Tuesday August 22 2017, Daily News Digest

Peter Renton investment results

News Comments Today’s main news: PawnHero lands $9.7M financing. AltFi Data scoops equity investment, appoints advisory board. Funding Circle to launch new Autobid, Autosell lending features. SocietyOne celebrates fifth anniversary. Today’s main analysis: Peter Renton’s MPL results for Q2 2017. Today’s thought-provoking articles: How Amazon’s Alexa will upend wealth management. The future of banking investments. Will finance businesses jeopardize the credit quality […]

Peter Renton investment results

News Comments

United States

United Kingdom

China

European Union

International

  • Instant gratification and real-time vacations. AT: “In 2005, my wife and I toured Germany by train. At that time, we had our laptops and managed to book hospitality services using the public railway system’s free wi-fi. We thought it was cool that we could plan a two-week vacation on the fly and move from one city to the next with minimal planning. Today’s technology is even better and more readily available for this type of ‘vagabonding’.”
  • International REITs.

Australia

APAC

Middle East

News Summary

United States

My Quarterly Marketplace Lending Results – Q2 2017 (Lend Academy), Rated: AAA

One could almost say my returns are in a downward spiral. Since peaking in Q1 2014 at 12.44% my returns have decreased pretty much every quarter and for the last two years that decrease has averaged around 0.5% per quarter.

This past quarter my overall returns stood at 7.28% and the returns for my original six accounts were 5.07%. My worst Lending Club account was my original account there and it came in at 1.95% for the year. The only good news, if there was any, was that I did not have a negative quarter in any of my accounts this quarter unlike in Q1.

Source: Lend Academy
  1. All the account totals and interest numbers are taken from my monthly statements that I download each month.
  2. The Net Interest column is the total interest earned plus late fees and recoveries less charge-offs.
  3. The Average Rate column shows the weighted average interest rate taken directly from Lending Club or Prosper.
  4. The XIRR ROI column shows my real world return for the trailing 12 months (TTM). I believe the XIRR method is the best way for individual investors to determine their actual return.
  5. The six older accounts have been separated out to provide a level of continuity with my earlier updates.
  6. I do not take into account the impact of taxes.

Lending Club

While Lending Club shows an 8.19% return I ignore that number and do my own calculation. My TTM return here is at an all time low of 1.95% but at least I have reversed what happened in Q1 when I had a negative quarter.

Prosper

Source: Lend Academy

Direct Lending Income Fund

The Direct Lending Income Fund continues to be my most consistent performer returning solid double digit returns every quarter since I started investing back in 2013.

How Amazon’s Alexa will upend wealth management (Financial-Planning), Rated: AAA

Advisors wondering how Amazon will enter wealth management should look to its cloud computing arm, Amazon Web Services, which is pitching the natural language processing, machine-learning brain behind its voice interactive service to wirehouses, broker-dealers and robo advisors.

Already, UBS has partnered with Amazon to enable clients and non-clients of the bank to get answers to financial and economic questions through Alexa.

The Future Of Banking Investments (Modest Money), Rated: AAA

I’ve actually had this subject on my mind for awhile. In my article “Customer Experience And Retail Banking: Why Banks Need To Enter The Modern World”, I discussed a day where my district manager came to show us the ABSOLUTE IMPORTANCE OF LOBBY LEADERSHIP!!!!!!! I was rather underwhelmed by its importance, but overwhelmed by the fact that the banks were all putting such a heavy focus on greeting customers at the door and making each trip to the bank “an experience”

One of the downsides of the future of banks—and one of the things that might compel someone to avoid bank stocks—is that they are slow to change. They are loathe to change.

Other businesses are trying to please their customers. Banks are trying to please their regulators. Because customers don’t issue multi-million dollar fines on banks when they don’t get what they want.

A New Challenger Has Entered The Battle!

Businesses always have competition within their field. Banks are no exception. Banks compete with other banks to provide their services to the global market.

Except now, with fintech growing at a record pace, banks face competition from small fintech companies and major technology giants such as Google and Apple.

We’ve seen companies like Lending Club take the world of lending andinvesting by storm with their peer-to-peer lending services. LendingTree has changed the way people shopped for mortgages, and LendKey is fast becoming a leader in student loans by acting as a broker for not-for-profit lenders and providing full after-funding services. I wrote a review about LendKey here.

For non-lending companies that aren’t brought to you by the letter “L”, there’s PolicyGenius (an online life insurance broker). There’s Acorns, a “micro investment” company that takes each of your debit card purchases, rounds them up to the nearest dollar, and invests the spare change into your investment portfolio. And of course, there’s PayPal, the legendary online payments/money transfer company.

Of course, the fintech firms aren’t even the largest future competitors! Ironically, it’s non-financial technology giants that pose the greatest threat to the future of traditional banks!

Why I Think Bank Stocks Are A Great Future Investment

No, I’m bullish on banks because I think that they will adapt, in their own unique way.

Read the rest of this snarky analysis.

What Key’s fintech investments say about commercial payments (American Banker), Rated: A

Last week the Cleveland-based bank announced it had taken an equity stake in the fintech firm Billtrust, which provides digitized and automated accounts receivable capabilities for companies. The investment is one of a series the $134 billion-asset Key has made in the space in the last two years.

Other banks are also making an effort to enhance commercial payments capabilities. Wells Fargo, for example, in June announced that receipt imaging would be available for commercial card customers who use the bank’s commercial card expense reporting service, which allows them to upload and manage receipts directly on mobile devices. U.S. Bank also began offering corporate clients a virtual payments service, for employees who need to make a one-off work-related payment or who make purchases rarely enough that they don’t need a physical plastic corporate card.

Key is hoping that B-to-B payment solutions will make it stand out in the competitive landscape of commercial banking.

Making Friends with Fintech: Tips for Bankers (ABA Banking Journal), Rated: A

Time and reality have since set in, and the tone of the conversation has shifted away from “compete” toward “collaborate.” Banks increasingly see the value of capabilities developed by fintech firms, and those companies in turn are becoming better acquainted with the challenges of regulation and other barriers to bringing their products to market.

For banks, the wakeup call has been the realization that customers are coming to value—and expect—a frictionless banking experience. And if banks can’t provide that kind of frictionless experience, Henrichs says, they’ll turn to alternate solutions.

Keys to building a successful fintech strategy

1. Adopt the right cultural mindset.

First and foremost, the bank must have an appetite for innovation.

For some banks, this may involve a shift away from viewing fintech companies as simply third-party vendors or service providers, and instead as collaborators working side by side to develop something new.

2. Do something.

And size isn’t an excuse to sit back and wait, Henrichs adds. Rather, it’s about choosing an area of focus that makes sense for the bank in terms of available resources. While that may not always be a big, sexy innovation, banks can start by achieving smaller, incremental change—something as simple as building and beta testing a new email delivery system can help build up the bank’s “try and fail muscle” and help lay the groundwork for future, larger-scale projects.

3. Be forward-looking.

Consumers’ demands are shifting every day, and new products will continue to hit the market at an unrelenting pace. Knowing that, bankers must be able to keep an eye on the horizon.

Will the human-robo approach to wealth management become best practice? (WhatInvestment.co.uk), Rated: A

According to the quarterly Fiserv “Expectations & Experiences: Borrowing and Wealth Management” survey conducted in June 2016, 49 per cent of consumers are interested in receiving financial advice from a robo-advisor.

However, there are limits to a robo-only approach. That is why we are witnessing an increase in wealth management firms that incorporate both digital advice and human advice to create a hybrid model, which is likely to become best practice in the industry.

Property Partner adds student assets to portfolio (Property Week), Rated: B

Real estate crowdfunding platform Property Partner has added student accommodation assets to its portfolio for the first time due to its high returns.

Online financial websites abound with free information (Lebanon Democrat), Rated: B

Annualcreditreport.com is a free website and app which will allow you to get a free copy of your credit report every 12 months from each credit reporting company.

Nerdwallet.com is another free website and app. The site offers financial tools and objective advice to help people better understand their financial options and make the best possible financial decisions.

Mint.com is a free website and app that helps you create budgets that make sense today and set you up for success tomorrow.

Bankrate.com is a free website and app that will help you find and compare rates on financial products like mortgages, credit cards, car loans, savings accounts, certificates of deposit, checking ATM fees, home equity loans and banking fees.

United Kingdom

Funding Circle to Launch New Version of Autobid & Autosell Lending (Crowdfund Insider), Rated: AAA

On Monday, Funding Circle announced it is set to launch a new version of its existing Autobid and Autosell lending tools. Funding Circle will be eliminating the option to manually choose which businesses an investor may lend to and which loan parts to sell will be withdrawn. This is a significant shift in operation of the peer to peer lending platform as it begins to operate more like a fund.

Funding Circle created a new section on their web site dedicated to the explanation as to why they were moving away from peer to peer lending and becoming more like a fund by eliminating manual selection.

While many investors have enjoyed manually choosing loans, there are some drawbacks to it:

  • Many investors do not currently benefit from lending to all types of businesses.
  • It can mean your lending is not spread evenly across lots of businesses.
  • It can be confusing for investors.73% of new investors who join Funding Circle choose Autobid, and 80% of Funding Circle investors* say simplicity of lending is important to them.”

Regulatory spotlight on crowdfunding & P2P lenders (Moore Stephens), Rated: A

The FCA has launched a crackdown on peer-to-peer (P2P) lending, in the coming months, aiming to ensure protection for retail investors within this heavily risk-associated market.

China

Finance businesses may jeopardise credit quality of internet companies, Moody’s says (SCMP), Rated: AAA

These operations could weaken the internet companies’ credit quality, especially if their finances are consolidated on the technology companies’ accounts, Moody’s Investors Service said.

That’s because most internet companies don’t generate enough profits from operating these businesses, and they lack a track record of holding borrowers accountable for timely payments on their loans, Moody’s said.

Source: South China Morning Post

Unruly and unregulated, nation’s Internet finance sector urgently needs supervision (Global Times), Rated: A

After years of explosive but unruly growth, the online finance market requires cooling through tighter regulation.

On the contrary, there were few regulations to guide or hamper China’s Internet finance industry, with no such requirements as reserve levels or loan-to-deposit ratios. The near-absence of regulation greatly lowered the barriers to entry for the sector, which witnessed both explosive expansion and high failure and fraud rates as it grew. Take P2P lending platforms, for example. As of the end of July, 5,916 P2P lending platforms had been set up in China, but only 2,090 were operating normally, with the rest either encountering liquidity problems or simply closing, according to statistics from wangdaizhijia.com, a P2P industry portal.

Views on Yu’E Bao: easy for payment but difficult in credit! (Xing Ping She), Rated: B

Ant Financial has a big market share in the online payments industry in China. However, its ambitions go far beyond that. Recently, Ant Financial was known to get involved in the credit market.

Ant Financial seeks to merge the gap between the Yu ‘E Bao account and the general bank account through the online merchant bank. It hopes to connect the supply and demand side of the credit in its own account system, just as the bank account do.

But it won’t be easy. The biggest difference between the credit business and the payment business is that the credit business is a heavy capital business and a highly regulated licence business with a strong social spillover effect.

European Union

Sweden Cryptocurrency Boom: Top 3 Swedish Fintech Startups To Watch (IBT), Rated: AAA

The Swedish startup Klarna made waves this summer by launching its own peer-to-peer payment app called Wavy and acquiring a full banking license, which sets Klarna apart as one of the few fintech companies able to compete with traditional banks head-on. TechCrunch described it as a $2 billion startup working the  700,000 e-commerce sites. In June, Visa Inc. announced it is buying a stake in Klarna plus forming a payments partnership. Klarna is now widely considered one of the world’s most promising fintech startups.

The Stockholm Fintech Hub is less than a year old and is now reportedly home to more than 200 startups, plus representatives from a few global players like IBM and Microsoft.

There is a small but growing demand for bitcoin in Sweden. Sweden’s central bank is even considering the merits of making its own national cryptocurrency. In the meantime, Safello aims to become the “ Coinbase of Europe,” since the European bitcoin landscape is far more diverse than North America in terms of regulation and user habits. Coinbase, arguably the world’s best funded bitcoin exchange, is already available in Europe. However, Safello sets itself apart by focusing exclusively on the needs of European users, including support in nine different languages.

So far, Schuil said Safello has facilitated $10 million worth of transactions involving tens of thousands of European users.

Klarna and Safello aren’t the only Swedish startups with the potential to completely overhaul how people interact with money. Among all the startups buzzing around Stockholm, Biohax International certainly stands out. Biohax CEO Jowan Osterlund told IBT his team has implanted 3,000 microchips in people’s bodies, usually their hands, most of which happened in the past year.

These microchips can be used for purchases like train tickets and food. The Wisconsin company Three Square Market now lets employees buy office snacks with the swipe of a bio hacked hand, while also using the chip as a workplace ID for office equipment.

AltFi Data scoops equity investment, appoints advisory board (AltFi), Rated: A

The transparency agenda in online lending has taken a step forwards, as another analytics firm raises capital. AltFi Data has raised an undisclosed sum of equity funding, in tandem to forming a new advisory board.

Roger Spooner and Peter Wilson will join existing backer and executive board-member Michael Baptista on the newly established advisory board. Spooner was most recently a member of the management committee at global data firm Markit, where he was head of global client management. Following a 20 year career in private equity, Wilson was the inaugural CEO of British Business Bank Investments, where he was responsible for £1.5bn of government investment. In this role he oversaw a number of early institutional investments within the UK’s marketplace lending sector.

Funding campaign aims to establish new co-working space in Dublin (Irish Times), Rated: B

Sona 10 Newmarket, which is located next to the Teeling Whiskey Distillery, is being created in collaboration with the long-established Dublin Food Co-Op and will be hosted on its premises.

The brainchild of Adrian O’Connor, a Canadian entrepreneur who has lived and worked in the area for about a decade, Sona 10 has already raised some private funding to get the building open with some tenants already coming on board.

It is now seeking to raise an additional €25,000 via the Irish crowdfunding platform Flender to kit out the premises.

International

Real-Time Vacations: The Instant Gratification Of Fintech (Forbes), Rated: AAA

Being able to transfer money between accounts in real-time has become part of our daily lives, so much so that when these automatic services do not work, it becomes a problem.

Smartphones have become global standard: ‘conventional banking meant writing traveler’s checks and exchanging physical currency ahead of a trip, both of which are very expensive for the average consumer. Since then, new fintech providers – even in emerging markets – have dramatically increased the acceptance of foreign credit and debit cards,’ Likar said.

Vacationing in real-time is here: ‘you can now rent an apartment for same-day arrival on Airbnb or HomeAway, find last-minute dinner reservations through OpenTable, borrow a car near your location with Turo, and even book by-the-minute hotel rooms through the Recharge app.

Another aim of the fintech industry, in the same vein of the eradication of cash, is helping those that are unbanked and underbanked pay for services only available for those with credit cards. ‘Most airlines today accept payments from alternatives like PayPal. Other financial services companies, such as Affirm, offer three, six and twelve-month financing plans for customers who cannot afford to pay for the flight up front.’

WeSwap is a multi-currency card that can hold up to 18 different currencies, ensuring that consumers can lock in the exchange rate upfront rather than after the purchase,’ Likar mentioned.

International REITs: An Overlooked but Surging Asset Class (Investopedia), Rated: A

In the U.S., the real estate sector is one of the smallest groups in the S&P 500, but real estate investment trusts (REITs) are popular among income investors.

As WisdomTree points out in a recent note, a massive chunk of global real estate investments are actually found outside the U.S. (See also: Eyeing Emerging Markets REITs? See These ETFs.)

Australia

SocietyOne Celebrates Five Year Anniversary Of Helping Customers (Crowdfund Insider), Rated: AAA

Australia-based online lender SocietyOne announced on Monday it is celebrating its five-year anniversary of helping customers achieve their lending needs. This celebration comes less than two months after the lending platform surpassed $300 million in total originations. The lender revealed that more than 13,000 customers thanks to $325 million provided by its investor funders.

APAC

PawnHero bags $ 9.7m financing, partners PLDT fintech arm (Deal Street Asia), Rated: AAA

Southeast Asia’s first digital pawn shop PawnHero has closed a $9.7 million (P500 million) financing deal with a Philippine investment bank even as it signed a partnership agreement with the fintech arm of telco giant PLDT.

Middle East

Ever a lender or a borrower be… (Khaleej Times), Rated: AAA

The key to the banks’ risk taking ability is aggregation. The bank is able to get the deposits at scale and at the same time lend to a large number of customers most of which are likely to pay back. In a portfolio of loans, historically, only a small percentage is non-performing. The individual lender has so far not had the ability to create a portfolio. The start of crowdfunding a few years ago began to change that. Crowdfunding works in the area of providing returns through some level of ownership of either the product itself or the company which is promoting it. For individual investors seeking a stream of steady income on the other hand, P2P Lending or Marketplace Lending makes more sense.

However, the speed of growth of P2P lending outstrips that of traditional banking. An excellent December 2014 whitepaper, A Trillion Dollar Market By the People, For the People published by Foundation Capital, describes the blistering pace at which P2P lending grew from a base of $870 million dollars in 2012. Estimates of the size of the industry vary from between $100 billion to $200 billion. The whitepaper predicts that the market size will be about $1 trillion by 2025.

On average, P2P lending platforms like Beehive are able to reduce interest rate spreads between sourcing and lending money by about 400 basis points (4 per cent). That’s because players in this space do not keep the loans on their balance sheets.

Authors:

George Popescu
Allen Taylor

Thursday Auguest 17 2017, Daily News Digest

commercial loans

News Comments Today’s main news: Samsung to power Bank of America’s biometrics authentication pilot. FCA to overhaul mortgage applications. Aegon partners with Funding Circle. Yu’E Bao reduces upper limit. Klarna rebrands. Australian FinTech intros fintech jobs platform. Today’s main analysis: Business lending dynamics in the U.S. Today’s thought-provoking articles: SoFi Mortgage review. NAFTA talks may include discussion on fintech. Alibaba cashing in on […]

commercial loans

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

Asia

Canada

News Summary

United States

Samsung to Power Biometric Authentication Pilot for Bank of America (Finovate), Rated: AAA

Enterprise mobility and information technology company Samsung will launch a pilot program that enables Bank of America customers to log into their mobile banking app by taking a picture of their eye.

According to a report from American Banker’s Penny Crosman, half of BofA’s customers are using fingerprint authentication to log into their app, a feature the bank began offering in 2015. The other half of users login using their ID and password because they are either traditionalists, or hesitant to try the new login method for fear of a security breach.

Samsung debuted the iris recognition technology in March during its Unpackedevent. The company asserts that the technology is more secure than fingerprint scanning.

Business Lending Dynamics Across the United States (Orchard Platform), Rated: AAA

While consumer lenders still get the lion’s share of attention in the online lending universe, the reality is that there exists a great variety of non-bank fintech lenders and specialty finance companies who extend credit to businesses, and we are fortunate to work with so many of them.

Source: Orchard Platform

As we can see in the graph above, our dataset contains the most data on business in Retail, Construction, and Health Care. Next, let’s see how our data are distributed geographically. As we can see, our dominant states are California, Florida, Texas, and New York.

As we can see, construction lending seems to have the highest indexed concentration in places such as Florida, Texas, and Colorado. Lending to retailers seems to dominate the Northeast.  Healthcare lending is concentrated most highly in Florida.

Source: Orchard Platform

SOFI MORTGAGE REVIEW: ONLINE PRE-QUALIFICATION, TRADITIONAL LENDING (The College Investor), Rated: AAA

Here’s my review of SoFi Mortgage, and how they handled the process of getting pre-approved and starting the lending process. I strongly recommend everyone shopping for a mortgage compare multiple lenders. Using a service like LendingTree can make that really easy.​

SoFi Mortgage makes the process of applying for a mortgage online really easy.

After filling out the online application, we received our pre-qualification letter via email in minutes.​

The Rest Of The Process Was Not As Smooth

Sadly, we had to wait too long to get into contact with a loan officer from SoFi to proceed with them. After we submitted our information, and I uploaded all the documents, it took about 3 days before someone from SoFi reached out to even work on the pre-approval.

Source: The College Investor

Ting Reduces Customer Churn with Payment Plans (DMN News), Rated: A

Seventy-seven percent of Americans have a smartphone, according to Pew Research Center’s November 2016 data, and this figure has more than doubled since 2011.

As a result, many carriers and smartphone brands have started offering customers monthly payment options. After listening to its own customers, Ting – a mobile network and service provider with a quarter of million U.S. customers – decided to do the same and implemented financing solution Affirm.

Customers can visit Ting.com and shop for a new smartphone. Once they select their device, they’ll be asked to either sign into their existing Ting account or create a new account if they’re a new customer. The new account form asks customers to provide their name, email address, and phone number and invites them to opt in for Ting’s email and mobile notifications. They’ll also be asked to provide their address, so that Ting can verify if the brand services that area. When it comes to purchasing the device, new and existing customers can pay for the phone in full upfront via a credit card or Amazon Pay, or they can apply to pay monthly payments via Affirm. Then, customers will enter their shipping information, confirm their order, and complete the Ting portion of the checkout process.

Fifth Third Bank Enhances Its Partnership with ApplePie Capital (BusinessWire), Rated: A

The agreement enables Fifth Third to purchase loans originated through ApplePie Capital’s franchise loan marketplace, which provides franchise brands and their franchisees with a diverse range of financing options to efficiently grow their respective businesses. In addition, Fifth Third has also joined ApplePie Capital’s growing SBA lender network, and will receive referrals to SBA loan opportunities.

States developing single regulatory structure for fintech firms (American Banker), Rated: A

Faced with the prospect of a new federal fintech charter, state agencies are considering drastic new steps to streamline regulation across state lines.

FinTech Firm OppLoans Advances to #219 on Inc. Magazine’s 2017 List of 500 Fastest-Growing Companies (PR Newswire), Rated: A

OppLoans, the country’s leading socially responsible online lender, has achieved the rank of #219 on Inc. Magazine’s 2017 list of the 500 fastest-growing privately owned companies.

In the past year, OppLoans has launched major subprime borrower advocacy initiatives like OppU, a free online personal finance curriculum. The firm has also made enterprise-level technology improvements that help provide the fastest possible application and funding process for customers. Additionally, OppLoans has expanded their C-Suite with deeply experienced, innovative and highly respected industry professionals in the roles of COO, CFO, and VP of Business Development and Partnerships.

Currently rated 4.8 out of 5 stars on Google and LendingTree, OppLoans provides financial opportunity to the underbanked population, through socially responsible products and an unwavering commitment to customer service.

How to get down payment help if you don’t have rich parents (San Francisco Chronicle), Rated: A

Wannabe buyers who don’t have parents to help out have several options. They can borrow more than 80 percent of the purchase price with a first mortgage and pay private mortgage insurance. They can borrow some of the down payment with a home equity loan or line of credit.

Or they can go with a lesser-known option: giving up part of their future appreciation in exchange for down payment help from a government or private-sector program.

San Francisco’s Down Payment Assistance Program for market-rate homes is an example of government aid. First-time buyers can get up to $375,000 toward a home or condo in the city, but funds are limited and there are income restrictions. The application deadline this year is Aug. 21.

Unison, formerly known as First Rex, offers a private-sector alternative. There are no income restrictions and buyers don’t have to be first-timers, but they must live in the home, qualify for a loan and be in one of the 12 states (including California) where Unison operates.

In a typical Unison HomeBuyer deal, the buyer puts down 10 percent of the purchase price, gets 10 percent down from Unison and borrows 80 percent with a first mortgage, thereby avoiding private mortgage insurance. In exchange, Unison shares in 35 percent of any future appreciation or depreciation.

David Sacks: Cryptocurrency fulfills the ‘original vision’ we tried to build at PayPal (CNBC), Rated: A

David Sacks: After PayPal I never thought I would get interested in payments again. But bitcoin is fulfilling PayPal’s original vision to create “the new world currency.”

A payment is just a credit to one account and a debit to another. That’s a database entry. We believed that, if we could get enough people to participate, money would never need to leave the system. PayPal could become the database of money.

But cryptocurrencies like bitcoin are now fulfilling that original vision. They are doing it in a decentralized way (with a decentralized database called the blockchain) whereas PayPal tried to do it in a centralized way.

Minnesota Sues Online Lenders For Targeting Vulnerable Pensioners (CBS Local), Rated: A

Looking back in disgust, Schmelz now refers to the company as “snakes in the grass.” He’d soon learn he was charged 200 percent interest, and owed $27,000 for the full repayment, or 10 times his original principal.

He wasn’t alone. It is estimated that at least 120 Minnesota seniors and veterans have signed on with FIP and another lender: Future Income Payments, LLC, out of Delaware.

On Wednesday, Swanson held a news conference to announce that the state has filed suit against the two companies in Hennepin County District Court. The state’s lawsuit alleges that neither company is registered to do business in Minnesota, or licensed to make loans.

Finance Apps Have A Millennial Mobile Moment (Forbes), Rated: A

Last week’s tie-up between Acorns – the fastest-growing micro-investing app in the U.S. with over 2 million investment accounts – and Clarity Money, the rapidly growing personal finance app with 450,000 users founded by Adam Dell, brother of Dell Technologies CEO Michael Dell, is the latest in a raft of announcements by fintech startups determined to redefine personal finance.

Revolut, the app-based digital only bank, announced a partnership with pension manager PensionBee, allowing Millennials to combine their pensions in one plan, adding more pensions as they switch jobs. Starling Bank in the U.K. became the first in the country to partner with Transferwise, giving Starling customers direct, in-app access to TransferWise’s money transfer services. Stock trading app Robinhood, which already teamed up with StockTwits’ real-time social network for the financial and investing community, added TradeIt to its roster of partners, ensuring users can view brokerage accounts, place trades, and fund their account without exiting the experience, no matter which broker they use.

PEERSTREET REVIEW: REAL ESTATE CROWDFUNDING VIA LOANS (The College Investor), Rated: A

Even today, hard money lending is a fractured and inefficient market. PeerStreet aims to change that. PeerStreet is the first online platform that helps investors to invest in hard money loans.

A typical loan on PeerStreet has a maturity around one year. Over the course of the last several years, PeerStreet’s entire portfolio of loans has earned 7-12% annually after the investment fees (of up to 1%).

PeerStreet also encourages investors to maintain a diverse portfolio of loans. With a $1,000 per loan minimum, most investors can diversify into a nationwide marketplace without too much difficulty. In fact, PeerStreet even makes it easy to invest automatically. Investors just input investment settings, and PeerStreet matches them with loan investment opportunities.

Finally, all loans on PeerStreet are backed by a hard asset (real estate), and the loans typically have a great loan-to-value ratio. In general, investors will find LTVs between 60-70% of the property’s value. The max LTV on the PeerStreet platform is 75%. Most people would call this a low risk loan.

Worst Parts Of PeerStreet

First, to invest on PeerStreet, you need to be an accredited investor.

Another drawback to PeerStreet is that it’s hard for an outsider to estimate risk. Real estate is highly cyclical. We’re in an expansionary real estate market. That means that default risk on real estate loans is low right now. However, at some point in the future, borrowers will start to default on the PeerStreet loans. Investors have no expectations for how much they can recoup when a deal goes belly-up.

It’s my opinion that PeerStreet oversells the safety of their investments.

Finally, PeerStreet is an expensive platform. PeerStreet charges a servicing fee of 0.25-1% on every loan that you invest in. That means that if your loan yields 10%, you’ll receive a 9% interest rate.

Source: The College Investor

What College Students Taught Us About Predicting Future Tech Trends (CB Insights), Rated: A

The CB Insights research team welcomed three interns this summer – Kristen Tilley, Jimmy Xue, and Alyce Ge  – who used the CB Insights platform to uncover and analyze early-stage trends in hot sectors.


Emerging Technology Trends: 2017 Intern Presentation from CB Insights

United Kingdom

FCA in talks to overhaul mortgage applications (FT Adviser), Rated: AAA

The founder of online mortgage broker Trussle is in talks with the regulator about creating an industry standard for mortgage documents.

Ishaan Mahli, who founded the online broker in 2015, believes standardisation would lead to greater efficiency during the application process and better outcomes for the borrower, while eliminating biases towards lenders with a more simple process.

The plan would involve standardising the amount of time for which documents are required for certain cases – for example, three months’ payslips – as well as the document format.

It could also involve harnessing Open Banking technology – an online communication standard that will enable the secure sharing of customer information with third parties such as lenders.

Aegon gives leg up to UK small businesses through online lending platform (Aegon), Rated: AAA

Aegon has entered a strategic partnership with online lending platform, Funding Circle. In the first year, the move will provide a cash boost for 2,600 small- and medium-sized companies, and create a potential 6,400 UK jobs.

The four-year strategic cooperation between Aegon and Funding Circle(external link) marks the first time that a Dutch financial service provider of its scale will provide direct loans to small businesses online.

Nesta Promotes Cross Border Equity Crowdfunding Alliance with China (Crowdfund Insider), Rated: A

China is the largest internet finance market in the world estimated at over $100 billion for 2015. Their peer to peer lending sector is absolutely enormous while equity crowdfunding is relatively small at around $829 million in 2015.

Nesta, the UK based non-profit foundation that focuses on innovation, believes the UK should work towards creating a cross border equity crowdfunding alliance with China.

Nesta outlines recommendations for the two countries to cooperate more closely when it comes to crowdfunding:

  • Create a China-UK equity crowdfunding alliance – Boost communication between the two countries to compare best practices. Perhaps the UK Crowdfunding Association and the National Internet Finance Association could become the first bridge.
  • Regulatory Knowledge Sharing – Some of this has already occurred but knowledge sharing between the two countries when it comes to rules guiding internet finance is mutually beneficial.
  • Foster a data framework and establish standards – Having good data is a catalyst for transparency. Nesta believes this could be a first step in a global initiative.
  • Government Backed Pilot programs – Have UK issuers raise money in the UK and vice versa. Why not? As long as the diligence is there and the structure is approved Nesta sees this as part of a “China-UK Fintech Bridge.”

Juniper Research: Top 10 Disruptive Technologies in Fintech 2017 (BusinessWire), Rated: A

Juniper’s Top 3 Disruptive Technologies:

  1. PSD2 (Payment Services Directive 2) & Open APIs (Application Programming Interfaces)
  2. Regtech
  3. Chatbots

Elevate’s UK Loan Product Sunny Named 2017 ‘Treating Customers Fairly Champion’ (BusinessWire), Rated: A

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, announced its UK loan product, Sunny was recently crowned the “Treating Customers Fairly Champion 2017” at the 2017 Consumer Credit Awards in Mayfair, London.

Run by Smart Money People, the Consumer Credit Awards are the largest consumer-voted awards program in the UK consumer credit industry. More than 1,400 Sunny customers showed their appreciation of Sunny’s customer-centric approach by voting.

Will new regulation drive fintech M&As? (Insurance Business Mag), Rated: A

Earlier this month we told you how much is being invested in financial technology in the UK. Now a new report says big names in technology could be snatching up fintech start-ups in a possible buying binge during 2018.

A report by CNBC cited Daniel Döderlein, chief executive of Norwegian fintech start-up Auka, who believes the likes of IBM and Capgemini would likely be interested in mergers and acquisitions amid a surge in fintechs.

China

The upper limit on Yu’E Bao account exists in name only ! (Xing Ping She), Rated: AAA

On 14th August, the capital limit on Yu’E Bao individual account was reduced from $37,450 to $14,980. However, the limitation was found useless!There are two methods to bypass the capital limitation.

Firstly, you can buy monetary funds in the ant wealth, choosing the payment of bank cards. The money will automatically return to the Yu’E Bao account after redemption, no matter if the limitation has been reached or not.

Secondly, you can immediately cancel the transaction after buying a product such as a money fund. In this case, the money would not return to the bank card, but going to the Yu’E Bao account.

China’s global distribution of financial technology and then upgrade: Jiu Fu Group released international strategy (GMW.cn), Rated: A

August 16, “Jiu from this rich global” Jiufu international strategy release and Jiufu Ben Ben APP conference held in Shenzhen, in addition to the official release of Hong Kong, US stocks and other global market intelligence investment APP Jiufu Ben Ben, the conference also announced The future of Jiufu international strategy: Jiu Fu in the United States Silicon Valley investment in the chain chain company Wyre, and will set up AI laboratories; Southeast Asia, has conducted a thorough investigation, will be set up in Singapore, Southeast Asia headquarters. Combined with Hong Kong more than 30 years of Jiufu Securities, in order to form the United States Silicon Valley, Southeast Asia, Hong Kong “Trinity” overseas financial services system.

European Union

Klarna just unveiled a quirky new look and logo – designed to catch millennials’ attention (Business Insider), Rated: AAA

Now the company has unveiled an entirely new look to go along with the pivot towards B2C customers – complete with jelly cakes, afghan dogs and smashed ice cream cones.

The new look aims to convey the feeling of ‘smoooth’ payments (worthy of three o’s).

Klarna’s new logo.
International

NAFTA talks must include discussion on fintech: Mexican negotiator (Reuters), Rated: AAA

Talks to renegotiate the North American Free Trade Agreement (NAFTA) must include a discussion of new financial services, a Mexican negotiator said on Wednesday, singling out so-called fintech companies rapidly gaining ground in the region.

Talks to renegotiate the North American Free Trade Agreement (NAFTA) must include a discussion of new financial services, a Mexican negotiator said on Wednesday, singling out so-called fintech companies rapidly gaining ground in the region.

Euler Hermes Americas launches Surety in the U.S., Canada, Brazil (4-traders), Rated: A

Locally in the U.S., Canada and Brazil, Euler Hermes will partner with specialized surety agents and brokers and will focus on contract and commercial surety. Contract surety bonds are a common requirement in the construction industry, where Euler Hermes offers bid, payment, performance, supply and maintenance bonds for mid to large contractors, while commercial surety bonds may be required by local and state law to comply with state or federal regulations.

The Race Is On To Disrupt Traditional Banking (Forbes), Rated: A

Global fintech adoption has risen on average from 16% in 2015 to 33% in 2017.

Credit Suisse, for example, is well respected within the IT sector for being ahead of the curve in implementing digital transformation. The bank had started its revamp process out of Asia Pacific. According to Marco Abele, Credit Suisse’s digital transformation expert, the bank converted an old data center in Singapore into an innovation hub.

Citigroup, Banco Santander, and Goldman Sachs have completed some deals into fintech start-ups over the last five quarters. Another example would be BNP Paribas. The bank is planning to double the investment in technology over the next three years to adapt to changing consumer behavior and cut costs.

According to PWC almost 50% of financial services firms around the world plan to acquire fintech start-ups in the three to five years. BNP Paribas recently agreed to buy French digital bank Compte-Nickel for 200 million euros ($213 million), which was the biggest fintech acquisition ever in France according to a Bloomberg news report.

Australia/New Zealand

Australian FinTech opens fintech jobs platform (Finextra), Rated: AAA

The team behind the highly successful Australian FinTech website have soft-launched their FinTech employment marketplace platform, Australian FinTech Jobs.

AustralianFinTechJobs.com.au is Australia’s only dedicated platform for FinTech companies and Recruiters to promote FinTech, financial technology, financial services, banking, legal and IT employment opportunities in Australia.

Aussie small business lending platform secures AU$ 5million in Series-A funding (BizEdge), Rated: A

TruePillars, an online marketplace lender allowing everyday Australians to fund loans to small businesses, today announced it has raised a total of AU$5 million in a Series-A funding round.

The funding round was led by a long-term Melbourne-based private investor and includes both equity and commitments by shareholders to fund loans to Australian businesses on the TruePillars platform.

Asia

Alibaba to cash in on Japan’s nascent e-payment market (Asian Review), Rated: AAA

China’s e-commerce leader Alibaba Group Holding will bring a version of its hit smartphone-based payment platform to Japan as early as next spring, hoping the simple technology will convince many cash-reliant shoppers here to go digital.

The Japanese unit of Ant Financial Services Group, the internet giant’s financial arm, will offer a version of the Alipay digital payment system tailored for the Japanese market under a new brand. Shoppers will be able to load money into or link a bank account with a dedicated app on their smartphone, and scan QR codes issued by merchants to make a payment. Merchants can also scan codes displayed on a user’s phone to the same effect.

Canada

CIBC Scraps President’s Choice Partnership in Online Shift (Bloomberg), Rated: AAA

Canadian Imperial Bank of Commerce and grocery chain Loblaw Cos. are ending their 19-year President’s Choice Financial partnership as the country’s fifth-largest lender starts its own digital bank.

Simplii Financial will offer no-fee banking, mortgages and loans online and by phone, according to Mike Boluch, CIBC’s executive vice president of direct banking, innovation and payments. CIBC expects to take C$100 million ($78.4 million) of fees and charges before tax in the quarter ending Oct. 31 related to the transaction, the Toronto-based bank said Wednesday in a statement.

SelectCore Signs Licensing Agreement For Peer to Peer Lending With the Option to Purchase Source Code (GlobeNewswire), Rated: A

SelectCore will be rebranded as Fintech Select in an effort to continue expanding its financial payment services to its customers. The Company is pleased to confirm that it has signed an Agreement to license software as a service (SAAS) to enable peer-to-peer lending, including the option to outright purchase the source code.

Besides micro loans, the Company is also exploring other loan offerings that can be interconnected into the P2P platform from institutional entities and or private individuals. Our pre-paid card program will play a critical role within this new P2P platform, as it will allow borrowers to receive funds directly to their cards and/or mobile wallets.

Authors:

George Popescu
Allen Taylor