new third-party oversight integrations available on the Vendorly™ platform. These additions further enable our customers to enhance their compliance management framework and help them maintain the high oversight standards required in today’s marketplace.

Continuing this momentum, the new vendor oversight additions to the Vendorly platform include:

  • Dun & Bradstreet (NYSE: DNB)— Vendorly customers now have access to Dun & Bradstreet data to help make smarter decisions about their current and prospective vendor network.
  • The ID Co. — With DirectID, Vendorly customers now have the ability to conduct bank verification for current and prospective vendors in their network, to reduce fraud and misrepresentation prior to payment.
  • TINCheck — Vendorly customers now have the ability to validate the tax ID of all organizations in their current and prospective vendor network.

iFunded Tackles Large Project With Bond Issue (Crowdfund Insider), Rated: A

A new entrant in German online real estate lending, iFunded wants to address the market of larger property development projects that lie beyond the scope of real estate crowdfunding. Partnering with umbrella investment bank NFS Netfonds Financial Service, the platform is launching its first €10 million real estate bond issue, to be listed on the open market of the Frankfurt Stock Exchange. With this, iFunded leads, for the real estate online funding segment, the Fintech startup trend that consists in moving from exemption/sandbox status to a fully regulated financial environment.

According to Crowdfunding.de, in the first half of 2017, German online real estate crowdlending platforms raised €58 million, 45% more than in the entire year of 2016.

In July 2017, iFunded launched its first public bond offering, what motivated you as a company to add the classical fundraising channel to your online real estate platform?

Real estate crowdfunding in Germany has grown very significantly recently and will reach between €100 and €120 million by the end of 2017. However, it still is small.

Our first project Eisenzahnstrasse Berlin is a €10 million bond issue (ISIN: DE000A2E4FQ5) with a 3.5-year maturity and 5.5% interest rate. It is destined to transform an exi property into 281 flats, including a penthouse, and 2,400 sqm commercial space. The total estimated budget is €49.6 million and the expected income €67 million.

Robo-adviser Moneyfarm expects profitability by 2019 (Citywire), Rated: A

European robo-adviser Moneyfarm expects to become profitable by 2019 as it looks to bring to market new products in the coming months.

The Italian firm filed its 2016 financial statements this morning, announcing expansion to 10,000 customers in the UK and £260 million in global assets under management (AUM), which renders it the second largest robo-adviser in Europe.

The firm has reported total losses of £6.4 million in 2016, but claims this was in line with its agreed targets.

Kildare businesses raise over €1m through Linked Finance (Leinster Leader), Rated: B

Linked Finance, Ireland’s leading peer-to-peer (P2P) lending company has raised over €1m for Kildare-based businesses.

36 Kildare businesses including well-known businesses Kelly’s Mountain Brew, Celbridge Playzone, and The Academy Barber, have used the Linked Finance platform to raise funds and facilitate business growth.

International

Analog Regulations Built for the Traditional Banking Space are not Conducive to Fostering Innovation in Financial Services (Crowdfund Insider), Rated: AAA

Mueller notes that Singapore and the UK were the early leaders in Fintech innovation as the respective governments determined it was of strategic importance. With government backing, Fintech flourished.

But there are many challenges for this transformation that is occurring at a breakneck speed. And as Mueller says;

“analog regulations built for the traditional banking space are not conducive to fostering innovation in a financial services industry turned digital.”

Mueller bullets out intrinsic challenges to the existing regulatory ecosystem:

  • Fear of failure has resulted in some regulators taking a go slow approach instead of being proactive. When things go wrong – who gets the blame?
  • Complexity in Fintech requires new skills. Regulatory agencies are typically populated with people entrenched in well defined processes. There is a lack of proper skills and staffing.
  • Internal culture may not be willing to adapt. Changing processes is always a challenge. A cohesive policy strategy is missing.
  • Fintech innovators may struggle to engage and communicate with a regulator. Fear of engagement harms us all

Yes, some countries are blazing trails in Fintech and the list of countries pursuing a Fintech Hub status is growing. Without acknowledging the elephant in the room that the US is not at the top of this list (even though it is the leading global financial center) is telling about the regulatory morass elected officials have allowed to persist.

Read the full report here.

FinTech and the world of investment banking (Brave New Coin), Rated: A

Global banks and investment banks are far more complex creatures than their high street counterparts, which is why we’ve seen far less disruption in corporate, commercial and wholesale banking that we are seeing in retail, but don’t be complacent or closed here. There are things happening in the more complex areas too.

While fintech covers a diverse array of companies, business models, and technologies, companies generally fall into several key verticals, including:

Lending tech: Lending companies on the list include primarily peer-to-peer lending platforms as well as underwriter and lending platforms using machine learning technologies and algorithms to assess creditworthiness.

Payments/billing tech: Payments and billing tech companies span from solutions to facilitate payments processing to payment card developers to subscription billing software tools.

Personal finance/wealth management: Tech companies that help individuals manage their personal bills, accounts and/or credit, as well as manage their personal assets and investments.

Money transfer/remittance: Money transfer companies include primarily peer-to-peer platforms to transfer money between individuals across countries.

Blockchain/bitcoin: Companies here span key software or technology firms in the distributed ledger space, ranging from bitcoin wallets to security providers to sidechains.

Institutional/capital markets tech: Companies either providing tools to financial institutions such as banks, hedge funds, mutual funds, or other institutional investors. These range from alternative trading systems to financial modelling and analysis software.

Equity crowdfunding: Platforms that allow a collection of individuals to provide monetary contributions for projects or companies provisioned in the form of equity.

Insurance tech: Companies creating new underwriting, claims, distribution and brokerage platforms, enhanced customer experience offerings, and software-as-a-service to help insurers deal with legacy IT issues

Source: Brave New Coin

Meantime, rather than ignoring these changes, the biggest banks are investing in them. Since 2012, the ten largest US banks by assets participated in 72 rounds of investment totalling $3.6 billion in 56 FinTech companies whilst, in Europe, Banco Santander leads with the most number of unique investments to FinTech startups. The firm has made 13 investments to 12 unique fintech startups. The largest investment was a $135 million in Q3 2015 to small business lender Kabbage, that also included participation from ING among other investors.

Alt-Lending Enjoys Sudden Investment Revival (PYMNTS), Rated: A

This week alone saw two examples of those concerns in action: One U.S. lawmaker, Rep. Emanuel Cleaver II (D-Mo.) sent a letter to five alternative small business lenders operating in the country, inquiring about their business practices.

This week also saw one alternative lender in the U.K., DueCourse, fall into administration.

All of this makes it even more surprising that alternative lending startups, by far, secured the greatest amount of investment this week – pushing half a billion dollars, in fact.

PYMNTS breaks down the major AltFin investment rounds, plus covers the other B2B FinTechs that were able to secure new funding.

Australia/New Zealand

PledgeMe closes in on profitability in 2017, weighs up new product development (NZ Herald), Rated: AAA

PledgeMe came within cooee of turning a profit in the 2017 financial year, boosting revenue from fees to use its equity crowdfunding and peer-to-peer lending platform while also clamping down on costs, and is considering adding another string to its bow which that could need another capital injection.

The Wellington-based company narrowed its annual loss to $11,228 in the 12 months ended March 31 from $398,611 a year earlier as revenue climbed 55 per cent to $268,473 and operating costs were slashed 48 per cent to $288,502.

Fintech Australia Shares 2017 Australian Fintech Update (Infographic) (Crowdfund Insider), Rated: AAA

On Saturday, Fintech Australia released a new infographic that revealed more details about the Australian fintech industry’s successes so far this year.

 

Non-bank loans gain momentum in tough lending regime (The Sydney Morning Herald), Rated: A

We have seen demand for construction loans between $10 million and $30 million spike 20 per cent per cent over the last six months as Tier 1 banks are quickly tightening both pre-sales thresholds and loan-to-valuation ratios on new developments.

One area of the greatest demand for non-bank finance is coming from Chinese property developers, who do not have the track record or Australian assets to provide comfort to the major lenders.

Peer-to-peer lending models, like that of Chifley Securities, allow us to access investor funds to progress these developments, as we are applying different, more nuanced assessment of the risks associated with these loans.

Will property crowdfunding take off in Australia? (Your Investment Property), Rated: A

A new study conducted by the University of South Australia (UniSA) in partnership with DomaCom, suggests that crowdfunding could become a viable new vehicle for investors trying to make headway into the country’s increasingly challenging property market.

Braam Lowies, the study’s lead researcher, noted that while the concept was relatively new in Australia, it had been successful in the United States and United Kingdom for approximately seven years.

India

Wadhawan Global takes second UK bet, invests Rs 175 crore (India Times), Rated: A

Wadhawan Global Capital (WGC), which owns 38% of Dewan Housing FinanceBSE 0.07 %, has invested Rs 175 crore in London-based mortgage financer Neyber, marking it’s second investment through the newly set up UK arm as it seeks to expand its global footprint.

Why PPF is like a safety jacket for investors of P2P lending (India Times), Rated: A

Those who do not back the idea of PPF believe investors should carry the risk of loss as the principal idea of P2P Lending is to offer investors an “alternative investment route”. The P2P Lending platform, at best, can try to strengthen the risk-assessment processes by making the optimal use of technological innovations.

While the other camp which is in favour of PPF opines that it is not a luxury but a necessity at the moment as it will only instill confidence among the investors. And, it’s not about disbelieving one’s capabilities.

Asia

Consultation by MAS on the provision of robo-advisory services in Singapore (Lexology), Rated: AAA

A summary of the proposals put forward by MAS in the Consultation Paper is set out below.

  1. Expansion of licensing exemptions

    (a) Expansion of licensing exemption for dealings in securities other than CIS

    (b) Expansion of licensing exemption for provision of fund management services incidental to advisory activities

  2. Dispensation with prior client approval for each and every rebalancing transaction
  3. Case-by-case exemption from collecting full information on the financial circumstances of clients
  4. Relaxation of criteria for CMS licences in fund management for digital advisers
  5. Development, monitoring and testing of client-facing tools
  6. Provision of information on algorithms and conflicts of interest
  7. Responsibility of the board and senior management

MAS Establishes Payments Council (LATTICE80 Email), Rated: A

The Monetary Authority of Singapore (MAS) announced on 2 August that it will establish a Payments Council, comprising 20 leaders from banks, payment service providers, businesses,and trade  associations. Members are appointed for a two-year term and chaired by Mr Ravi Menon, Managing Director, MAS. The Payment Council marks the vision of an e-payments society, fostering collaboration between providers and users of payment services in Singapore.

Green Packet an emerging fintech play (The Star), Rated: A

Communication and technology services company Green Packet Bhd is eyeing an expansion into a new growth area – the mobile payment solutions segment, an area poised for disruptions through technology.

According to the 2016 Visa Consumer Payment Attitudes survey, 74% of Malaysians prefer to make electronic payments instead of cash, an increase of 8% compared with 2015. In fact, Visa indicated in a separate study that seven in ten Malaysians are willing to use mobile wallets.

Hyperintelligent banking in the fickle era of social media (Inquirer.net), Rated: A

Such is the case of American banking giant Citi, which sees itself as a technology company with a banking license, having introduced video banking recently in India.

Video banking is seen suitable especially in wealth management, which is part of the regional consumer business led by Selva. This is a segment where customers need trust and constant advice.

Citi receives 70 million calls a year, almost half of which are answered by a phone agent. The bank usually spends about 30 to 45 seconds validating the call, asking the client his or her mother’s maiden name, date of birth and details about the last transaction.

In the Philippines, Citi now implements voice-enabled biometrics for easier client verification. Citi is likewise moving toward facial recognition.

Fintech Buys Stake in Exchange (finews), Rated: B

GSX, which owns and operates the Gibraltar Stock Exchange, said on Friday that Cyberhub Fintech Holdings Limited is a new strategic shareholder. Cyberhub is a unit of Broctagon, a derivatives trading technology provider.

The stock exchange also wants to become the world’s first to fully integrate blockchain technology.

Africa

The role of financial advisers in raising national savings levels (Biz Community), Rated: A

According to the 2017 Old Mutual Savings & Investment Monitor, working South Africans allocate only 15% of their incometowards savings.

Naidoo explained that these statistics emphasise the extent of the national savings deficit and the large gap that exists between targeted economic growth of 5.4% per year, as per the NDP, and the ability of the South African economy to fund that growth.

Naidoo believes that financial services providers and advisers have a vital responsibility to promote a savings culture via collaborative advice and financial literacy efforts.

Barbados

Carilend seeing ‘phenomenal’ growth (Loop News Barbados), Rated: AAA

Just three months in and Barbados’ sole peer-to-peer lending company, Carilend, is seeing tremendous success with 100 percent of its loans.

With over 900 registered users on the site to date, the team at Carilend has been amazed at the response they have received.

Carilend reported their “average” Borrower is borrowing $8,617 for 43 months at an average interest rate of 11.34%. Whilst all applications receive an answer in one working day, Carilend recently approved a brand new Borrower in 2 hours; 22 minutes from receipt of their initial application.

Authors:

George Popescu
Allen Taylor

Friday May 5 2017, Daily News Digest

Friday May 5 2017, Daily News Digest

News Comments Today’s main news: Lending Club’s Q1 2017 results: a little disappointing. SmartFinance to IPO in U.S. Prosper says system error overstated returns. Details on NAV’s raise of $38mil Series B. Next Insurance secures $29M during Series A. Metro Bank hits 1 million accounts. LendIt Europe to meet in London this year. Mexican fintech raises $4M in Series A. Today’s main […]

Friday May 5 2017, Daily News Digest

News Comments

United States

United Kingdom

  • Metro Bank hits one million accounts. GP:”This is a very large number of accounts. I am very impressed.”AT: “Great achievement. Congratulations.”
  • Sand. Meet Head. GP:”Certainly worth a read.”AT: “I love Anand’s sense of humor, but his insights are prescient, as well. I’m always amazed at the hubris of incumbents in any industry. Any time there is market disruption, the surest path to survival is humility, not boasting.”
  • LendIt Europe returns to London. GP:”I think there was no doubt it will be in London and stay in London. “
  • Robo-advisor to provide full retirement advice in two hours. GP:”I am not sure why it takes 2 hours to compute such a simple algortihmic solution. “AT: “This sounds like a joke, but I know it isn’t. I think most people will want the robot’s advice checked by a human until they are 100% comfortable with the technology.”
  • Octopus-backed Moola goes live.
  • What is fintech and why Google and Facebook will be the banks of the future. GP:”Google is already struggling to defent against monopole attacks and Facebook is avoiding carefully to be turned into a credit bureau. I doubt they will move in that direction. Also banks don’t have a good image with the public and aren’t that profitable so I see no reason for Google or Facebook to come even close to being banks.”AT: “The headline is misleading and somewhat overstated.”
  • Fintech: What will bring the most change? AT: “A poll indicates that blockchain may be the most disruptive fintech technology in fintech. I think it certainly has the potential to be, but we haven’t seen it yet.”
  • What does rising inflation mean for your money? AT: “A blog post at Funding Circle.”

China

European Union

India

Middle East

Central America

News Summary

United States

Lending Club Reports First Quarter 2017 Results (Crossroads Today), Rated: AAA

($ in millions)

March 31,
2017

December 31,
2016

March 31,
2016

Originations

$

1,958.7

$

1,987.3

$

2,750.0

Net Revenue

$

124.5

$

130.5

$

152.3

Net Income (Loss)

$

(29.8)

$

(32.3)

$

4.1

Adjusted EBITDA (1) (2)

$

0.2

$

(0.9)

$

26.3

Key accomplishments and developments in the first quarter across the Lending Club platform include:

Investors

  • Banks further increased their purchasing, funding 40% of total originations for the quarter, up from 31% in the fourth quarter, and retail investors expanded to 15%, up from 13% in the prior quarter
  • Developed a retail investor mobile application, now available in the App Store
  • Lending Club initiated activities to support the securitization of Lending Club loans with external partners

Borrowers

  • Achieved another nearly $2 billion originations, surpassing $26 billion in total loans since inception almost ten years ago
  • Continued the Company’s lead as the largest personal loan provider in the U.S. with a borrower base of almost 2 million individuals
  • Introduced an enhanced version of our Joint Application loan program, giving borrowers the ability to jointly apply for a personal loan

Adjusted EBITDA (3) Adjusted EBITDA was $0.2 million in the first quarter of 2017, improving $1.0 million from the fourth quarter of 2016, resulting from the decrease in revenue noted above, and a decrease of $10.3 million in other general and administrative expenses. The decrease in other general and administrative expenses was primarily driven by an insurance recovery of $9.6 million. Adjusted EBITDA also includes $10.6 million of expenses primarily associated with the Board Review that was disclosed in 2016.

Lending Club’s $ 30M quarterly loss is its smallest in the last year (American Banker), Rated: AAA

Lending Club, the online consumer lender whose fortunes were hurt by scandal last year, lost $29.8 million in the first quarter amid lower revenues and rising expenses.

BRIEF-Lending Club reports Q1 adjusted loss per share $ 0.02 (Reuters), Rated: AAA

  • LendingClub corp – qtrly originations $1,958.7 million versus $2,750.0 million
  • Q1 adjusted loss per share $0.02
  • Q1 loss per share $0.07
  • Q1 earnings per share view $-0.03 — Thomson Reuters I/B/E/S
  • Q1 revenue $124.5 million versus i/b/e/s view $122.8 million

Here is the Lending Club Q1 Earnings Deck (Crowdfund Insider), Rated: AAA

Below is the Lending Club Q1 earnings deck. The company is predicted Q2 growth of 6% to 10%. Full year sequential growth is expected to be 15% to 19%.

See the Lending Club Q1 2017 results in full here.

Lending Club slowly woos investors back after last year’s scandal (Financial Times), Rated: AAA

In the first quarter the San Francisco-based company originated $1.96bn of loans, it said on Thursday, down slightly from the $1.99bn of the fourth quarter. Banks bought 40 per cent of the loans, up from 31 per cent in the fourth quarter, indicating that many are now satisfied that the company has ironed out its problems.

But net revenues for the quarter were $125m, down 5 per cent from the fourth quarter. The quarterly net loss was $29.8m, slightly less than the previous period.

According to data from Orchard, a technology provider to the industry, total returns from an index of US consumer loans came to 3.95 per cent last year, down from 8.71 per cent in 2014.

Online Lender Prosper Says System Error Overstated Returns (Bloomberg), Rated: AAA

Prosper Marketplace Inc., one of the largest U.S. online-lending platforms, notified the majority of the investors that buy its loans that it had overstated their annual returns due to a system error, a spokeswoman said.

The error has been fixed, according to spokeswoman Sarah Cain. Some of the investors that were affected saw their annual returns fall in half, but in most cases returns fell less than 2 percentage points, Cain said. The issue has been going for “several quarters,” she said.

The glitch didn’t affect the cash that investors received, tax documents, expected future returns, or any other information the startup provided to loan buyers. In a small number of cases, returns were understated, Cain said.

Q1 2017 Shareholder Letter (Square), Rated: AAA

Our first-quarter results demonstrate our continued ability to grow the business at scale while balancing investment and margin expansion. Improvements in net loss and Adjusted EBITDA reflect strong top-line growth, coupled with ongoing operating leverage and improvements in transaction loss rates. Similar to previous quarters, we saw strong momentum across our products, with revenue growth driven by both transaction-based and subscription and services-based monetization.

We launched in the UK, our fourth international market, where small and medium businesses (SMBs) generated £1.8 trillion of revenue in 2016.

Square is a great fit for the UK market, which has 5.5 million SMBs2 and a thriving entrepreneurial scene. The annual revenue of SMBs in 2016 was £1.8 trillion, which is 47% of all private sector UK revenue. In the UK, the average adult now carries less than £25 in cash and 70% of shoppers prefer to pay by card, yet industry research estimates that half of UK small businesses still do not take card payments. Our contactless and chip reader aims to meet the needs of the UK market, where there are more than 100 million contactless cards.

See Square’s full Q1 2017 report.

FT Partners Advises NAV on Series B Financing (FT Partners), Rated: AAA

Read the full announcement here.

PeerStreet Hits New Milestone: $ 300 Million in Loans Funded (PeerStreet), Rated: A

Under a year ago, we announced PeerStreet had funded $75 Million, October we rounded $150 Million and now, thanks to the ongoing support from our investors and lenders, we’ve just surpassed $300 Million with zero losses to date.

The number of lenders PeerStreet works with has grown from 25 to 89. The loans we’ve recently made available for investment are more diverse than ever, with 11 new states added since this time last year, now totaling coverage across 28 states and Washington D.C. Currently, we are publishing triple the number of loans we did a year ago. To support this growth, our underwriting and portfolio management teams have doubled since last year.

Next Insurance Secures $ 29 Million During Series A Funding Round (Crowdfund Insider), Rated: A

Next Insurance, an insurtech company that specializes in small to medium businesses, announced on Wednesday it secured $29 million during its Series A funding round, which was led by Munich Re/HSB Ventures with participation from  Markel, Nationwide, and other existing investors.

The funding from the Series A funding round will go towards continuing to grow Next Insurance’s insurance products and expand the company’s offering to new business sectors. The announcement follows Next Insurance’s recent release of the first ever Facebook chatbot for small business insurance.

CAN ALTERNATIVE DATA SOLVE ONLINE LENDERS’ ‘ALGORACISM’ PROBLEM? (The Alternative Lending Report), Rated: A

A March 2017 letter written by Congressman Emanuel Cleaver, II (D-Mo.), to Consumer Financial Protection Bureau Director Richard Cordray raises fresh concerns about “algoracism” tainting the creditrisk-scoring models used by online lenders.

Cleaver’s letter highlighted five predatory practices cited by the HBS paper as pervasive in the “Wild West” of online lending and alleges that risk-scoring algorithms may be designed to discriminate against minorityowned, small business borrowers.

Minority-owned businesses comprise roughly 15% of the 28.8 million small businesses in the United States, according to a 2016 Small Business Administration report.

Biased algorithm design can occur if engineers code data correlation parameters with attributes that make inadvertently discriminatory assumptions, which could be violating the Equal Credit Opportunity Act. ECOA prohibits creditors from discriminating against borrowers on the basis of race, color, religion, national origin, sex, marital status, age or because they receive income from a public assistance program.

In fact, FastPay’s loan algorithm is over 80% weighted towards the credit risk of the brand counterparties, which typically average 90-days sales outstanding before they pay their creative and advertising technology vendors. Despite prolonged payment terms, Proctor & Gamble and other Fortune 500 brands pose extremely low credit-default risks to invoice financiers like FastPay.

Ultimately, Arora attributes flawed credit-risk modeling in fintech to the big banks that refuse to share data. But banks in the U.S., unlike in Singapore and the UK, where lenders are opensourcing their loan algorithms, see no incentive to make accountholder data available to third parties.

Regardless, Mills said Kabbage, which charges an annual percentage rate, ranging from 24% to 99%, is an interesting fintech small business lender because they factor variables like borrower credit card data and the company’s Facebook page into their risk scoring models.

Source: The Alternative Lending Report

See the full report at SmallBusinessLending.io.

How Lending Club Is Differentiating Itself From Other Online Lenders (Forbes), Rated: A

In less than a year, Sanborn cut and rehired 179 jobs and hired a new CFO, COO, general counsel and chief capital officer. In addition, the company launched a new auto refinance product and an investor mobile application, Lending Club Invest.

Sanborn: Nearly 75% of borrowers also say that their FICO score has increased by 19 points after consolidating debt or paying off credit cards, which can help put them on a better financial track.

Sanborn: Today we have more than 148,000 retail investors – more than any other online lender. Part of the evolution of our marketplace is growing and balancing the mix of investors – having the right mix of investors strengthens our marketplace and makes us more resilient, scalable, and better able to serve a wide range of borrowers of all credit profiles.

Sanborn: Our mission has been to transform the banking system to make credit more affordable and investing more rewarding. So, everything that we do comes from this goal and with the intention of delivering a great experience for everyone who comes to our marketplace. With 10 years of experience and incredibly powerful data and insight that informs us on our customers’ behaviors, choices and needs. We’re also able to calibrate this data into our models to price credit risk and better manage our marketplace and the success of both our borrowers and investors.

A traditional bank uses government-guaranteed deposits to lend to make a spread and can only give loans to a narrow spectrum of borrowers. Our credit marketplace attracts investors that span retail, asset managers, funds and banks, all with different risk appetites, to invest in loans across the credit spectrum so we can say yes to more borrowers. Our diverse investor base also means we’re not reliant on any one type of investor to fund our loans, so we have the agility to pivot funding channels to meet changing market conditions.

OCC fintech charter plans in jeopardy as Curry departs (Finextra), Rated: A

Proposals by the US Office of the Comptroller of the Currency to issue special purpose banking charters to fintech firms are up in the air following the departure of leading advocate Thomas Curry and his replacement as acting head of the Federal agency by Simpson Thacher & Bartlett partner Keith Noreika

Curry completed his five-year term as Comptroller last month but planned to stay on and push through his controversial fintech charter.
Noreika, a member of the Trump transition team, has extensive experience advising banks on regulatory issues, although his views on Curry’s fintech plans are not known.

Crowdfunding Real Estate Isn’t Just For Millionaires Anymore. (Yes Magazine), Rated: A

In up-and-coming neighborhoods, it’s not uncommon for developers to swoop in and alter historic buildings beyond recognition, or tear them down completely to make way for new projects. But when Eve Picker, president and founder of the real estate crowdfunding portal Small Change, came across a three-story property called the Buvinger Building in Pittsburgh’s Lawrenceville neighborhood, she saw a way to both preserve history and add much-needed housing units in a thriving area.

Luckily for Picker, the funding process is easier than it used to be. She posted a detailed project overview on Small Change’s website, which included information about the building’s history and aesthetics, the financial returns and risk factors, and a link to invest. Small Change met their investment goal of about $240,000 in just under three months, and construction on the project began in late Feb. 2017.

Though the internet paved the way for Title III crowdfunding, it solves a problem that existed long before the digital revolution. When securities regulations were put in place to protect non-wealthy investors after the stock market crash of 1929, one unintended consequence was that those very same investors were frozen out of a broader range of investment opportunities. It took years for the SEC to approve the Title III regulations in the JOBS Act, Roderick explains, because of the challenge inherent in striking a balance between protecting investors and making it easier for developers to raise money.

Small Change, however, is raising more than just capital. It’s a crowdfunding platform that backs real estate development projects only if they benefit underserved communities.

It also means that, in addition to financial returns, many Small Change investors are seeking investments that align with their values. It’s not something easy to quantify—and that’s where the Change Index comes in. The index is Small Change’s proprietary system for measuring a project’s viability in terms of transportation, the environment, and economic inclusiveness.

The Index also provides a metric for potential partners and investors to gauge their compatibility with a particular project.

Small Change plans to launch its first Reg CF offerings later this spring. It’s still one of only about 25 Title III electronic crowdfunding portals that the SEC has approved. While most Title III portals are focused on startup and small business financing, Small Change deals exclusively with real estate, which makes it even more of an outlier.

Major Credit Unions Will Unveil New Blockchain Tech Next Week (Coindesk), Rated: A

CULedger, a consortium project unveiled late last summer, is supported by more than 50 credit unions and four of the biggest credit union service organizations in the US. Spearheading the project are the Credit Union National Association and Mountain West Credit Union Association (MWCUA).

Those involved in the initiative say they want to utilize the tech in a bid to improve how credit unions function – while also making them more competitive in an increasingly tough environment for financial institutions. The idea is to create a blockchain-powered utility through which credit unions could send money or exchange other types of information.

FinTech and Digital Wallets are the Core of Financial Inclusion (Due), Rated: B

In a FDIC survey released in 2016, the Federal organization found the roughly 7% of American households are unbanked. That is 9 million households with no checking account or savings account. No direct deposit. No credit cards. These families utilize virtually no mainstream financial services. In some parts of the country, as much as 40% of the population is unbanked!

With no bank relationship, these individuals have little if any credit history and poor credit scores. There is a lack of trust and understanding of how banks and mainstream financial services work. This is a serious problem the entire financial industry needs to overcome.

Instead, less savory businesses are often chomping at the bit for this demographic’s financial business. Payday loans, title loans, and other expensive, low-quality financial products are all these people have had access to.

In many ways, digital wallets work like a bank account. You can store funds, make payments, and transfer to other financial accounts. In the case of Bluebird, you can even write checks!

Digital wallets look a lot like a regular checking account to outsiders, but there are some important technical differences between bank accounts and digital wallet accounts.

Financial technology startups are not encumbered by those sentiments. While the rules of the game are the same, startups can quickly adapt to new market trends, customer feedback, and more.

Unlike a giant bank where you have to navigate a series of annoying phone menus to reach a live human, startups are right on the pulse of what their customers are saying and doing. That is a major advantage.

United Kingdom

Challenger bank hits one million accounts (AltFi), Rated: AAA

Metro Bank surpasses one million customer accounts less than seven years removed from launch.

Metro Bank, which became the first new high street bank in the UK for over one hundred years in 2010, now has more than a million customer accounts. The milestone was reached, fittingly, on the bank holiday Monday, when the majority of incumbent banks are closed.

Some stats from the last seven years include: being open 75 per cent longer than the average bank, saving customers over 4 million days by printing over 1 million cards instantly in-store, and preventing over 20,000 cards from being cancelled unnecessarily.

Sand. Meet head. (CB Insights), Rated: AAA

Source: CB Insights
Source: CB Insights

It goes by many names.

Hubris.
Arrogance.
Cluelessness.

It’s also worth understanding that there is no upside to saying stuff like this.

Cuz more often than not, you’ll find yourself on the wrong side of history like so many of these CEOs.

And then we’ll make slides to immortalize your cluelessness.

Europe’s largest lending and fintech event, LendIt Europe, returns to London this autumn (LendIt Email), Rated: AAA

LendIt Europe 2017 launched last night with a cocktail reception for 75 of London’s fintech elite at the Dion in St. Paul’s. The 2017 event is set to be Europe’s largest lending and fintech event, with over 1,000 participants from the UK and Continental Europe as well as North America and Asia. Taking place at the Intercontinental O2 Hotel on October 9-10, this year’s conference is expanding with the industry to cover the hottest topics in fintech including blockchain, insurtech, digital banking, and much more.

Early confirmed keynote speakers are Jaidev Janardana, CEO of Zopa, Francesco Brenna, Partner at IBM Global Business Services, and Shane Williams, co-founder of UBS Smartwealth. With six tracks of content including Digital Banking, Credit & Underwriting, Policy & Regulation, The Cutting Edge in Fintech, Innovations in Lending, and Investor Insights, this year’s LendIt Europe agenda will be the most comprehensive yet, with more details being released on www.lendit.com/europe in the coming months.

A featured component to this year’s conference, and back for its second year running, is the PitchIt startup competition. PitchIt allows innovative fintech startups from across EMEA to present their solution in front of the LendIt audience of international investors and industry leaders. The PitchIt programme has been an exciting part of the LendIt series of events, with past winners and finalists going on to secure significant investment and publicity.

Robo-adviser to provide full retirement advice in 2 hours (FT Adviser), Rated: A

Robo-adviser Wealth Wizards has launched a new automated paraplanner tool to help firms provide retirement advice in less than two hours.

Wealth Wizards said the tool generates a “regulated advice solution” made up of an annuity, drawdown or a blend of the two.

The report could then be edited by an adviser to make sure it suited the client’s needs.

Octopus-backed robo advisor Moola goes live (AltFi), Rated: A

Investors have a new robo advisor to choose from following the soft launch of Moola.

The firm, which is backed by private equity specialist asset manager Octopus, announced back in December that it had received full regulatory approval from the Financial Conduct Authority (FCA) as well that it had arranged a tie-up with Blackrock-owned ETF provider iShares.

The passive only portfolios are risk targeted and cost just 0.75 per cent per year.

What is FinTech and why Google and Facebook could be the banks of the future (Manchester Evening News), Rated: A

In total, the sector generated almost £7bn revenue last year and now employs more than 60,000 people.

Not only that, but the big players are wising up to this need for disruption with Barclays opening a flagship FinTech accelerator in May, offering 500 workspaces for start-up innovators.

HSBC and Tradeshift have also confirmed that their new ‘procure-to-pay’ product will go live in summer allowing businesses to manage their entire supply chain and working capital requirements in one place, from any device.

The innovation specialist at SoftwareONE said: “Back in the 80s, when ATMs came into play, people thought it would be the end of bank branches and jobs, but instead it freed up clerks to perform other tasks, like mortgage advice, which actually added value to the customer.

“Moving on to the current day and bank branches have now become mobile phones – or apps – people can access their accounts and information at a touch of the screen.”

AccessPay, which moved from London to Manchester, is flying after a recent £2m funding boost.

Based in City Tower, the fast-growing firm is looking to recruit 60 new staff and expand into the US after securing funds from Clydesdale and Yorkshire Banks’ Growth Finance team.

The specialist in cloud-based payments and cash products has been driving innovation in the sector since it was founded in 2012.

Fintech: What Will Bring the Most Change? (City A.M.), Rated: A

Finance professionals have two basic questions about fintech and what it means for them:

  • How will fintech positively affect their careers?
  • How will fintech negatively affect their careers? For example, will peer-to-peer (P2P) lenders replace banks as the preferred platform or intermediary for borrowing and lending? If the answer is yes, then bank loan officers and credit risk analysts should start looking for alternative careers. The particular areas of fintech that evoke this sort of existential concern include blockchain, mobile payment, P2P lending, and robo-advisers.

 

The responses of our 333 poll participants suggest that interest in blockchain technology has risen to an all-time high, with four out of 10 readers opting for that choice. Another 22% are believers in robo-advisers.

Read between the lines: What does rising inflation mean for your money? (Funding Circle), Rated: B

Inflation is rising – and is set to climb even higher by the end of the year. Official figures revealed a surprise jump in the headline rate of inflation to 2.3% in March, its highest rate for four years. And it is estimated to climb to 2.8% by the end of the year.

But there’s one area where inflation is hitting hard right now – our savings. If you can’t get a savings return higher than inflation, you’re losing money. The cash in your nest egg will be worth less and less as inflation outstrips the returns you get. And right now, no-one can get an inflation-beating rate from traditional banks and building societies with even the much-heralded new Government-backed savings bond paying less than inflation at 2.2%.

China

Chinese online lender SmartFinance targets IPO in US (Deal Street Asia), Rated: AAA

SmartFinance, a Chinese internet loans business that judges borrowers on factors including how often they charge their phones, has consulted banks about a possible U.S. listing that could happen as soon as this year.

The rapidly expanding company, which anticipates it will reach a $1 billion valuation by the end of 2017, has hired former Cheetah Mobile Chief Financial Officer Andy Yeung to help better manage investor relations and smooth the path to an eventual listing.

Jiao, who is known to colleagues by his English name UBee, told Bloomberg the company’s next step is an initial public offering, probably in the U.S. By the end of 2017, he expects to have more than 2,000 staff and facilitate as many as 4 million loans a month.

SmartFinance is more commonly known as Yongqianbao, which translates as “need money pal,” and taps into as many as 1,200 data points collected by its smartphone app to assign credit ratings for would-be customers. Making calls that go unanswered or failing to frequently charge your phone are all potential signs of a problematic borrower.

China’s Ping An to launch first overseas fintech and healthcare fund of $ 1 bln (Reuters), Rated: A

Ping An Insurance Group Co of China Ltd, the country’s largest insurer by market value, is launching its first overseas fund to primarily invest in financial and healthcare technology worldwide, underscoring its push beyond its home market.

The initial size of the so-called Ping An Global Voyager Fund will be $1 billion, the insurer said in a statement on Thursday. It will be managed from Hong Kong and led by Jonathan Larsen, an 18-year stalwart of Citigroup who joined Ping An as its chief innovation officer.

P2P Industry News (Xing Ping She Email), Rated: A

IPO boom of P2P Lending platforms is coming!
China Rapid Finance (CRF) has gone public in the US and it is also the second P2P Lender listed successfully in America, which may bring an IPO boom of Internet finance industry.

It was revealed that Qudian, a P2P lender focusing on providing consumer finance products for young people, has already submitted their IPO prospectus to the SEC, expecting to finish IPO process by the second quarter of this year. Fintech companies such as PPDAI, Lego Group Inc. Are also actively preparing for US IPO. Several giants are among the long waiting list of IPO candidates, including Ant Financial, Lufax, Zhongan Insurance and Jingdong Finance etc. In fact, the assessment value of Ant Financial has already reached to $60 billion, and once the IPO could be successful, the director Jack Ma may become the China’s richest person again with holding at least 5% shares.

Ant Financial planning to buy MoneyGram with $3.5 billion Loan
Recently, an insider revealed that Ant Financial is going to sign a loan contract valued $3.5 billion for the acquisition of an American company MoneyGram International.

The loan application has attracted 14 providers, including ANZ, Barclays, Citi, Credit Suisse, DBS, Goldman Sachs, HSBC, ING, J.P. Morgan, Mizuho Bank and Morgan Stanley. With Deutsche Bank and Societe Generale participated as leading banks, and BNP Paribas SA is the sponsor. Ant Financial has got the Green Light for the acquisition by raising the biding price by 1/3 and surpassed its rivals.

European Union

Altisource Launches Enhanced Vendor Oversight Platform to the Market (Yahoo! Finance), Rated: AAA

Altisource Portfolio Solutions S.A. (“Altisource”) (ASPS), a leading provider of real estate, mortgage and technology services, today announced the expansion of the Vendorly™ platform, an innovative vendor oversight platform for financial institutions. The platform launched last year exclusively for members of the Lenders One® Cooperative, a national alliance of independent mortgage bankers, and is now available to the broader mortgage and community bankers market outside of the Lenders One network. The Vendorly platform is designed to help streamline vendor due diligence, document maintenance, monitoring and audits.

The scrutiny of vendor oversight practices continues to be a focus of regulators. It’s important for mortgage and community bankers to have a multifaceted vendor oversight program. Through the Vendorly platform, and its vendor oversight offerings, Vendorly can help strengthen its customers’ compliance management framework and increase their operational efficiencies. Vendorly offers managed vendor oversight services, including due diligence, document management, annual assessments, information security assessments, financial condition reviews and on-site audits.

Vendorly is announcing collaboration with Secure Insight, an innovator in the mortgage industry in providing settlement agent risk evaluation, rating, monitoring and database reporting on fully vetted mortgage closing professionals. Currently servicing close to 100 clients nationwide, Secure Insight will deliver real-time risk ratings and related settlement agent data to clients through the Vendorly platform. Together, Secure Insight and Vendorly intend to develop a platform that produces a transaction-based tool with risk data on each transaction prior to a closing (and just before the proceeds are wired). It is expected that this process will provide data in a more efficient, streamlined manner and give lenders greater comfort in the protection of their money, documents and consumer data at each closing.

India

i-lend plans to venture out with funds from 50K  (India Times), Rated: A

Peer-to-peer lending startup i-lend has raised an undisclosed amount in a pre-series A round from early-stage venture capital firm, 50K Ventures. It plans to spend the money on marketing, scaling up and expanding its core team.

The Hyderabad-based company recently started operations in Bengaluru and plans to expand to a few more cities in the coming months. It is also looking to raise Series-A funds later this year.

The company has disbursed more than 600 loans since its inception in Ventures is thinking 2013 and 50K Ventures is thinking about expanding i-lend to other verticals.

Why Nomura, Google, IBM and Amazon are Investing in Indian Fintech (Edgy Labs), Rated: A

In a press release, Nomura Holdings, Inc. unveiled its initiative, called the “Voyager-Nomura FinTech Partnership in India.” Through the Voyager Program, the company invites startups and entrepreneurs with innovative Fintech solutions for the financial industry, especially capital markets and investment banking.

To further consolidate the Voyager Program, Nomura Holdings has recruited the expertise of many authoritative partners, including Google, Amazon, IBM, PwC and Internet Services Pvt. Ltd.

Middle East

Responsible finance summit focus on Islamic fintech (Middle East Association), Rated: AAA

With the retail share of responsible investment doubling to 26 per cent in 2016, ethical, responsible and Islamic fintech can support further growth to deliver the financial products, experts said at a summit in Zurich, Switzerland.

The Responsible Finance & Investment (RFI) Summit opened yesterday (May 3) with leaders from across the responsible investment, impact investment and Islamic finance sectors gathering to discuss how to promote greater awareness of and engagement within responsible finance.

The first day’s sessions focused on ethical, responsible and Islamic fintech and the power they harness which can disrupt financial services and in doing so address the inequities in society and support equitable, inclusive and sustainable economic growth.

Central America

Sr. Pago raises 4 million dollars in its Series A investment round (Crossroads Today), Rated: AAA

Sr. Pago, the first 100% Mexican financial integrator for acceptance of credit and debit cards provided for the country’s non-banking population, through the placement of its Series A has successfully raised four million dollars in capital, thus ensuring the acceleration of its operations and underpinning its long-term vision.

This raising of capital is taking place thanks to the confidence of three recognized investment funds: IGNIA and EB Capital, with headquarters in Mexico City, and an international fund with its headquarters in Miami, FL, which through this capitalization have become strategic partners of Sr. Pago, supporting the business model of this Mexican Fintech company as the only one that has the country’s non-banking economically active population as its primary market and main consumer.

Authors:

George Popescu
Allen Taylor