Wednesday March 2 2018 Daily News Digest

Alibaba and Tencent investments

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

Alibaba and Tencent investments

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China

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Asia

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News Summary

United States

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

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

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

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

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

Read the full report here.

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Student Loan Hero

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

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

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

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

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

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

Additional product features include:

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

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

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

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

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

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

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

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

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

The research paper covers:

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

You can access the report at: 

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

Refer-a-friend: current accounts

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

 

 

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

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

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

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

 

China

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

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

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

The Apple enforced process is described as follows:

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

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

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

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

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

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

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

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

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

 

International

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

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

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

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

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

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

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

Australia

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

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

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

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

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

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

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

Asia

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

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

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

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

 

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

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

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

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

Africa

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

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

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

Authors:

George Popescu
Allen Taylor

Monday March 26 2018, Daily News Digest

Monday March 26 2018, Daily News Digest

News Comments Today’s main news: Prosper broadens its capital stack. MarketInvoice nabs 135M GBP from two European banks. Klarna hit by fraudsters. Square intros instant deposits in the UK. Hong Kong-China commuters now have a dual-currency prepaid credit card. Today’s main analysis: PeerIQ’s lending earnings insights. How 6 digital banking startups are challenging the retail banks (A MUST-READ). Today’s thought-provoking […]

Monday March 26 2018, Daily News Digest

News Comments

United States

United Kingdom

China

European Union

International

India

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News Summary

United States

Prosper brings deeper capital stack with latest ABS (Global Capital), Rated: AAA

This year, Prosper broadened its capital stack for the first time, including a ‘D’ class of bonds on its $647.5m offering, which was priced on Wednesday. Credit Suisse and Jefferies led the deal, with the $387.8m ‘A’ notes pricing at 70bp over euro dollar spot forwards. The $112m ‘B’ notes were priced at 125bp over EDSF, while the $79.45m ‘C’ notes were priced at 220bp over interpolated swaps. The $68.25m ‘D’ notes were priced at 300bp over IS.

In contrast to last year, Prosper also strenghtened the collateral mix on its 2018 offering. According to a presale from Kroll Bond Rating Agency, loans from Prosper’s higher quality credit tiers made up 54% of the deal, compared to 38% on its November 2017 transaction. The proportion of lower quality credit tiers also fell to 46% in this deal, compared to 62% on its last deal.

Do Fintech Lenders Penetrate Areas That Are Underserved by Traditional Banks? (Federal Reserve Bank of Philadelphia), Rated: AAA

Fintech has been playing an increasing role in shaping financial and banking landscapes. In this paper, we use account-level data from LendingClub and Y-14M data reported by U.S. banks with assets over $50 billion to examine whether the fintech lending platform could expand credit access to consumers. We find that LendingClub’s consumer lending activities have penetrated areas that may be underserved by traditional banks, such as in highly concentrated markets and in areas that have fewer bank branches per capita. We also find that the portion of LendingClub loans increases in areas where the local economy is not performing well.

TransUnion (2017) reported that, as of 2017:Q3, the personal unsecured loan market had reached nearly $112 billion.

Credit cards account for the lion’s share of unsecuredconsumer debt ($731 billion in 2017:Q3).3 Interestingly, there is evidence that credit card lending is related to geographic location. Carbo-Valverde and Perez-Saiz (2016) find that the probability of obtaining a credit card or line of credit from a bank increases 60 percent when the bank has a branch within 10 km of the household.

Source: Consumer Finance Institute

Read the full Report here.

Amazon vs Costco, PeerIQ’s Lending Earnings Insights (PeerIQ), Rated: AAA

Continuing our theme of technology lenders like Amazon branching into providing financial services, the obvious question is who might be next. Main street retailers like Walmart, Target and Costco could be likely candidates.

Source: PeerIQ

PeerIQ’s Lending Earnings Insights

Where are we in the credit cycle? Earnings calls indicate CEOs/CFOs are constructive on the health of the US consumer and see a tax reform as improving consumers’ disposable income.

Credit re-normalization continues across all major lending groups. Credit performance this quarter is mixed. We observe improvements, and record low delinquencies from ONDK, OMF, and FinTechs in particular. LendingClub expects 31 bps lower charge-offs going forward due to tighter credit standards. At Discover – a bellwether for personal loan performance – the net charge off rate jumped 92 bps YOY to 3.62% – the largest increase in several years.

Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. American Express increased loan loss provisions 33% although loan growth was only 14%.

Source: Discover Investor Relations

Behavior-tracking security tech gaining traction at banks (American Banker), Rated: AAA

Source: American Banker

Banks have started to implement behavioral biometrics more and more as it is seamless for customers and helps to better detect fraud; behavioral biometrics firms like BioCatch has provided banks with the type of security they like, customers cannot see if but it also is harder for criminals to spoof; BioCatch reviews more than 5 billion transactions per month and has about 60 million users in their system; another reason banks love this type of security is the privacy regulations are not as strict, the data is not personally identifiable and is based on type of actions.

 

Americans Are Misguided on Emergency Savings, and It’s Going to Cost Them (Madison), Rated: A

That’s because 38% of college-educated adults think an emergency fund of $5,000 or less is sufficient. That’s the latest from online lender Laurel Road, which also found that women — particularly younger ones — are generally more conservative when it comes to building their safety nets. Specifically, millennial women think people should have an average of $9,727 in an emergency fund, compared to millennial men who think an average of $8,040 works just fine.

The majority of working U.S. adults are nowhere close to having three months’ worth of living expenses in the bank. A good 57% have less than $1,000 in savings, according to data released by GOBankingRates last year, while 39% have no savings at all. If you’re part of either statistic, it means your finances aren’t in great shape — and that you need to make changes immediately.

Lendr Partners with MidCap Financial Trust to Close $ 25 Million Senior Credit Facility (PR Newswire), Rated: A

Lendr, a provider of flexible working capital to small- and medium-sized businesses, specializing in business finance and factoring solutions, announced today the closing of a $25 millionsenior credit facility. MidCap Financial Trust served as the Administrative Agent for the transaction. The deal agreement provides Lendr with increased financing power and the expansion of the facility to $50 million.

First RealFund Raises $ 600,000 of Preferred Equity for Brooklyn Apartment Building (Business Wire), Rated: A

First RealFund (“FRF”) has raised $600,000 of preferred equity financing for an apartment building undergoing a renovation and upgrade in Brooklyn’s Clinton Hill neighborhood.

The Sponsor, Duke Properties, owns a portfolio totaling more than 400 rental units with a geographic focus centered around New York City. “We target value-add properties in emerging neighborhoods and we apply innovative and effective renovation strategies based on our 15+ years of experience,” observed Albert Dweck, CEO of Duke Properties. “Our goal is to increase the value of our buildings while contributing to each neighborhood.”

 

THIS CHART SHOWS THE UNEQUAL STATE OF ACCESS TO FINTECH SERVICES IN AMERICA (Pacific Standard), Rated: A

According to a 2015 survey by the Federal Deposit Insurance Corporation, approximately 7 percent of American households are unbanked (meaning they have no checking or savings account), and an additional 19.9 percent are “underbanked.” The percentages are higher—approximately 50 percent—among both low-income and minority households.

New America Report

While approximately 22 percent of adults in high-poverty African-American communities have used online banking services in the past year, a significantly higher percentage (39 percent) of adults in wealthier black communities have used the technology.

Community bank launches digital account targeting the unbanked (American Banker), Rated: A

AxiomGo is a paperless checking account for customers who want an alternative to prepaid cards and traditional checking, the bank said.

The $560 million-asset Axiom partnered with the fintech firm Malauzai to design and deploy a mobile app that “meets the unique needs of a traditionally underbanked community, providing users a dynamic, bilingual, mobile banking experience,” it said Thursday.

Source FDIC, American banker

The app, which had a soft launch in December, has a Spanish-language option and enables users to open and fund an account and set up direct deposit via a mobile device. Other features include the ability to pay bills by snapping a photo; check deposit; fund transfer and peer-to-peer payments; and access to built-in budgeting and personal finance management tools.

Something I Wish I’d Had 20 Years Ago When I Started: Nontraditional Financing (Entrepreneur), Rated: A

Whether they were unable to secure credit because of bad (or nonexistent) credit history, sluggish cash flow or a lack of collateral, these growth-oriented businesses often find they’re not considered a good fit for traditional loans or lines of credit. There are, however, unexpected outlets available to them. I wish they’d been available to me when I started out 20 years ago.

What Student Loan Borrowers Can Expect from the Fed’s Rate Hike (Lend EDU), Rated: A

The short answer: Some student loan borrowers will pay more interest.

Most student loan borrowers depend on federal student loans, which have had a fixed interest rate since 2006. Although 1.4 million people yearly also depend on private student loans, which can have either a fixed rate or a variable rate that’s connected to either the LIBOR, prime or T-bill rates.

When the Fed increases these variable rates, borrowers with variable-rate loans will likely pay more interest. However, it will depend on the benchmark, according to CNBC.

How to Buy a Car with Bad Credit in 2018 (Auto Credit Express), Rated: B

Tips for Buying a Car with Bad Credit in 2018

With the right plan in place, you can prepare for success when financing a vehicle with poor credit. These tips can start you off on the right foot:

  • Check Your Credit 
  • Set Your Budget  
  • Have a Down Payment – Subprime lenders often require that you have a down payment, but it’s in your best interest to have one anyway.

 

AGORA Announces Partnership With Ignite Consulting Partners (Markets Insider), Rated: B

Agora Data, Inc. (“AGORA”), a Texas-based provider of technology solutions for the financial services industry, announces its partnership with industry leader Ignite Consulting Partners (“Ignite”) to provide increased transparency and security to the consumer finance marketplace through the development of a “Certified Seller Program.”

FIC Network Partners with Civic Technologies (Medium), Rated: B

Factury Inc., the company behind FIC Network, today announced a strategic partnership with Civic Technologies Inc. The partnership brings trusted, secure identity services to the token sales participants identification and enables FIC Network to streamline the identification and KYC process, enhancing the token sales privacy and security.

Arizona Becomes First U.S. State To Launch Regulatory Sandbox For Fintech (Forbes), Rated: B

Arizona has become the first state in the U.S. to adopt a “regulatory sandbox” to shepherd the development of new emerging industries like fintech, blockchain and cryptocurrencies within its borders.

The law will grant regulatory relief for innovators in these sectors who desire to bring new products to market within the state.

 

United Kingdom

MarketInvoice secures £135m for businesses from two European banks (Bdaily News), Rated: AAA

Business finance firm MarketInvoice has today (March 26) announced new agreements with two European banks, boosting its platform by £135m.

The London-based firm struck a deal with Portuguese bank Banco BNI Europa (BNI) to add £90m to its platform and another, with German bank Varengold Bank AG, worth £45m.

Banco BNI Europa initially invested £28.3m in 2016, following it up with £45m in May 2017 and a further £90m this month.

Square brings Instant Deposits to the UK (Finextra), Rated: AAA

Square Co-Founder and CEO Jack Dorsey announced the launch of a new Instant Deposit service for UK businesses at an event at London’s British Library last night.

The new product helps to solve one of the biggest challenges small businesses face: managing cash flow.
With the launch of Instant Deposit, sellers can now click a button in the Square App to get their funds into their bank account in around 20 minutes. All they need to do is link their bank account to their Square account. Square offers competitive, flat fees of 1.75% fee when taking in-person payments, and 2.5% for payments made over the phone, online or via digital invoice. Sellers using Instant Deposit will be charged an additional 1%.

Who wants to be a millionaire? Invest in Zopa’s IFISA for 26 years (Peer2Peer Finance), Rated: AAA

IT WOULD take 26 years to become a Zopa Innovative Finance ISA (IFISA) millionaire, the peer-to-peer lender has calculated.

Individuals would need to invest the full ISA allowance – which is £20,000 this tax year – into Zopa’s ISA Plus at today’s target return of 4.6 per cent to hit the million pound mark in 26 years.

This would result in an IFISA total of £1,009,509, with interest earned in that year of £44,395, Zopa said in a blog post on its website on Friday.

Innovations to utilise your tax allowance (City a.m.), Rated: A

These peer-to-peer investments broad- ly fall into three sectors: Consumer, SME and Property Lending.

There are two ways to invest in an IFISA. Customers can either invest manually or defer to the platform’s auto- invest function and let this do the hard work. Notably the ‘big three’ lenders – RateSetter, Funding Circle and Zopa – purely offer auto-invest options.

Another peer-to-peer consumer lender with an IFISA on the market is Lending Works. Launched in February 2017 it offers an annual return of six per cent for five-year loans or 4.5 per cent for three-year loans. This is an auto-invest product with a minimum investment of £10.

Proplend are also offering peer-to-peer investment within an IFISA, secured against first charges on commercial property. Investors can expect returns of between five per cent and 12 per cent.

Lloyds is ‘the largest digital bank in the UK,’ CEO says, and it wants to work with fintech startups (Business Insider), Rated: A

The CEO of Lloyds Bank told a conference in London on Thursday that his company is the biggest digital bank in the UK, eclipsing the wave of digital startups that have sprung up in the last few years.

António Horta Osório told the UK Treasury’s International Finance conference that Lloyds is “the largest digital bank in the UK, with a 22% share of new business.”

From Subprime Star to Losses, U.K.’s Provident Tries to Reboot (Bloomberg), Rated: A

If the FCA does reform the home credit market, its past moves could indicate what’s in store for Provident’s door-to-door lending. The FCA’s caps on payday lenders lowered the average cost of a typical payday loan to 60 pounds from 100 pounds and slashed default rates by a third. Leading player Wonga Group Ltd. saw its sales plunge 64 percent in 2015.

Source: Provident Annual Report

Fintech firms embracing Open Banking (London School Of Business & Finance), Rated: A

A report from professional services and Big Four firm EY has shown that fintech businesses in the UK are embracing Open Banking, with 59% seeing the initiative as an opportunity to reconsider their collaborations. 

The study, which surveyed more than 30 UK fintech businesses, found that more than 80% of businesses are getting ready for Open Banking, whilst 29% said that they are fully prepared for the initiative.

The study showed that businesses have started to prepare for the scheme by increasing the amount of staff they have working on Open Banking-related propositions, with 30% of businesses with 50 to 250 employees saying that they had teams of ten working on the changes.

An alternative moneymaker from property (Money Week), Rated: A

Investors looking for a higher yield from property should consider this bond from LendInvest.

Nearly every recent issue over the last few years has been at a rate of between 4% and 6%, which is well above the rate on offer from the government (via gilts) and investment-grade corporate bonds.

The platform is focused on short term, bridging and development loans rather than buy-to-let loans. In total, its initial £50m fundraising has been invested in 89 different loans (implying an average of around £560,000 per loan), with an average loan-to-value (LTV) ratio of about 57% – so the average loan looks to be backing a project worth around £1m.

Of those 89 loans, nearly all are first charge, and at least 19 (of the 87 first-charge loans) have a LTV ratio of under 50%. That means that if there were a sharp property recession, a good proportion of the book should have plenty of equity in case of default. By contrast, 17 of the loans have a LTV of 70% or more, which might seem a slightly more worrying state of affairs in a downturn – you’d only have an equity buffer of around 25% to 30% at most. It’s also worth noting that 63% of the loans are in the Greater London area, which is arguably more vulnerable in a downturn.

Financial services for good: ‘Data Nations’ team wins 24-hour Deloitte datathon (Future Scot), Rated: B

The overall winner of the second annual Datathon, hosted by business advisory firm Deloitte, was ‘Data Nations’, a team of data experts who developed FinTastic; a digital tool to help people make better financial decisions at key moments in their life.

 

China

Dual-currency prepaid credit card for Hong Kong-China commuters (Fintech Innovations), Rated: AAA

HKT and UnionPay International have launched a new Tap & Go UnionPay Prepaid Card for payments across mainland China.

The new card allows customers to instantaneously convert Hong Kong dollars into yuan using their Tap & Go mobile wallets when they are traveling in mainland China.

Customers can settle payments using their cards in mainland China as well as 168 countries and regions worldwide and for online transactions.

Report: China to Have Dynamic Approach to Fintech Innovation (Crowdfund Insider), Rated: A

A recent report in ECNS indicates China wants to have a “dynamic approach” regarding Fintech or internet finance. The report was referencing a press conference following the 13th National People’s Congress that was held earlier this month that involved the Zhou Xiaochuan, Governor of the People’s Bank of China.

In many respects, China is the largest  Fintech market in the world. It has the largest online lending (peer to peer lending) market by far and benefits from a population that is widely connected to the internet by mobile devices. A combination of demand from both consumers and businesses has fueled innovations in finance.

 

European Union

Buy-now-pay-later firm Klarna rings changes following fraud reports (Which?), Rated: AAA

Which? received reports that in some cases thieves had entered other people’s names and addresses then intercepted the package. A few weeks later, the victims received a letter from Klarna chasing up the payment, warning the debt will impact their credit rating.

A spokesperson for Klarna said that it takes fraud seriously, and when this issue arose it immediately looked at ways to combat it. Klarna said that anyone affected by fraud should contact the company to dispute the order, and that this will in not affect a customer’s credit rating.

The Challenger Bank Playbook: How 6 Digital Banking Startups Are Taking On Retail Banking (CBInsights), Rated: AAA

Europe has seen the first cohort of challenger banks (Atom BankTandem BankMonzoStarling Bank, Revolut, and N26) break out, collectively attracting $1B in funding and over 2.5M customers since 2014.

How challenger banks have leveraged regulation

Traditional approach: Atom BankTandem Bank, and Starling Bank prioritized having a bank charter prior to launch and built a suite of services that required a charter, believing it would create a moat around the platform. Atom Bank, for example, launched a savings account and SMB lending after regulatory approval. They also plan to launch current accounts but that roll out has so far been delayed.

Semi-traditional bank: Monzo and Germany-based N26 wanted to get customers onto the platform. To do so, Monzo launched a prepaid card instead of a full account product.

Monzo was going through a period of rapid growth, adding a reported 60K users a month when the company was granted a charter. In December 2017, they stopped adding new customers and announced plans to focus on transitioning the 500K existing customers off of prepaid cards and onto Monzo’s own current accounts.

As of February 2018, the company has a waitlist for new current account registrations, which means it’s missing out on roughly 180K potential new customers (at the peak growth rate of 60K per month) as it focuses on transitioning its existing customers off of the prepaid cards.

Fast-lane approach: Revolut challenged the conventional go-to market strategy by applying for an easier-to-acquire e-money license and targeting currency exchange rather than current accounts. Revolut initially focused on frequent travelers, a niche they believed was underserved. It built a digital currency exchange app, which allowed people to exchange money more frequently across countries without establishing multiple bank accounts.

Source CBInsights
Source CB Insights

Mobile adoption has driven uptake

Source: CB Insights

 

Fintech lending platform Loanboox eyes French expansion (Swiss Info), Rated: A

Award-winning Swiss fintech firm Loanboox is planning further expansion into Europe having obtained a foothold in Germany. The digital portal for matching institutions with investors plans a move into France and is also looking at other European markets.

Since its inception, Loanboox has now played a part in connecting around 1,000 clients and facilitating requests of some CHF9 billion ($9.5 billion) in public sector loan deals.

International

Millennials Are Driving One Of The Biggest Trends In Wealth Tech (CBInsights), Rated: AAA

Millennial investors stand to inherit $30T of potential assets from baby boomers. To attract and retain this next-generation of investors, advisors need to offer sustainability, clean energy, and social impact investing strategies.

Source: CBInsights

Why now?

There are massive demographic shifts underway in wealth management. Millennials are now the largest generation in the workforce and 2x more likely than the average investor to make a sustainable investment.

Social issues like climate change and gun-control are top of mind for the next-generation, and 75% of millennial investors believe their investments can influence change, according to one survey conducted by Morgan Stanley.

Source: CB Insights

Further, impact investing is a growing part of the wealth management market. In 2016, it’s estimated that sustainable investment assets grew to $22.89T globally, up 25% from 2014 according to the Global Sustainable Investment Alliance (GSIA).

Source: CB Insider

Australia and UK set up FinTech Bridge to deepen collaboration between governments, regulators, and industry bodies (OpenGovAsia), Rated: A

The Australian Treasurer, the Hon Scott Morrison MP, and UK Chancellor of the Exchequer, the Rt Hon Philip Hammond MP, signed an agreement in London on 22 March, 2018 to establish a FinTech bridge.

The UK-Australia FinTech Bridge will deepen collaboration between governments, regulators, and industry bodies in the two countries. It will also support improved access for Australian FinTech firms to the UK market.

The FinTech Bridge includes collaboration between Australian and UK governments to identify emerging FinTech trends and policy issues, enabling better policy positions.

How Can Fintech Boost the Micro-loan Scene? (Finextra), Rated: A

While the citizens of Norway, Finland, and Denmark all have at least one bank account, there are developing countries like the Central African Republic, Niger, and Madagascar, where the percentage of the unbanked population rises well above 85%. The poverty rates in such places are quite high, and is part of a vicious circle, since the inability to get a loan or to make deposits keeps people living day to day. The only available financial resource is social borrowing from friends and family. Yet, rapid technological advancements could turn this situation around.

Micro-financial institutions (MFIs) have developed a particular product, the microcredit, as a way to grant individuals the necessary money to expand a small business or to cover some surging costs, like healthcare.

Yet, the current model for these products is far from efficient, with high operational fees which translate to interest rates around 35-40%. It has even been said that micro-loans promote poverty.

 

WHERE DO CHIEF INVESTMENT OFFICERS COME FROM? (AllAboutAlpha), Rated: A

PwC forecasts a near doubling in global AUM over nine years, from $84.9 trillion in 2016 to $145.4 trillion in 2025, and predicts the 

Alternative credit scoring partnerships help fintech companies lend better (Business Standard), Rated: A

Financial technology have partnered with scoring to enable faster and more efficient lending. Online lending marketplaces and said their partnerships with information and CIBIL, respectively, to offer free reports to customers, made their lending more efficient.

The entire process is digitized to reduce the cost of operations and to bring speed and scale in the lending process”, said Rajiv Raj, Co-founder and director, is able to provide alternate data using technology we have not developed so far. We can use this data to further refine our existing scoring model,” said RBL Bank’s Toor.

Both and said that alternate data is most beneficial for assesement of new – to-customers for whom centralized or structured data is not available.

Cerberus Capital taps Nicastro as senior adviser (The PE Hub), Rated: B

Cerberus Capital Management, L.P. and its affiliates (“Cerberus”), a global leader in alternative investing, announced today that Roberto Nicastro has become a Senior Advisor to the firm. In this role, Mr. Nicastro will consult with Cerberus as it continues its focus on investment opportunities and strategic partnerships in the European financial services sector.

Australia

Why seller experience is the new battleground in today’s competitive gig economy (Australian Anthill), Rated: A

The battle between taxis and ride-sharing services might be old news already, but today, peer-to-peer lending platforms and other emerging tech-driven financial products are continuing to ruffle the feathers of our stalwart financial institutions.

According to studies, the gig economy could contribute around $2.7 trillion to global GDP by 2025.

India

Top PayU India execs invest in blockchain startup Nuo Bank (VCCircle), Rated: AAA

Mumbai-based blockchain startup Nuo Bank has raised $250,000 (Rs 1.6 crore) from payment gateway firm PayU India’s chief executive officer Amrish Rau and managing director Jitendra Gupta, a top executive has told VCCircle.

Savings are stored on the blockchain and instead of interest on savings, customers gets a virtual share in the revenue of the bank. Nuo Bank will offer around 20% of its 1 billion tokens – Nuo Coins – to customers.

These contracts will stipulate that up to 25% of the bank’s revenue should be reserved for these tokens.

With KYC norms kicking in, mobile wallet customers using gift cards to get around it (Money Control), Rated: A

Even as mobile wallets companies are struggling to ensure that the customers comply with KYC norms in order to load money to their wallets, customers are able to circumvent the process with the use of digital gift cards.

For instance, customers can add money to their Amazon Pay wallet by purchasing gift cards of Amazon. The gift card offers a code that once added to the wallet loads the money.

Users of prepaid payment instruments (PPI) such as mobile wallets were asked to complete the KYC requirements by February 28 by the Reserve Bank of India (RBI). The regulation bars customers from loading money into their wallets if they haven’t complied with the KYC norms. It also restricts them from carrying out remittance-based transactions. They will also not be allowed to transfer the cash in the wallet to their bank accounts.

SmartOwner: FinTech firm pioneering real-estate crowdfunding in India (Realty Fact), Rated: A

SmartOwner, India’s first and largest online marketplace for real estate investors, aims to make the process of investing in real estate a seamless and streamlined process. It was founded by Silicon Valley entrepreneurs having a considerable amount of experience in the technology and real-estate sectors. In fact, SmartOwner wants to make property investing as simple as investing in Mutual Funds and the Stock Market.

Asia

Long Blockchain Corp. Announces Minority Investment in TSLC with a Strategic Ownership Position in CASHe (Nasdaq), Rated: A

Long Blockchain Corp. (Nasdaq: LBCC) (the “Company” or “Long Blockchain”) today announced that it has closed on a strategic investment in TSLC Pte Ltd. (“TSLC”). TSLC is the parent company of CASHe, a provider of digital money and short-term financial products to young millennials across India.

Latin America

Watchdog Eyes Brazil’s Credit Card Industry On Nubank Complaint (PYMNTS), Rated: AAA

In Brazil, the antitrust watchdog, Cade, is looking into the credit card industry, with an eye on possible anticompetitive practices.

The investigation comes, Reuters reports, after a complaint by Nubank, a Goldman Sachs-funded FinTech. The company offers credit cards and checking accounts to 3 million people in Brazil. Nubank also has approval in place to become a bank. Earlier this month, the company raised $150 million in a financing round that was led by DST Global Investment Partners. Last year, the company was granted a credit line of 455 million reais, or about $137.71 million.

Authors:

George Popescu
Allen Taylor

Monday June 5 2017, Daily News Digest

ratesetter alfi

In the June 1 issue of Lending-Times, we highlighted a TransUnion report on how to identify and fight online fraud. A typo suggested we didn’t recommend report, however, we highly recommend it and you can download it here. News Comments Today’s main news: After buying George Banco RateSetter will not lend to its customers. Amartha receives regulatory […]

ratesetter alfi

In the June 1 issue of Lending-Times, we highlighted a TransUnion report on how to identify and fight online fraud. A typo suggested we didn’t recommend report, however, we highly recommend it and you can download it here.

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

Africa

News Summary

United States

Latest PeerIQ Loan Performance Monitor (PeerIQ), Rated: AAA

The US economy generated a seasonally adjusted 138 K jobs last month (vs. expectation of 185K) bringing the jobless rate to 4.2% and another step closer to full employment. As inflation risks emerge, the Fed is widely expected to increase rates another 25 bps at the upcoming FOMC meeting on June 14th.

On the regulatory front, the US House will vote on a bill sponsored by Jeb Hensarling (R-TX) to reform and repeal portions of the landmark Dodd-Frank financial reform bill.

On the securitization front, student lending originator CommonBond priced its $232 Mn private student loan ABS. Goldman Sachs was the structuring lead, and co-leads include Barclays and Citi. Also, AB Alert reports that Lending Club is preparing a multi-seller deal which includes collateral from multiple originators including potentially loans from Lending Club’s own balance sheet. As PeerIQ noted in the summer of last year, we believe marketplace lenders that can offer whole loan investors a reliable path to liquidity and low-cost permanent financing can generate a competitive advantage.

PeerIQ is pleased to present the PeerIQ Loan Performance Monitor. The monitor tracks interest rates, delinquency, and charge-off rates for both platforms across vintages and grades.

Source: PeerIQ MPL Loan Performance Monitor June 2017

Global Debt Registry Appoints Charlie Moore as President (PR.com), Rated: A

Global Debt Registry (GDR), the asset certainty company known for its loan validation expertise, today announced Charlie Moore, the firm’s Chief Commercial Officer, has been named President as former Chairman and CEO Mark Parsells returns to his FinTech consultancy practice.

As President, Moore will be focused on the continued delivery of loan level diligence services to the investment community, leading the daily operations of the company. Moore previously led the firm’s commercial operations including business development, partnerships and marketing and has over 20 years of experience building financial services technology businesses in the U.S. and Europe.

Investing in Real Estate: Single Family Homes or Multi-Family? (Crowdfund Insider), Rated: A

“Institutional multifamily” typically means dozens, if not hundreds, of distinct units within a single property, managed by a seasoned professional management firm. These properties have many different tenants, with a diversity of employment situations and lease structures. If one tenant leaves abruptly, many others will remain in place, and overall rental income will suffer only marginally. Multifamily managers can further mitigate vacancy risk by structuring leases to end on a rolling basis. Single family investments don’t carry the same benefit – a tenant living in a single-family home constitutes 100% economic loss for as long as the property remains vacant.

Investing through online crowdfunding platforms gives individual investors the opportunity to invest in a small piece of large multifamily projects that are institutional grade and have passed the underwriting of well-established lenders and co-investors who often have decades and billions of dollars of investing under their belt. The same can’t be said of most single-family investments.

While these benefits are most apparent for direct owners of (investors in) property, this benefit of multifamily investing should be passed along to individuals who co-invest via an online (crowdfunding) platform.

GTCR Announces Acquisition of Sage Payment Solutions (Guru Focus), Rated: A

GTCR, a leading private equity firm, announced today that it has entered into a definitive agreement to acquire Sage Payment Solutions, Inc. (“SPS” or the “Company”) for $260 million. SPS, headquartered in Reston, Virginia, is a leading provider of payment processing and merchant acquiring solutions in North America. GTCR is acquiring SPS from The Sage Group plc (LSE: SGE) (“Sage”), a global provider of integrated accounting, payroll and payment solutions headquartered in the UK. GTCR is partnering with SPS management to pursue organic growth initiatives and fund future acquisitions in the payment processing industry. To support this strategy, GTCR has committed up to $350 million of equity capital to the platform. The transaction is expected to close in the third quarter following receipt of regulatory approvals and other consents.

SPS provides credit card, ACH, check, gift and loyalty card processing services to small and medium-sized businesses (“SMBs”) in the United States and Canada.

Where Incumbents Are Making Investments In Wealth Tech (CB Insights), Rated: A

Deals to wealth tech startups hit a record of 30 investments in Q1’17 amid a number of new early-stage entrants globally. In particular, robo-advisors have been gaining prominence and taking on incumbents in nearly 20 countries around the world.

Key takeaways:

  • Since 2012, several banks and wealth management firms have made co-invests in wealth tech. For instance, Goldman Sachs and JP Morgan Chase are co-investors in Motif, Northwestern Mutual and Citi Ventures are co-invested in Betterment, and UBS and Santander InnoVentures are co-investors in SigFig.
  • Incumbents have made the most investments to companies that fall into our robo-advisors category, including BettermentMotifPersonal CapitalWealthNaviFolioForwardLane, and SigFig
  • Blackrock invested in Personal Capital, the second most well-funded wealth tech company with approximately $207M in funding.
  • LearnVest is the only featured company on our map to have exited.

AUTOGRAVITY CAR FINANCING APP NOW AVAILABLE ACROSS NEW JERSEY (AutoGravity), Rated: A

AutoGravity, a FinTech pioneer revolutionizing car shopping and financing with the power of the smartphone, has unveiled an innovative mobile application to help car buyers in the Garden State finance any new or used car in minutes in just four easy steps.

With its unique platform, the AutoGravity app guides car buyers through an intuitive four-step process:

  1. Choose a car – Select any make, model and trim of any new or used car.
  2. Find a dealer – Choose from AutoGravity’s proprietary national dealership database; geolocation helps quickly identify nearby dealers that sell the car the selected.
  3. Search for financing – Car buyers can scan their driver’s license and connect to social media to quickly pre-fill the finance application.
  4. Select a lender – Receive up to four binding finance offers in minutes, then select a loan or lease offer and head to the dealership to complete the purchase.

FRB Governor: Data Aggregators Impact Bank Safety, Soundness as Part of the “Fintech Stack” (JD Supra), Rated: A

In a recent speech at the Northwestern Kellogg Public-Private Interface Conference, Federal Reserve Board Governor Lael Brainard indicated that the relationships between banks and data aggregators within the “fintech stack” may present safety and soundness concerns that warrant oversight by the FRB (and perhaps other prudential regulators).

Governor Brainard indicated that banks will need to apply significant resources to update their data infrastructure to allow access to real-time data for third-party developers.

Governor Brainard explained that because banks are more tightly regulated than the average fintech company, consumer protection and safety and soundness considerations should supersede experimental innovation.

While some banks may elect to give access to data aggregators, Governor Brainard observed that other banks may be unwilling or unable to provide permissioned access to third parties due to fears about compliance with laws and regulations and the ability to monitor and control the use and access to data. She then noted that the Fed’s supervisory role should focus on ensuring that financial institutions subject to its supervision operate safely and follow applicable law. At the same time, she stated that the Fed has “a strong interest in permitting socially beneficial innovations to flourish, while ensuring the risks that they may present are appropriately managed, consistent with the legal requirements.”

PeerStreet’s Jessica Murray Named One of HousingWire’s 2017 Rising Stars (BusinessWire), Rated: B

PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that its VP of Strategy, Jessica Murray, has been named to HousingWire’s 2017 Rising Stars list of young leaders to watch in the housing industry. HousingWire’s 2017 Rising Stars list recognizes talent that demonstrate leadership and innovation, inspiring not only those within their company, but also their communities and the industry at large.

In her time at PeerStreet, Murray established the company voice through social media, content marketing, customer communications and placed media while serving as the Head of Communications. In her current role, Murray maintains many strategic and operational responsibilities, which also include managing PeerStreet’s capital markets and hiring.

Roostify Names Sandeep Aji as Vice President of Products (BusinessWire), Rated: B

Roostify, a provider of automated mortgage transaction technology, today announced it has named Sandeep Aji as Vice President of Products. Aji will be responsible for overseeing the continued development of Roostify’s mortgage technology platform – from enabling more API-driven capabilities to improving user experience for lenders and consumers.

Prior to Roostify, Aji was Co-Founder and CEO of Impartus, a cloud-based, SaaS platform for higher education.

How To Get A Second Chance With Your Bank (NASDAQ), Rated: B

Despite a higher cost of capital, an online loan may be necessary for a small business. The reason: There has been a continued downtrend in lending from banks to small businesses. “Together, 10 of the largest banks issuing small loans to business lent $44.7 billion in 2014, down 38% from a peak of $72.5 billion in 2006,” reports The Wall Street Journal. Meanwhile, nonbank lenders have seized the opportunity and captured 26% market share up from 10%.

United Kingdom

RateSetter decides not to lend to George Banco’s customers (P2P Finance News), Rated: AAA

RATESETTER has announced that it has decided not to lend directly to George Banco’s customers as there are “better uses of our development resources”.

The ‘big three’ peer-to-peer lender bought a stake in the guarantor loan provider, which was a former wholesale lending partner, last month. It had also agreed to lend directly to its 10,000 customers, with George Banco acting as introducer.

The business and consumer lender will keep its equity stake in the firm and its co-founder Peter Behrens will remain as a non-executive director on George Banco’s board.

P2P platforms facing hybrid dilemma (P2P Finance News), Rated: A

THE PEER-TO-PEER finance industry could be on its way to becoming a polarised market, where the biggest firms stick to their core P2P lending activities and the rest are forced to evolve into hybrid models.

A wide range of industry onlookers have told Peer2Peer Finance News that it will be impossible for smaller firms to achieve profitability without either expanding into balance sheet lending, merging with direct lenders or morphing into a business model closer to that of a collective investment scheme.

“It’s incredibly difficult to build a straightforward P2P business to the size where it becomes profitable,” said Andy Davis, author of a report that pointed to hybrid models as an inevitable evolution in the sector.

“It’s intrinsically more profitable to arrange and lend rather than only arrange. We’re going to start seeing hybrid loans emerge.”

P2P is ultimately just a subset of direct non-bank lending, he argued, but with different technology in place and different market access. When a direct lender sets up a P2P platform, its return on capital goes up exponentially and it can immediately recycle those returns to originate more lending.

“Hybrid lending from some providers will increasingly be the chosen solution. This is not an issue or a problem for investors in and of itself, ” added 4th Way analyst Neil Faulkner.

Safety in banking (SilverSeek), Rated: A

It was probably with sound money and sound banking in mind that Goldmoney recently announced a tie-up with a British-based and regulated peer-to-peer lender, which enables owners of gold and silver bullion to use it as collateral to raise funds.ii The purpose of this article is to explain how honest banking worked before fractional reserve banking was devised. This is the logic behind the recently announced collaboration between Goldmoney and Lend & Borrow Trust Company Ltd.

On 23rd May, Goldmoney announced an investment and collaboration in and with the UK-based peer-to-peer lending platform, Lend & Borrow Trust Company Ltd. LBT is unique, being the only peer-to-peer facility in Western financial markets that allows businesses and individuals to use their investment-grade physical bullion as collateral against loans, without the loan obligations and collateral being comingled with other customer business.

At no time is LBT a principal in the transaction, so lenders and borrowers can agree an interest rate without having to take LBT’s creditworthiness into account, based solely on physical gold or silver as collateral.

The logic of a collaboration between Goldmoney and LBT is obvious, in that it enables customers to raise finance using bullion. But there is an underlying sound-money logic as well. Between them, Goldmoney and LBT are the template for sound-money banking as it existed before fractional reserve banking became the standard banking model, after Britain’s Bank Charter Act of 1844.

Peer-to-peer lending promised 6%, but I’ve been left red-faced and in the red (The Guardian), Rated: A

When James Patterson invested £1,000 in the peer-to-peer (P2P) lender Funding Circle back in 2015, his hope was that his money would grow a bit faster than the pitiful rates of interest offered by his bank. At the time, the relatively new lender was promising returns of 5-6% a year – 10 times more than his bank.

However, almost a year and a half on, his investment is now worth just £988 – a loss of £12. It’s because one of the firms that 10% of his money was lent to defaulted, leaving his account £128 in the red – a sum that his other investments at the platform have struggled to make up.

It has delivered some impressive returns to savers in recent years but, Patterson says, after his experience, he will not be investing anymore.

James Meekings, co-founder and managing director of Funding Circle, says Patterson will be back in the black in the next couple of months as the firm expects to recover some of his losses which, in turn, will be passed on to him.

Assetz Capital Review – 30 Days Access Account with 4.75% Target Rate (P2P-Banking), Rated: A

Recently I opened an account at p2p lending marketplace Assetz Capital to gain some first hand experiences. Assetz Capital offers secured business loans to small and medium British SMEs. I decided to start with the 30 days access account as it is mostly hands off and deposited a tiny amount, which was credited within an hour.

Assetz Capital has a minimum investment amount of 1 GBP. Assetz is open to international investors, but a UK bank account is required.

Assetz also offers a quick access account with 3.75% target rate, designed to provide immediate access to cash, in normal market conditions, for investors. Currently 19 million GBP are invested in this account. Further account types are the ‘Great British Business Account’ (GBBA) with 7% target rate, the ‘Green Energy Income Account’ (GEIA) with 7% target rate and the ‘Manual Loan Investment Account’ (MLIA) with 5.5% to 18% gross rate. See comparison of Assetz accounts. Assetz also features a secondary market without fees providing liquidity.

Assetz Capital adds ex-bank specialist to regional director team (P2P Finance News), Rated: B

ASSETZ CAPITAL has hired former bank finance specialist Samantha Williamson to boost its team of regional relationship directors.

Williamson will supervise the peer-to-peer lending platform’s activities in the South Manchester region.

She previously worked as business development manager at financial independent broker Positive Commercial Finance, helping firms grow through non-traditional finance avenues.

Prior to that, she served as senior real estate manager at Barclays and commercial lending manager at Santander, both posts located in the Manchester area.

From beach to boardroom: Iced coffee king surfing to success (London Loves Business), Rated: B

Who’s bankrolling you? 

We are. And so is Funding Circle. The banks have been completely useless.

What advice would you give other entrepreneurs trying to secure that kind of finance?

It depends on how much you’re looking for and how long you’ve been trading, but if you need money, I’d go crowd funding, 100 per cent. If you are well under the table with trading, I’d take a look at funding circle.

China

WeiyangX Fintech Review (Crowdfund Insider), Rated: AAA

Search engine giant Baidu Inc. is to quit crowdfunding market and pay more attention on artificial intelligence”]. Users will not see the “Baidu Crowdfunding” channel when they log in their Baidu Finance account, but will still be able to check the crowdfunding history.

On May 25, China Rapid Finance Limited, a leading online consumer lending marketplace in China, reported its unaudited financial results for the quarter ended March 31, 2017.

2017

2016

Growth rate

Transaction and service fees

USD16.8 million

USD14.8 million

13.1%

Consumption loans

USD6.7 million

USD1.5 million

336.8%

Maintenance loans

USD10.1 million

USD13.3 million

24.4%

Operating aspect:

  1. Number of new borrowers added in the first quarter of 2017 was approximately 545,000. As of March 31, 2017, the Company had reached approximately 2 million unique borrowers on its marketplace since inception, and the total number of loans facilitated on the Company’s platform grew to approximately 15 million.
  2. Total loan volume facilitated on the Company’s marketplace in the first quarter of 2017 increased to USD485 million, primarily driven by the rapid expansion of consumption loans, which accounted for USD405 million of the total loan volume.
  3. Total number of consumption loans facilitated in the first quarter of 2017 was 4 million, while total number of maintenance loans facilitated was 6,000.

Ant Financial, the financial arm of Chinese e-commerce giant Alibaba, became the latest player in Hong Kong’s competitive mobile payments market after it announced the launch of its mobile wallet for Hong Kong users on May 24.

On May 25, Ant Financial announced to launch the car insurance rating mechanism for the insurance industry to improve the risk management capability.

Three primary reasons for the boosting Cash Loan in China (Xing Ping She Email), Rated: AAA

By Dr. Yang Li

From 2017, the number of cash loan companies have increased tremendously in China. Various kinds of cash loan firms have mushroomed, including CashBus, MagicCash, GoldBar of JingDong, Ants Borrow of Alibaba, WeiliDai of Tencent, etc. So far, there are already thousands of small cash loan platforms exists in China, and many of them have received fund financing from top VC investors such as Sequoia Capital, Innovation Works, and ZhenFund.

Why cash loan growth explosively in a short period? The following three reasons may explain.

Reason 1: The lower threshold of credit system by Big data method.
In the past, credit system was mainly referred to Central bank credit system, however, it could not cover most people. The information of vast majority of low-income, unregistered social groups have not been collected in the credit system, but they have extensive borrowing needs.

As big data technology developing fast these years, many data companies are growing rapidly, and they acquired data for business use. Owing to the big data credit system, cash loan platforms are able to evaluate the borrower’s credit situation from multi-dimensions: traits of character, consumption habits, loan demand, repayment willingness, etc. In this way, the problem of information asymmetry between the investors and borrowers is eliminated, making the cash loan business prosper in the broadest social group.

Reason 2: Vertical specialization of cash loan industry provides more business opportunities
The division of the cash loan industry is now divided into receipt, audit, lending and collection, each process are served by independent and professional companies or teams. With the booming of cash loans, an ecological chain around the industry has been derived, including data processing companies, business consulting companies, law office specialized in collection, etc.

The vertical specialization of the industry made cash loan platforms extremely convenient in obtaining customers, audit management and collection, so that the platforms can save more costs and gain more business opportunities.

Reason 3: Changing of the public consumption concept stimulated loan demands
With the improvement of people’s living standards and the popularization of deficit spending concept, the public consumption concept has been changing a lot.

Consumer demand is beginning to diversify. There are not only the need for food and clothing, but also spiritual needs of learning, fitness and travel, etc. And the consumers’ attitudes are gradually transforming from rational consumption to perceptual advanced consumption. Spending “future money” at “the present” is becoming a common social spending habit, for example, more and more people choose to purchase cars, houses and 3C electronic products on installment. The growing advanced consumption has stimulated the loan demand across society.

European Union

Fintech is King of Lithuania’s Tech Revolution (Red Herring), Rated: A

Under Soviet rule Lithuania became known as a center for laser technology and bioscience, the latter of which now accounts for 1% of GDP and is growing at almost 25% annually. Last year businessmen, scientists and the government signed an agreement to make Lithuania the European hub for health and biotech innovation by 2020.

But it is fintech that has taken the strongest grip on the country’s tech scene. TransferGo, WoraPay, Blender, Simplex and IBS are just a few of a small but growing clique of firms taking advantage of strong local talent, low wages and public pledges.

Lithuania is the only jurisdiction in the EU to have a special-purpose banking license, allowing the foundation of a bank with registered capital of just €1m ($1.1m).

Vaidas Adomauskas first imagined WoraPay, a payment platform, while waiting to pay for food at a restaurant. Now it is backed with almost $1m in funding and is headquartered in London–which many believe to be Europe’s fintech capital.

Capitalizing on the Lithuanian fintech craze, Rise, the Barclays-backed Rise coworking franchise, opened a location in capital city Vilnius last year. It has 50 working spaces, an auditorium and conferencing facilities for entrepreneurs trying to get a foothold in financial tech.

International

Marketplace Lending News Roundup – June 3 (Lend Academy), Rated: AAA

Behind the Scenes at Orchard Platform, a Struggle to Innovate from The New York Times – The long and winding road of Orchard’s plans for a secondary loan market.

Peer-to-peer lender RateSetter raises £13m, Woodford and Artemis lead from AltFi – In the UK RateSetter has closed another £13M equity round as they get closer to full FCA approval.

SoFi and JetBlue Help Customers Managing Student Loans Earn Reward Travel from PR Newswire – This week SoFi announced that you can earn up to 50,000 JetBlue reward points by refinancing a student loan.

Did someone cancel the fintech revolution? from Finextra – The promise of fintech has not yet been released says Accenture in a new report.

Kind of Blue from FinTech Junkie – The latest from Frank Rotman comparing startups to jazz and what to do when you hit a wrong note.

Are Small Business Borrowers Bank-Loyal to a Fault? from deBanked – Despite low approval rates banks are still the top choice for entrepreneurs looking for a loan.

The impact of the latest adjustments in peer-to-peer/marketplace lending from AltFi – Good summary of the latest developments at the big four marketplace lenders in the UK.

The impact of the latest adjustments in peer-to-peer/marketplace lending (AltFi), Rated: AAA

Funding Circle ditches property

Leading small business loans marketplace Funding Circle announced that it would be winding up its property-secured lending in April, with a view to stopping entirely by mid-2018.

AltFi Data’s analytics engine shows that only one quarterly cohort of Funding Circle’s property-backed lending resulted in any bad debt. This came in the third quarter of 2015. Bad debts for this cohort have reached 4.67 per cent – but it’s important to note that recoveries may still be made, and that this is just one of 17 quarterly cohorts. The size of this cohort is about £34m.

RateSetter stops wholesale lending

AltFi Data told us in March that RateSetter had originated £273m loans to lending businesses, equating to 15.6 per cent of its £1.748bn cumulative lending total at the time.

The firm has now lent a little over £1.9bn in loans, of which 15.4 per cent are wholesale. As can be seen in the chart below, the overall trend is down.

More capacity at MarketInvoice?

MarketInvoice announced the launch of a new longer-term product (MarketInvoice Pro) in February. This allows businesses to draw an open funding line, secured against their outstanding invoices.

Well, since unveiling the new product in February, MarketInvoice has posted back-to-back monthly origination records (versus all previous months in its existence), with £42m in March and £35m in April.

But this isn’t yet feeding through in terms of outstanding principal per month, which is hovering at around £25m per month, versus an all-time high of £35m.

Investors are falling over themselves for Zopa loans, but should they be?

The net returns delivered to Zopa investors has been fairly consistent at between 4.5 and 5.0 per cent for the past two and a half years. But the rate being paid by its borrowers is climbing.

Zopa’s average gross interest rate has steadily increased from 5.3 per cent at the outset of 2015 to 8.4 per cent in April 2017. The reason for this is simply that a higher proportion of Zopa’s loans are now being made to “riskier” borrowers. But the returns being offered by the platform haven’t yet adjusted to reflect this.

Crowdfunding, millennial buyers and higher mortgage rule real estate in 2017 (International Business Times), Rated: A

Interestingly, real estate crowdfunding is not limited to the US market. It is actually one of the hottest trends in the overall global realty market today. Realty crowdfunding platforms are continuously being launched in the UAE, Asia and even Egypt. In fact, a leading Singapore-based realty crowdfunding platform recently raised around S$1 million (AU$0.98 million) in the first funding round for a company.

If crowdfunding is the signature trend of real estate in 2017, the rise of millennial home buyers is a close second. The oldest millennials are now in their mid-30s and are planning to have their own houses. Marriage is on the cards for most of them, further creating the urgency for a new home. Most jobs have been designed for the 25 to 34 age bracket, with wages happily rising. Overall, it is a highly favourable situation for millennials to think of a new house this year.

On the other hand, the recent Brexit fallout has had a major impact in the contemporary real estate scene. With UK realty currently going through an uncertain phase, the US real estate scene is fast hogging the limelight in the global property market. The Chinese market, too, is currently moving along a slow tide, which presents an advantage for US developers. The American commercial real estate is to benefit in particular, and speculations are on the rise about steady foreign investments in the country.

Crowdsurfer adds Zopa data (Finextra), Rated: A

Zopa, the world’s first and one of the largest peer-to-peer (P2P) lenders, has lent in excess of £2.3 billion to customers in the UK, and the addition of its data set will deepen Crowdsurfer’s insight into the global alternative finance market.

Cambridge-based Crowdsurfer analyses data from more than 900 different alternative finance platforms, including equity, bonds, SME debt, P2P and more, and has mapped more than ten million transactions to provide the most in-depth take on global trends and patterns in alternative finance.

How robo advice fees compare to multi-asset funds (AltFi), Rated: A

Will robo advice spark a price war? We crunched the numbers looking at how much platforms charge compared to a typical multi asset fund.

Vanguard, a U.S. based passive fund manager, is planning to sell its index funds directly to UK consumers, charging just 0.23 per cent annually. Previously, individuals had to invest in funds through an intermediary or, more recently, via robo advisor to get access to the company’s funds.

Taking a look at the top UK robo advice platforms, we found that an investment of £10,000 would cost an average of £6.79 a month in both management, platform, and fund fees.

A £10,000 investment in 2015 held in the average fund in the IA’s 20-60% Shares sector would have cost an average £9.83 per month for a mixed fund, while the average fund in the IA’s 40-85% Shares sector would cost £10.25, according to data on the average ongoing charges figure from the Investment Association.

Putting this all together, for the average robo advice platform a £10,000 portfolio amounts to approximately 0.81 per cent fees, or £81 over a year. In comparison, the average multi-asset fund charges between 1.18 per cent and 1.23 per cent over the course of the year, with IA’s 40-85% Shares sector the higher of the two. This amounts to £118-£123 on £10,000, or approximately £40 more than the average robo advice portfolio.

Pre-RDR fees would have cost £15.42 and £14.92 on a £10,000 investment.

Moneyfarm, a robo advisor based in the UK and Italy, stands out because it doesn’t charge a management fee for any investments under £10,000, just the fund fee. Investments over £10,000 are charged 0.6 per cent.

Insurtech App Trov Connects with AXA Insurance & Celebrates UK Launch (Crowdfund Insider), Rated: A

Trov has launched its on­-demand insurance platform in the UK, in partnership with AXA Insurance. Users are provided with a personalized quote and can quickly turn insurance on (or off) for an item without the need for any interaction with a traditional insurance agent.

Australia

FinTech Australia Announces New Board of Directors (Crowdfund Insider), Rated: A

FinTech Australia has announced the election of its new Board of Directors. The new Board is said to align with constitutional changes regarding gender diversity and representation from a broad number of states.

The new board members are:

  • David Ball – CEO and co-founder of HyperBank (Queensland representative)
  • Natalie Dinsdale – Director of Marketing at Tyro (NSW representative)
  • Luke Howes – Co-founder and CEO of Proviso (South Australian representative)
  • Lucy Liu – Chief Operating Officer of Airwallex (Victorian representative)
  • Alan Tsen – CEO of The Week in Bitcoin (Victorian representative)
  • Emma Weston – Co-founder and CEO of AgriDigital (NSW representative)

India

Monexo: Trying to fill the void (Free Press Journal), Rated: A

Our business structure focuses on P2P lending to three segments of borrowers – salaried individuals, practising professionals, and small and medium enterprise (SME). Right now, however, we focus only on the salaried individual segment.

Our typical borrower profile is salaried, aged 25-30 years, with an average salary of Rs 25, 000 for which the average borrowing works out upto Rs 1.50 lakh. Such a working population today is much more independent and amenable to migration. This in turn brings a lot of minor expenses and there such loans are very useful. Such borrowers are often under the under the banks’ lending radar who offer them Rs 8-10 lakh loans to start with but we create options for them (based on the amount requirement). The borrowers that we target are usually digitally savvy and appreciates the benefits that we bring to the table.

What are the benefits offered to borrowers?

First and foremost is time-saving. The borrower is made known in a minute if the loan is available or not.

Another benefit of Monexo is that it is active in the entire activity chain of P2P lending – origination, screening, profile-grading, pricing of each application, disbursement, client servicing and lastly debt collection. This is right now a key differentiator among our contemporaries.

Describe the business structure and how it would attract lenders?

Our fees are taken out of repayments made to lender (2.5 per cent) based on their actual EMI receipts.

Borrowers are graded in categories from M1 down to M8. They get an automatic upgrade when they create a repayment track record. One key criteria is that debt should not be more than 60 per cent of the borrowers’ income.

Our typical business process is approval of only 25 per cent of the applications submitted. This is because most of the 75 per cent are already defaulters somewhere.

Fintech Firm Pinjam Gears Up for Growth Spurt This Year (Jakarta Globe), Rated: A

Fintech company Gadai Pinjam Indonesia is gearing up for a growth spurt this year in a mission to expand the reach of financial services to unbanked small and medium enterprises.

The company, which provides pawnshop services and micro-loans through its online platform Pinjam.co.id, eyes to disburse between Rp 100 billion ($7.52 million) and Rp 200 billion this year, increasing up to 10 times its loan outstanding.

Pinjam will cooperate with state-owned post Pos Indonesia as well as some gold shops, to increase the number of outlets where their customers can pawn their goods. It plans to have more than 100 points in Jakarta by the end of this year.

Asia

P2P Lender Amartha Receives Regulatory Approval from Indonesian Financial Services Authority (Crowdfund Insider), Rated: AAA

Jakarta based Amartha (PT Amartha Micro Fintek) a peer to peer lending platform launched in 2010, is now officially registered with the Directorate of Institutional and Product IKNB (Financial Industry Non Bank) Financial Services Authority ( FSA).

Amartha said the approval by the financial regulators will boost public confidence in the platform and investing. Currently Amartha claims to have successfully financed over 34,000 micro businesses in parts of Indonesia to more than 10,000 registered investors, with total funds distributed to 87 billion rupiah (USD $6.5M).

Why Your Financial Planner Should Be a Robot (Knowledge.insead.edu), Rated: A

In 2015 the Singapore-based bank, DBS, surveyed 600 local mothers in their 30s about retirement. The results were revealing. Three-quarters had not started planning for their retirement. Only 25 percent thought they would have sufficient funds to retire on. The average Singaporean household, headed by a 45-year-old, spends US$3,800 per month. However, 69 per cent believe they would be able to retire on less than US$2,200 a month, while 38 per cent believe it would be less than US$1,500.

According to a 2015 Nielsen survey, six out of 10 Singaporeans only start saving for their retirement once they reach 45. They believe they will just need to double their current savings to retire comfortably with peace of mind.

In China, the social pension is the primary source of retirement income. However, 43 percent of respondents in a survey conducted by the Society of Actuaries in 2016 believe the government or their company will cut their benefits in the future. With an estimated 329 million Chinese turning 65 by 2050, it is projected there will be a US$118 trillion pension deficit.

At 55, the average male has US$98,000 and female has US$85,000, bringing the total household retirement assets at around US$183,000. However the couple now has only 12 years until retirement.

In Singapore, fintech boom is missing the ‘tech’ (Southeast Asia Globe), Rated: B

Big banks are putting a lot of effort in to improve their customer experience. WeChat Pay might not be big right now, but Alibaba bought Lazada, so Alipay’s coming. That’s going to change a lot of things. Banks are trying hard to capture their customers’ attention and build strong ties. Small-to-medium enterprise lending and security is big, particularly in Singapore. How do you protect your data? Singapore is a very strong private banking hub: a lot of money is parked here from very strange people. You don’t want to have this information leaked, so the regulation techspace is being upgraded.

Africa

Some options if you want advice from a robot (IOL), Rated: A

Jaco van Tonder, the director of advisory services at Investec Asset Management, says robo-advisers are useful to clients who cannot afford to pay for face-to-face professional financial advice.

Personal Finance looks at three offerings in the South African market:

1. Sygnia RoboAdvisor. The service was launched last year by listed asset manager Sygnia. Depending on your investment requirement and risk appetite, RoboAdvisor will expose you to unit trusts, exchange traded funds (ETFs), money market funds or cash.

• Minimum investment amounts: lump sum of R10 000 or a monthly debit order of R500.

• Management fees: 0.5% a year including VAT.

2. iTransactGo. This service is operated by Johannesburg-based exchange traded product investment platform iTransact. The company was established in 2010, and it launched its robo-adviser service last month.

• Minimum investment: lump sum of R5 000 or a minimum monthly contribution of R300.

• Investment term: there is a minimum term of one year.

• Management fees: not more than 1.14% a year including VAT, depending on the size of the investment.

3. Bizank. The company is independently owned and has appointed Anchor Capital as the asset manager of its robo-adviser. The robo-adviser, which was launched last year, creates a portfolio to meet your investment goal (for example, retirement or buying a house) based on your responses to its questions.

• Minimum investment: a lump sum of R10 000 or a monthly debit order of R1 000.

• Management fees: between 1% and 1.5% excluding VAT.

Authors:

George Popescu
Allen Taylor