- Today’s main news: Next step for SoFi – life insurance. Lending Club’s customer-email about quarterly update.
- Today’s main analysis : World’s first digital currency P2P lender opens in Germany.
- Today’s thought-provoking articles: 8 Asia-Pacific FinTech startups you want to meet. Singapore could become global FinTech leader.
- SoFi’s next step will be life insurance. AT: “This seems like a natural move for SoFi. The question that comes to mind now is, what next? Medical insurance? Business insurance? Auto insurance? It plays right into their current header slogan: “Welcome to a new kind of finance company.”
- Lending Club’s Patrick Dunne publishes quarterly update. AT: “I’m anxious to hear more about the exclusive partnership with United Airlines. With more of these types of rewards program partnerships, LC will continue to grow and achieve strong balance sheets.” GP: ” As I mentioned yesterday I really believe Lending Club has turned a page and is now back on track. We will see how Q4 goes but unless there is a surprise I expect it will continue on the path it was before falling 1 year behind.”
- Klarna partners with Wacom for deeper expansion in U.S.
- Will Trump stifle FinTech? AT: “The battle over net neutrality has become more heated in recent years. This is one man’s opinion, but I can see a scenario in which President Elect Donald Trump heads down the road toward less restrictions on ISPs, which could have some fallout for FinTech startups. On the other hand, he’s a man full of surprises. I’ll withhold judgment on this until I see what he does the first few days in office.”
- Well-known hedge fund investor gets into trouble with FinTech legal fight.
- Atlanta-based Groundfloor opens up in Houston.
- Bitbond becomes first P2P lender for digital currency. AT: “It was bound to happen. Could this fuel greater growth of Bitcoin with an increase in investment value for the currency itself? Only time will tell.” GP:” To me Bitcoin is just a remittance platform, that is cost effective and very useful.”
- PwC uses Auxmoney to gauge private lending market potential.
- Folk2Folk goes live on Microsoft Azure, Rackspace. GP: ” I would expect that all modern online businesses are running in a cloud. There is absolutely no reason for modern companies to have their own servers and IT people serving them unless they need to do high frequency trading.”
- KPMG launches digital ledger services in Singapore. AT: “It’s interesting that KPMG chose Singapore. Not only are they launching a digital ledger, but they’re partnering with Microsoft to work on blockchain initiatives. I can’t wait to see what happens with that partnership.”
- 8 FinTech Innovation Lab Asia-Pacific startups featured at Investor Day.
- Hong Kong is out, Singapore is in. AT: “I can’t disagree with this analysis. There are some exciting things happening in Singapore regarding FinTech.”
- Singapore has what it takes to be a global FinTech leader. AT: “Again, Singapore has the potential, but will it surpass China? It could be a while before that happens, though anything is possible.”
- Two Canadian startups partner on FinTech chatbot.
- Equifax Canada to fuel FinTech innovation with new partnership.
- 2nd Canadian FinTech awards dinner sells out. AT: “This is significant because it proves that Canada is in the game. It may never be a major FinTech hub–after all, it’s always in the shadow of the U.S.–but Canada could have some significant FinTech power over time.”
- United States
- Life insurance next step for SoFi, but industry headwinds lurk (Market Intelligence), Rated: AAA
- Quarterly update from Patrick Dunne, Lending Club CCO (Email), Rated: AAA
- Klarna Expands Further with U.S. Financing Solution (Payment Week), Rated: A
- How Trump could stifle fintech (Payments Source), Rated: A
- Julian Robertson Sucked Into Fintech-Investment Battle (The Wall Street Journal), Rated: A
- Atlanta real estate crowdfunding company eyes Houston expansion (Biz Journals), Rated: B
- European Union
- Bitbond is the World’s First P2P Lender Using Digital Currency (Crowdfund Insider), Rated: AAA
- PwC Studies German Risk Management, Utilizes Auxmoney to Determine Private Lending Market Potential (Crowdfund Insider), Rated: A
- United Kingdom
- Peer-to-peer business lender Folk2Folk goes live on Microsoft Azure (V3), Rated: A
- KPMG launches digital ledger services, expands partnership with Microsoft (Deal Street Asia), Rated: AAA
- Eight FinTech Innovation Lab Asia-Pacific Startups Featured at Investor Day in Cyberport (BusinessWire), Rated: A
- Hong Kong’s welcome mat to fintech start-ups looks worn (Financial Times), Rated: A
- Singapore has the chops to be global fintech leader (ie Singapore), Rated: A
- TWO CANADIAN STARTUPS TEAM UP TO BUILD LUCY, THE FINTECH CHATBOT (Betakit), Rated: AAA
- Equifax Canada Partners with MaRS Discovery District to Fuel Fintech Innovation (Yahoo! Finance), Rated: A
- 2nd Annual Canadian FinTech Awards Dinner Sells Out (Yahoo! Sports), Rated: B
- How FinTech is changing the face of E-Commerce (E-commerce Nation), Rated: A
- Overseas ‘fintech’ businesses that will shape the way you use money (Stuff), Rated: A
Life insurance next step for SoFi, but industry headwinds lurk (Market Intelligence), Rated: AAA
The latest expansion effort for the marketplace lender is life insurance. The company has sought license approvals in a number of states to offer policies on behalf of life insurance carriers.
Life insurance seems like an obvious addition to SoFi’s suite of products given that it is trying to tighten its grip on its already attractive customer base, according to industry observers. SoFi already chose to be completely removed from the banking system by lending on its own rather than partner with established institutions, but the insurance industry may not be an easy terrain to navigate for the digital lender.
The company recently got license approvals to sell life insurance products on behalf of carriers in California, Arkansas, South Dakota, New York, Massachusetts and Florida.
Quarterly update from Patrick Dunne, Lending Club CCO (Email), Rated: AAA
This quarter’s results, along with our new executive team, and the return of banks to our platform, give us confidence as we look toward 2017.
Here are a few highlights:
- Lending Club actively re-engaged with investors of all types to deliver on our plan for the quarter and enable $2 billion in loan originations. Lending Club’s borrower base increased to over 1.7 million individuals and we welcomed more retail investors to the platform. As of the end of the quarter, we have 142,000 active individual investors who collectively invested over $273 million for the quarter. Individual investors are—and will always be—the heart of the Lending Club marketplace.
- We continued to welcome banks back to the platform. We successfully re-engaged virtually all of our largest investors and saw a significant increase in the number of participating investors. We also secured a $1.3 billion platform purchase program with Credigy, a subsidiary of the National Bank of Canada, to increase funding visibility and stability.
- We launched our auto refinance program for borrowers in October, helping consumers rethink their auto loans just like the way we helped millions of consumers rethink their high interest credit cards. With more than $1 trillion in outstanding auto debt and just a fraction of that-$40 billion-refinanced annually, there’s a huge opportunity for both Lending Club and millions of Americans who could save by refinancing into a more affordable product. As with any new product offering, we’re working on building a track record first and we look forward to being able to offer to our investors when the time is right. Click here to learn more.
- We reported a strong balance sheet with over $800 million in cash, cash equivalents and securities available for sale, with no outstanding debt.
- Lending Club signed an exclusive partnership with United Airlines’ highly-developed customer loyalty program, offering MileagePlus members airline mile rewards for personal loans, auto loans, and retail investment dollars (you’ll hear more details on this later this week).
While we’ve made incredible progress, there is still work to be done. In the months ahead we are focused on continuing to increase the diversity and resiliency of investors on the platform, realigning our resources, and regaining our operating rhythm. We are continuing to focus on serving you better. We’re making investments in reporting, compliance and controls, technology, and the organizational foundation that will drive the next phase of growth. We genuinely appreciate your feedback and want to hear your ideas on what else we can do. Please reach out to our Investor Services team at any time with your comments and questions.
Thank you for investing with us.
Lending Club Chief Capital Officer
Klarna Expands Further with U.S. Financing Solution (Payment Week), Rated: A
How Trump could stifle fintech (Payments Source), Rated: A
Donald Trump’s stunning upset in the presidential race on Tuesday is likely to embolden his followers to push for changes to Internet law that could significantly alter how financial technology is conceived, built and delivered to market.
At issue is net neutrality, which refers to the treatment of the Internet as an impartial utility, which bars Internet service providers from setting up tiered lanes that favor access based on pricing or other factors.
Fintech firms fear that if anti-net neutrality sentiment grows in the U.S., it could lead to the kind of uncertainty already plaguing the U.K., where British fintech companies were hard hit following the Brexit vote. In addition to open source, much of the current innovation in payments is geared toward cross-border transactions, using blockchain and cloud technology to ease execution and erase artificial borders. The idea that there may be even a digital wall built around the U.S. could further chill the market.
GOP lawmakers already introduced a bill this year to end net neutrality, a bill Trump would likely sign into law if passed.
Julian Robertson Sucked Into Fintech-Investment Battle (The Wall Street Journal), Rated: A
Hedge-fund titan Julian Robertson last year passed on an investment in one of the most highly valued U.S. financial-technology companies. Why he did so is now the subject of a legal battle between the company, Mozido Inc., and a former board member.
Mozido alleged in a complaint filed in New York state court last week that the former director told Mr. Robertson the mobile-payments company was a “fraud” that would go out of business. This led Mr. Robertson, the complaint said, to walk away from a potential investment in Mozido, which is now trying to raise capital.
Atlanta real estate crowdfunding company eyes Houston expansion (Biz Journals), Rated: B
Atlanta-based real estate investment and financing platform Groundfloor is finding opportunity in Houston.
Bitbond is the World’s First P2P Lender Using Digital Currency (Crowdfund Insider), Rated: AAA
Founded by former banker and consultant Radoslav Albrecht, Bitbond became the first regulated Bitcoin P2P Lender in Germany receiving approval from BaFin – thus validating its operations. Albrecht has set the bar high for his company as he envisions Bitbond becoming a key player in the global small business lending sector – all without the help of a bank.
Radoslav Albrecht: In 2013 I started bootstrapping Bitbond – the world’s first global peer-to-peer lending platform for small business loans.
Radoslav Albrecht: Growth has been really encouraging and we’ve seen 65% month over month growth in October.
Because we use Bitcoin as a payment network, Bitbond operates internationally. In terms of growth, this gives us the opportunity to draw from a vast reservoir of borrowers and lenders located anywhere in the world.
Radoslav Albrecht: An excess of loans on the platform means some great borrowers don’t get funded. On the other hand, too many lenders on the platform causes loans to get funded instantly, and results in a lack of investment opportunities for new users. Both eventualities can cause disenchantment with the platform.
Working towards high rankings in Google has so far been the best way to attract new users. We do this by targeting relevant, high-intent keywords and creating high-quality content which search engine’s love. We find that searchers trust organic results more than paid ads, and the higher conversion and activation rates reflect this. The added benefit of this approach, is that it keeps our acquisition costs low.
Radoslav Albrecht: Yes, we specialise in global small business lending. This means that most borrowers run their own business and need financing to cover a short-term liquidity gap, make a bulk purchase, or hire new staff.
On the other hand, we specialise in online sellers because they typically offer a wealth of information not provided by retail borrowers. This helps us to accurately assess their creditworthiness, and ensures that only reputable borrowers get funded on the platform. To illustrate this point, let’s take a typical online seller from the US.
Radoslav Albrecht: We are proud to have users from over 120 countries. The bulk of our current user base is located in the US, Germany, India or the Philippines, but we are seeing meaningful traction in Brazil, Spain, the United Kingdom and Canada as well.
PwC Studies German Risk Management, Utilizes Auxmoney to Determine Private Lending Market Potential (Crowdfund Insider), Rated: A
Credit marketplaces such as auxmoney ensure that up to 4.3 million more people get access to credit, as would be the case via conventional lenders like banks, according to a recent PricewaterhouseCoopers study. PwC investigated the effects of new forms of risk assessment with its complementary, digital data analysis on the supply of credit in Germany, according to a release. On the basis of the auxmoney scoring process, which has been continuously developed over nine years, the editors calculated the potential of the private lending market and derived the implications for credit access in Germany.
Peer-to-peer business lending company Folk2Folk, founded in 2013, has gone live on the Microsoft Azure cloud, but using Rackspace to architect and optimise its cloud-based applications.
Implementing the same system in-house would have cost the company an estimated £250,000 and required a larger IT team for the implementation and the support, claimed Straw.
Implementing the same system in-house would have cost the company an estimated £250,000 and required a larger IT team for the implementation and the support, claimed Straw.
KPMG launches digital ledger services, expands partnership with Microsoft (Deal Street Asia), Rated: AAA
KPMG in Singapore has announced the introduction of its Digital Ledger Services.
As a service offered through the KPMG Digital Village, KPMG’s Digital Ledger Services include full lifecycle support – from ideation, market needs validation, business case development and the building of prototypes – to systems and operations integration, and ongoing management of a company’s blockchain infrastructure.
The lifecycle support will involve management consulting and risk consulting proficiency in financial processes with regulatory requirements in mind. KPMG’s specialised in-house coding and development will also be part of the services offered to clients.
In addition, KPMG will expand its strategic alliance with Microsoft to work on blockchain initiatives – with Microsoft providing blockchain as a service platform and KPMG providing its comprehensive suite of services – which will help clients efficiently and securely move to the cloud for storage.
Eight FinTech Innovation Lab Asia-Pacific Startups Featured at Investor Day in Cyberport (BusinessWire), Rated: A
A select group of leading-edge financial services technology (fintech) companies demonstrated their products and services to dozens of top bank, venture capital and technology executives today at the third annual FinTech Innovation Lab Asia-Pacific Investor Day.
In the first three quarters of 2016, fintech investments in Asia-Pacific reached nearly $10.5 billion, the bulk of it driven by investments involving Greater China companies. This is more than Europe, which attracted $2 billion in investments, and more than the US, which attracted $6 billion in investments in the same period.
The eight companies in this year’s lab were selected by senior technology executives from participating financial institutions and have spent the past 12 weeks receiving intensive mentoring, product and business-development advice, and exposure to senior financial industry, technology and venture capital executives.
- ChartIQ – provides securities-specific financial chart and data visualization products in HTML5.
- HedgeSPA – is a predictive investment analytics platform that enables investment professionals to tap the internet to improve their performance.
- KYC-Chain – uses biometrics, emerging technologies and distributed ledger (blockchain) tech to streamline onboarding processes and provide consensus on identity.
- Lattice – has developed portfolio support software for investors, portfolio managers, risk managers and traders.
- Privé Managers – is a completely integrated and comprehensive wealth and asset management platform powered by a proprietary bionic advisory engine.
- Seerene – provides insights, actionable analytics and transparency to improve efficiency and streamline costs.
- SIORK – helps financial institutions evaluate customer data and detect criminal activities such as fraud and money laundering in both developed and emerging markets.
- TNG Wallet – offers an e-wallet for payment to merchants, person-to-person fund transfer, global bill payments, SIM card top-ups, foreign exchange transactions, and year-round cash withdrawal.
Hong Kong’s welcome mat to fintech start-ups looks worn (Financial Times), Rated: A
To the wider Hong Kong community, these frosty exchanges between corporates and regulators are signs that the Hong Kong government is unimaginative and unsupportive when it comes to encouraging innovation in finance — an area in which the city has had a competitive edge. Some warn that rival cities, such as Singapore and Shenzhen, are now doing far more.
Hong Kong has nurtured start-ups in the past but has then seen the founders move elsewhere — often to Shenzhen, across the border in China, where human capital and physical space is more abundant and affordable.
Similarly, a list of fintech start-ups in Singapore compiled by CLSA using data from website Tech in Asia includes almost 180 firms. By contrast, a comparable list for Hong Kong would have fewer than half that number. Singapore’s local regulator appears “to be highly supportive of fintech and has a clear view of when and under what conditions it will regulate the industry”, says Jonathan Galligan, CLSA’s head of Singapore research.
Singapore has the chops to be global fintech leader (ie Singapore), Rated: A
WITH the government’s big push to develop the fintech sector, Singapore has recently been making headlines as one of the leading fintech hubs in Asia and in the world.
The many initiatives launched by the Monetary of Singapore (MAS) this year – the regulatory sandbox, the Looking Glass innovation lab and the inaugural FinTech Festival – clearly signal Singapore’s ambitions to become a leader and global powerhouse in this space. While the race is by no means over yet, it would appear that we are on track to achieving the top spot. In a recent report on global fintech hubs by Deloitte, Singapore was recognised as “a leading international financial centre and a serious contender for the global number one spot in fintech.”
The World Bank ranked Singapore second, only after New Zealand, for ease of doing business in their recent report. Singapore is also Asia’s leading financial centre, according to the latest Global Financial Centres Index rankings released earlier this year. One of the factors that led to London’s eminent position in fintech was its standing as an international financial hub – Singapore is similarly well endowed with a developed financial infrastructure.
TWO CANADIAN STARTUPS TEAM UP TO BUILD LUCY, THE FINTECH CHATBOT (Betakit), Rated: AAA
Lucy is now also the name of a new AI chatbot created by Thinking Capital, a Montreal FinTech company with a mission to help SMEs access loans quickly and easily. The company says Lucy is the first of its kind in North America.
Lucy was developed in conjunction with Vancouver’s finn.ai, which builds a white-label virtual banking assistant augmented by AI.
Thinking Capital is also working to integrate Lucy into SMS on their web platform so that customers can easily switch from Facebook Messenger to SMS. The focus on mobile is important as 52 percent Thinking Capital’s customers currently apply for loans through mobile devices.
Equifax Canada Partners with MaRS Discovery District to Fuel Fintech Innovation (Yahoo! Finance), Rated: A
Fintech startups have a new ally as they work to bring new, innovative solutions to market with Equifax Canada’s (EFX) announcement of their partnership with MaRS Discovery District, a Toronto-based innovation hub.
As a corporate partner for MaRS’ Financial Technology (FinTech) Cluster, Equifax increases its participation in Canada’s fast-growing ecosystem while acting as a mentor for fintech startups in the industry.
2nd Annual Canadian FinTech Awards Dinner Sells Out (Yahoo! Sports), Rated: B
The 2nd Annual Canadian FinTech Awards Gala Dinner in Toronto on November 21, 2016 , has sold out with a record 150 nominations for a range of awards including Bank Innovator of the Year, FinTech of the Year, Investor of the Year, and Global Impact.
How FinTech is changing the face of E-Commerce (E-commerce Nation), Rated: A
“The e-commerce landscape in Africa is evolving so fast that it’s almost impossible to keep up. I have found the e-commerce Africa conference and exhibition to be one of the best ways to be informed and meet those who are making major disruptive and innovative changes in all aspects of e-commerce including a special new focus on fintech,” says Advisory Panel Member & Guest Speaker; Chris Folayan, CEO for MallForAfrica.
Overseas ‘fintech’ businesses that will shape the way you use money (Stuff), Rated: A
Some insurers overseas expected to lose 20 per cent of their business to start-up “insuretechs” in the next five years, delegates at the Insurance Council’s annual conference in were told.
Trov.com started in Australia. Its tagline is “Protect just the things you want – exactly when you want – entirely from your phone”.
Blooom.com is a roboadviser helping Americans invest their 401K, which is their equivalent of KiwiSaver.
Friendsurance.com from Germany helps people create their own peer-to-peer insurance pools in which the individuals come together to insure each other’s stuff, though there’s an insurer at the end of the line for really, really big claims.
Everledger uses blockchain to create a permanent verification ledger for diamonds. It’s going to be used for other things like cars. Insurers like the idea of verifying that the people who make claims actually own the stuff they claim they own.
Traity.com is US start-up which lets people build up an alternative to traditional credit scores, which can understate the creditworthiness of individuals like students and the self-employed.