- Today’s main news: Lending Club increases minimum investment to open account. Consumers pay off unsecured personal loans first. American Households Return To Peak Debt, Thanks To Booming Student Loans. RateSetter sells off bad debts.
- Today’s main analysis: The fast lane to better small business funding.
- Today’s thought-provoking articles: Consumers pay off unsecured personal loans first. American Households Return To Peak Debt, Thanks To Booming Student Loans.
- Lending Club increases minimum investment to open account. GP:”I am very surprised by this increase. Many people want to test the waters with $100 , or $200. $25 was surprisingly low but I wonder what is the cost of an account to Lending Club. It should be minimal IT costs. $1000 will probably prevent some people from testing the waters. I do not understand this move. “AT: “This is likely a move to increase stockholder profits. As companies mature, a shift in thinking occurs from attracting new customers and acquiring new accounts to increasing profits and making shareholders happy. This is a natural outgrowth of the company’s success in growing itself into maturity.”
- American Households Return To Peak Debt, Thanks To Booming Student Loans GP:”Very interesting data and trend. A must read and check the charts.”
- The fast lane of better small business funding. GP:”Online lending is on average easier and faster. “AT: “This is an interesting infographic from Lendio that pits marketplace lenders against banks and other traditional lenders.”
- Consumers pay off unsecured personal loans first. GP:”This is again very surprising. A must read as well. Completely counter intuitive and very important for the industry. ” AT: “Very interesting report from TransUnion with a comparison of delinquency rates between personal, auto, credit card, and mortgage loans. A must-read.”
- Why millennials are interested in real estate investing. AT: “Millennials view the stock market and banks with a raised eyebrow. Real estate they can touch. But intangibles? Not with a 10-foot pole. Who can blame them?”
- Juvo appoints Ron Suber as strategic advisor. GP:”Ron receives probably daily requests to become strategic advisor. The fact that he accepted this position puts Juvo in the spotlight for sure.”
- LendingHome hires new CFO, receives Fannie Mae approval. GP:”Congratulations on the Fannie Mae, that’s the cheapest capital you can find. Not all mortgages will be sellable to Fannie Mae but this allows LendingHome to increase origination volumes in standard single family morgages tremendously by leveraging their technology unlike the usual paper bank process. “
- Is Vision 2020 the answer to the OCC Fintech Charter? AT: “Fintech regulation is where Democrats and Republicans can learn to compromise.”
- Fintech lawyers on Vision 2020.
- LendUp, Beneficial State Bank expand partnership. GP:”The take away: a new bank is partnering with fintechs.”
- Addepar to buy AltX.
- Ascentium Capital surpasses $3B in origination volume. AT: “Congratulations.”
- Milwaukee fintech firms aim to help consumers. AT: “I’m seeing more and more news related to local crowdfunding and fintech companies. Evidence that fintech is going mainstream.”
- Redpoint Capital Group names Alex Dunev as managing partner.
- DiversyFund brings new innovations to RECF.
- RateSetter sells of bad debt. AT: “This is a first in the UK. Could this spark a secondary market industry for P2P debt?”
- Landbay intros retention fee for intermediaries.
- Investing in the UK’s growth.
- Notion Capital announces $80M startup fund.
- Why Ford cars are a good alternative investment vehicle.
- Alibaba invests in first fintech in Hong Kong.
- Dianrong announces next tech agreement outside China.
- QuantGroup considers U.S. IPO.
- Regulating online crowdfunding, lending platforms.
- additiv gets $21.3M new capital.
- Lendity: ideal MPL exposure for pension funds, asset managers, family offices, private banks.
- The influence of technology on the future of finance.
- Retirees are riskier investors than millennials. AT: “I’d like to see a similar study in the U.S.”
- NAB’s fintech arm brings robo-advice to home loans.
- United States
- Lending Club Increases Minimum Investment to Open an Account to $1,000 (Lend Academy), Rated: AAA
- American Households Return To Peak Debt, Thanks To Booming Student Loans, (Buzz Feed), Rated: AAA
- The Fast Lane to Better Small Business Funding (Lendio Email), Rated: AAA
- Consumers Place Personal Loans Atop the Credit Mountain (GlobeNewswire), Rated: AAA
- Why Millennials Are Interested In Real Estate Investing (Forbes), Rated: AAA
- Juvo Appoints Financial Services Expert Ron Suber As Strategic Advisor (Juvo Email), Rated: A
- LendingHome Hires New CFO. Receives Fannie Mae Approval to Expand Home Loans (Crowdfund Insider), Rated: A
- Is the CSBS Vision 2020 the Answer to the OCC Fintech Charter? (Crowdfund Insider), Rated: A
- Fintech Lawyers on State Regulators’ Possible Alternative to OCC Charter Plan (Corporate Counsel), Rated: A
- LendUp And Beneficial State Bank Announce Major Expansion Of Credit Card Partnership (PR Newswire), Rated: A
- Addepar To Buy Alternatives Data Provider AltX (Financial Advisor), Rated: A
- Ascentium Capital Surpasses $ 3.0 Billion in Origination Volume (Ascentium), Rated: A
- Milwaukee FinTech firms aim to help consumers (Biz Times), Rated: A
- Redpoint Capital Group Names Alex Dunev as Managing Partner (BusinessWire), Rated: B
- DiversyFund, Inc. Brings New Innovations to Real Estate Crowdfunding (Digital Journal), Rated: B
- United Kingdom
- P2P Lender Sells Off Bad Debts Worth £2.1 Million (iExpats), Rated: AAA
- Landbay introduces retention fee for intermediaries (P2P Finance News), Rated: AAA
- Investing in the UK’s growth when it needs it most (FT Adviser), Rated: A
- London-based VC Notion Capital has announced a new $ 80 million startup fund (Business Insider), Rated: A
- Ford: Wine, watches and cars: the rise of alternative investing (Automotive World), Rated: B
- Alibaba Invests In Its First Fintech Company In Hong Kong (Crowdfund Insider), Rated: AAA
- Dianrong Announces Next Technology Agreement Outside Mainland China (Military-Technologies), Rated: AAA
- Chinese Celebrity-Backed Fintech Firm QuantGroup Considering US IPO (Crowfund Insider), Rated: A
- LCQ5: Regulation of online crowdfunding and lending platforms (7th Space), Rated: B
- European Union
- Older Swiss fintech additiv gets $ 21.3 million in new capital (CNBC), Rated: AAA
- Lendity: ideal marketplace lending exposure for pension funds, asset managers, family offices, private banks (Daily Fintech), Rated: A
- FinTech: the influence of technology on the future of the financial sector (Lexology), Rated: A
- Retirees are riskier investors than millennials, says ASX report (Financial Review), Rated: AAA
- NAB’s fintech arm brings robo-advice to home loans (AltFi), Rated: A
- Robo advisors: Stay relaxed while getting accurate financial advice (DNA), Rated: A
- Middle East
- Abu Dhabi Global Market admits first five fintech start-ups into its Reglab sandbox (CNBC), Rated: B
Lending Club Increases Minimum Investment to Open an Account to ,000 (Lend Academy), Rated: AAA
Until today new investors at Lending Club could open an account with as little as $25. This has now changed. Going forward to open a new account at Lending Club you must deposit $1,000. The $25 minimum investment per loan still applies but you will no longer be able to start an account with less than $1,000.
The reason for this move can be explained in one word: diversification. We have written manytimes before about the importance of diversification and Lending Club has a page on their site dedicated to this topic. With $1,000 investors will be able to invest in 40 notes; while that is still not very diversified it is a lot better than investing in, say, four notes when someone starts with $100.
American Households Return To Peak Debt, Thanks To Booming Student Loans, (Buzz Feed), Rated: AAA
American households are back at peak debt, with new data showing the highest level of household debt since 2008.
Americans now sit on a $12.73 trillion pile of household debt, meaning mortgages, loans, credit cards, home equity lines of credit, car loans, and student debt. That figure previously peaked at $12.68 trillion in the early days of the Great Recession.
Those numbers aren’t adjusted for inflation, and $12.68 trillion 2008 dollars would be equal to more than $14.5 trillion today. And while debt number is at it’s highest ever, the economy has grown significantly in the last nine years, meaning that as a percentage of the total economy, it’s still well below its 2008 high.
“Almost nine years later, household debt has finally exceeded its 2008 peak but the debt and its borrowers look quite different today,” said Donghoon Lee, a Research Officer at the New York Fed. “This record debt level is neither a reason to celebrate nor a cause for alarm.”
The makeup of American household debt has changed in a big way. Back in 2008, people held $10 trillion in housing debt; that has fallen to $9.1 trillion today. In its place, student loan debt has boomed, and car loan and credit card debt also rose.
Home loans have become harder to come by for middle- and low-income buyers in the decade since the housing crisis began. And as the recession kicked into high gear and unemployment spiked, people poured into colleges in huge numbers, looking to weather the storm. That led to a boom in the for-profit college industry — and a soaring national student debt pile.
When household debt peaked in 2008, Americans had $610 billion in student loan debt, about 5% percent of all consumer debt and 23% percent of all non-housing debt. Today, student debt balances have more than doubled to $1.3 trillion, 11% of all consumer debt and 37% of all non-housing debt.
But people are now defaulting on those student loans at at a higher rate than any other form of debt. 11% of all student debt is now more than 90 days overdue, compared to 7.5% for credit cards and 3.8% for home loans.
“The standout, however, has been student loans—with new serious delinquency flows that deteriorated steadily between 2004 and 2014 and have remained stubbornly high since then,” the Fed researchers said.
The Fast Lane to Better Small Business Funding (Lendio Email), Rated: AAA
Consumers Place Personal Loans Atop the Credit Mountain (GlobeNewswire), Rated: AAA
When faced with the choice of which debts to pay and which to miss, consumers in financial distress tend to prioritize unsecured personal loans ahead of other credit products such as auto loans, mortgages and credit cards. These findings were released today during TransUnion’s annual Financial Services Summit, attended by more than 300 senior-level financial services executives from around the globe.
The most recent study incorporates unsecured personal loans for the first time since TransUnion began analyzing the payment hierarchy dynamic in 2010. Beyond personal loans, this most recent analysis is consistent with prior TransUnion studies in finding that consumers have historically prioritized auto loans over their mortgages and credit cards, and have done so consistently since at least the beginning of 2004.
|Personal Loan Delinquencies* Consistently Remain Lower Than Other Loan Types|
|Delinquency* Rates for Consumers Possessing|
Auto Loans, Credit Cards, Mortgage Loans and Unsecured Personal Loans
|Year||Personal Loan||Auto Loan||Mortgage||Credit Card|
*Delinquency rates after 12 months for consumers who possess and are current on all four credit products at the beginning of the respective performance measurement period.
Recent TransUnion data show that average term lengths are much shorter for unsecured personal loans. For loans originated in Q4 2016, unsecured personal loans had an average term of 28 months. In this same timeframe, the length of auto loans averaged 60 months and mortgages averaged 230 months.
Why Millennials Are Interested In Real Estate Investing (Forbes), Rated: AAA
RealtyShares recently teamed up with Harris Interactive to put out the Real Estate Investing Report, surveying Americans on their investment preferences. And according to the survey results, 55 percent of millennials are interested in investing in real estate, the highest percentage of all demographics questioned. Research from Fannie Mae supports these findings, reporting that 85 percent of millennials think real estate is a good investment.
According to a recent Pew report, there are 75.4 million millennials compared with 74.9 million baby boomers.
In the RealtyShares survey results, 20 percent of millennials indicated they believe real estate has performed the best since 2000. In fact, millennials were the age group with the largest percentage with that belief. The next highest group to believe real estate outperformed the stock market since 2000 is comprised primarily of Generation X (ages 35–44), 16 percent of whom chose real estate as the top performer.
Millennials, ever-vigilant on the internet, are paying heed to online financial experts. One of these experts especially popular among millennials is personal finance blogger Financial Samurai, who recently shared his preference for investing in real estate over the stock market.
While the large down payment needed to invest in real estate is the biggest reason millennials aren’t buying real estate, thanks to online real estate investing platforms, millennials can now invest in real estate without saving tens of thousands of dollars for a down payment.
Juvo Appoints Financial Services Expert Ron Suber As Strategic Advisor (Juvo Email), Rated: A
Juvo, a pioneer in mobile Identity Scoring, today announced the appointment of Ron Suber, president of Prosper Marketplace, as strategic advisor to the company. An investor in Juvo, Suber is a prolific presence in fintech and is well known as an industry influencer around the world. In his advisor role at Juvo, he will help direct the company through its global growth, ongoing product development and expansion into new markets.
Ron’s appointment helps round out the Juvo advisory team, which includes:
- Nils Puhlmann, leads Juvo’s security and privacy efforts: former Chief Security Officer & co-founder of Cloud Security Alliance
- Vicente Silveira, fraud and risk management advisor: head of fraud data science at Uber
- Allison Duncan, social impact advisor: founder and CEO of Amplifier Strategies
- Ken Laversin, enterprise software/SaaS advisor: senior vice president, worldwide sales at Jasper
- Monica Rogati, data science advisor: equity partner at Data Collective, former VP of data at Jawbone and LinkedIn data scientist
LendingHome Hires New CFO. Receives Fannie Mae Approval to Expand Home Loans (Crowdfund Insider), Rated: A
LendingHome says it is ready to ratchet up platform growth. The marketplace lending platform that finances residential mortgages has made two announcements today.
First, the online lender has announced that former Nationstar Mortgage CFO, Robert Stiles, has been appointed to become LendingHome’s CFO.
Simultaneously, LendingHome has been approved by Fannie Mae as a seller and servicer provider which will enable LendingHome to expand its consumer home financing business, a bit of a big deal.
By working directly with Fannie Mae, LendingHome may streamline operations and offer better loan pricing to its customers.
Is the CSBS Vision 2020 the Answer to the OCC Fintech Charter? (Crowdfund Insider), Rated: A
Earlier this week, the Conference on State Bank Supervisors (CSBS) announced their “Vision 2020” initiative.
The CSBS outlined their initial objectives:
- Redesign the Nationwide Multistate Licensing System (NMLS). CSBS has launched a technology effort that redesigns and expands NMLS, the common platform for state non-bank regulation. The redesign will use data and analytics to provide a more automated licensing process for new applicants, streamline multi-state regulation, and shift state resources to higher-risk cases. State regulators also will ensure transparency through NMLS Consumer Access, which was viewed 3.7 million times last year.
- Harmonize multi-state supervision. CSBS has created working groups to establish model approaches to key aspects of non-bank supervision. The groups will work to enhance uniformity in examinations, facilitate best practices, and capture and report non-bank violations at the national level. To further streamline the process, CSBS will create a common technology platform for state examinations.
- Form an industry advisory panel. CSBS will establish a fintech industry advisory panel to identify points of friction in licensing and multi-state regulation, and provide feedback to state efforts to modernize regulatory regimes. The panel will focus on lending and money transmission, and discuss a wide range of solutions. Individual state regulators already have been engaging the fintech industry in formal dialogue.
- Assist state banking departments. CSBS education programs will make state departments more effective in supervising banks and non-banks. Updated standards and analytics will help states determine where new expertise is most needed, identify and address weaknesses, update supervisory processes, and compare themselves to and learn from other state departments. These higher standards will be validated through an enhanced CSBS accreditation program.
- Make it easier for banks to provide services to non-banks. CSBS is stepping up efforts to address de-risking – where banks are cautious about doing business with non-banks, due to regulatory uncertainty – by increasing industry awareness that strong regulatory regimes exist for compliance with laws for money laundering, the Bank Secrecy Act, and cybersecurity.
- Make supervision more efficient for third parties. Banks of all sizes work with a variety of third-party service providers, including fintech companies. CSBS supports federal legislation that would allow state and federal regulators to better coordinate supervision of bank third-party service providers.
Fintech Lawyers on State Regulators’ Possible Alternative to OCC Charter Plan (Corporate Counsel), Rated: A
Lawyers who work for and with fintechs are encouraged that the state regulators at the CSBS are at least thinking about changes to the system that they believe would modernize state regulations of nonbanks or help centralize regulation among the states.
The state banking regulators’ plan for nonbanks such as fintechs outlines six ways in which it seeks to provide “a regulatory system that makes supervision more efficient and recognizes standards across state lines” by 2020, according to a press release.
Initial actions will include: redesigning the Nationwide Multistate Licensing System, harmonizing multistate supervision, forming an industry advisory panel, assisting state banking departments, making it easier for banks to provide services to nonbanks and making supervision more efficient for third parties, according to the association.
LendUp And Beneficial State Bank Announce Major Expansion Of Credit Card Partnership (PR Newswire), Rated: A
LendUp, a socially responsible lender for the emerging middle class, and Beneficial State Bank (Beneficial State), a social enterprise bank, today announced a significant expansion of the L Card, its credit card joint venture. The move is expected to quadruple the availability of L Cards, a Visa credit card product designed by LendUp and issued by Beneficial State for consumers traditionally shut out of mainstream banking due to poor credit scores or damaged credit files. The expansion builds on the firms’ partnership that extends back to the L Card pilot in April 2015.
According to the Credit Builders Alliance, a person with subprime credit pays on average $250,000 more in interest than borrowers with good credit over the course of their lifetime — and that doesn’t even include fees on financial products. In addition, according to LendUp research, many of its own customers are currently shut out of mainstream credit card products, such as rewards credit cards (98.5%) and retail rewards cards (66.5%).
In response, LendUp created a card for Beneficial State that meets borrowers’ immediate credit needs while helping to build their long term financial health. Features include:
- Instant decisions
- No over-the-limit fees or security deposits
- Reporting to the three main credit bureaus
- Affordable payments
The L Card carries an annual fee of $0–$60 and APR ranging from 19.99% to 29.99%; it has a 4.8 average star review on CreditKarma.
Addepar To Buy Alternatives Data Provider AltX (Financial Advisor), Rated: A
Mountainview, Calif.-based Addepar announced on Thursday that it is purchasing AltX, an alternatives market intelligence platform.
Addepar hopes that the acquisition will boost it’s capabilities around alternative investing by enabling advisors to make better-informed decisions, said Eric Poirier, Addepar CEO, in a statement released on Thursday.
AltX’s platform uses machine learning to gather intelligence on alternative investments, incorporating reference data, public filings and news into a database of performance, holdings and key reference data for more than 17,000 funds.
Ascentium Capital Surpasses $ 3.0 Billion in Origination Volume (Ascentium), Rated: A
Ascentium Capital LLC, the top private independent finance company in the United States by new business volume, announced surpassing $3 billion in origination volume since the Company’s inception in August 2011.
Milwaukee FinTech firms aim to help consumers (Biz Times), Rated: A
The pace of FinTech disruption is increasing in the financial industry, with about $22 billion raised by FinTech startups over the past five years, Schedler said.
Northwestern Mutual has invested in two key early FinTech leaders, Betterment and Learnvest. And with its Future Ventures program, it plans to invest $50 million in series A and series B funding rounds over the next five to six years to bring in more partnership opportunities.
Bank My Biz has 13 bank partners in Wisconsin and many more across the country, he said. So if one of those banks isn’t able to extend an equipment or working capital loan of less than $100,000 to a small business, Bank My Biz may be able to do so with its financial partner, Brookfield-based national direct lender Advantage+.
Banks earn income off the term loan and Bank My Biz earns its revenue through the interest rate spread. It charges interest rates of between 9 and 13 percent.
Looking Glass buys marketplace loans on lending sites Funding Circle, LendingClub, Peerform and Prosper. Using its custom predictive analytics software, LGI evaluates and underwrites loans it has determined are unlikely to default. The alternative investment model promises investors a less volatile environment than the equity markets.
It also runs LoansOfTheDay.com, which uses big data, predictive analytics, artificial intelligence and machine learning to distribute risk and optimize returns on peer-to-peer lending sites. LGI contributes a minimum of $25 to each loan on the site.
And its newest product is LendSight, a SaaS underwriting tool banks can use to improve their profit margins by doing predictive underwriting, while allowing Looking Glass to capture more market share, Siefkes said.
Redpoint Capital Group Names Alex Dunev as Managing Partner (BusinessWire), Rated: B
Redpoint Capital Group, LLC (“Redpoint”), an alternative investment company focused on providing financing solutions to companies in the Specialty Finance and FinTech sectors, announced today that it has added Alex Dunev as a Managing Partner. Alex will be responsible for driving Redpoint’s strategic priorities, including sourcing new investment opportunities and raising capital to deploy into Redpoint’s investment strategies. Alex will also manage Redpoint’s office in Westport, Connecticut.
Alex was previously a Managing Director in the Investment Banking Division at UBS, leading the bank’s Specialty Finance efforts in the Americas. Prior to UBS Alex also covered Specialty Finance companies at Morgan Stanley and Credit Suisse.
DiversyFund, Inc. Brings New Innovations to Real Estate Crowdfunding (Digital Journal), Rated: B
Mr. Cecilio and Mr. Lewis formed DiversyFund, Inc. to create the industry’s first online crowdfunding real estate platform where the company acts as the real estate developer on all of its investment offerings in order to deliver to its investors better quality control and more detailed and robust investor reporting, including monthly construction updates on each real estate project with pictures of all work in progress.
Because DiversyFund, Inc. acts as the developer and receives a developer fee that is paid at the project level, DiversyFund does not charge any platform fees, servicing fees or other sales commissions to its investors, enabling investors to keep 100% of their investment returns.
Additionally, DiversyFund, Inc. is the only crowdfunding real estate site that focuses exclusively on strong-performing Southern California real estate markets.
P2P Lender Sells Off Bad Debts Worth £2.1 Million (iExpats), Rated: AAA
A British peer-to-peer lender has become the first platform to sell non-performing debt.
RateSetter has completed a deal with undisclosed terms to 1st Credit, a debt purchasing company.
The lender says the loans were taken out between 2010 and 2015 and that the company felt borrowers were unlikely to settle the debt.
RateSetter has a £22.23 million provision fund to cover bad debts and expects to pay out £18.78 million compensation to investors.
Landbay introduces retention fee for intermediaries (P2P Finance News), Rated: AAA
LANDBAY has announced that its intermediaries will now receive a retention fee for all customer renewals.
The peer-to-peer lender, which specialises in buy-to-let mortgages, said that it introduced the 0.3 per cent fee because of its ongoing recognition of the role of intermediaries in offering advice in the retention process of customers.
Investing in the UK’s growth when it needs it most (FT Adviser), Rated: A
The notoriety and growth of crowd funding, and its variations, has gathered a great deal of attention. For good and bad. Only last year, Lord Turner warned: “The losses which will emerge from peer-to-peer lending over the next five to 10 years will make the bankers look like lending geniuses.”
While investing in VCTs has its risks, just as any investment has, these risks are for more measured and disciplined with quality offerings. Many quality VCT providers have more recently felt lumped in the same bucket as the under fire feel peer to peer (P2P) lenders and equity crowdfunders (ECFs) both of which now the subject of a clampdown by the FCA.
Despite some of the misconceptions, VCTs raised £458m in the 2015-16 tax year, making it the third highest year for VCT investment since records began in 1995. In the tax year that has just closed, most but not all were fully funded by the end of 2016-2017.
VCTs invest in small, largely unquoted, companies in the UK of up to £15m in size.
London-based VC Notion Capital has announced a new $ 80 million startup fund (Business Insider), Rated: A
Notion Capital, a London-based venture capital firm that backs startups across Europe, has announced a new $80 million (£60 million) startup fund that will be used to back later stage companies.
The VC, which focuses on backing enterprise software and cloud companies, also announced on Tuesday the final closing of a $140 million (£107 million) venture fund to back early stage startups.
Ford: Wine, watches and cars: the rise of alternative investing (Automotive World), Rated: B
As savvy investors champion alternative commodities such as wine and watches, classic Fords have proved themselves another sound investment.
For those who think there’s no money to be made from cars, think again – total growth over the past decade was 457 per cent***. This is a bigger increase than even property, which has increased in value on average 20 per cent in the last decade and 152 per cent since 2000 across Europe*****. And it’s not just new super cars such as the latest Ford GT newly on sale in excess of $450,000 that command a hefty price tag and appreciate rapidly. Among the list of top investor car makes, Ford offers among the lowest entry costs.
In March 2016, a Ford Escort Cosworth with less than 2,500 miles on the clock sold at auction for £67,580 after originally going on sale at £22,050 in 1992. The average price of a Cosworth is now more than double that original price and the Fiesta XR2 which went on sale in 1981 for £5,150, has trebled in value since 2014 to prices well in excess of £10,000, with the best advertised at close to £20,000.******
Alibaba Invests In Its First Fintech Company In Hong Kong (Crowdfund Insider), Rated: AAA
As reported by Forbes today, Alibaba has invested in online invoice exchange marketplace Qupital, marking the Chinese e-commerce giant’s first foray into fintech investment in Hong Kong. Qupital raised a total of $2 million in its seed round.
Qupital bills itself as Hong Kong’s first and largest online invoice discounting exchange. The company aims to solve the problem of companies not having quick access to cash by allowing them to raise funds on the site through the auctioning off of unpaid invoices, essentially securitizing their accounts receivable.
Dianrong Announces Next Technology Agreement Outside Mainland China (Military-Technologies), Rated: AAA
Dianrong today announced a new technology agreement with Maggie Ng, a leading consumer banking executive in Asia Pacific, to launch the first global fintech marketplace connecting Asian investors with high-quality, low-volatility and largely untapped asset classes, including U.S. consumer lending. The new strategic alliance combines Dianrong’s advanced technology with Ms. Ng’s extensive consumer-lending experience.
Ms. Ng and Dianrong engineers are currently completing beta testing for the new fintech platform that will provide Asian investors with an integrated solution to access U.S. marketplace lending assets. The platform will utilize multiple U.S. marketplace lenders and a single onboarding and know-your-customer process. It will also offer advanced risk modeling capabilities, added credit enhancement and structuring features, and blockchain solutions to safeguard data integrity. Investors will also have access to real-time performance monitoring, U.S. tax-exemption filing capabilities and a secondary market for liquidity.
Chinese Celebrity-Backed Fintech Firm QuantGroup Considering US IPO (Crowfund Insider), Rated: A
Fintech company QuantGroup, which was founded by several notable Chinese movie stars, is considering a US IPO, according to an article published in Bloomberg last week. The firm is looking to raise an estimated $200 million according to unnamed sources.
The Beijing-based QuantGroup is a financial services company that provides estimated credit ratings using big data.
QuantGroup joins a growing list of Chinese fintech firms in the process of launching US IPOs. Fenqile, a Chinese online shopping mall that lets customers pay in installments, is also looking to raise over $600 million through a US IPO.
LCQ5: Regulation of online crowdfunding and lending platforms (7th Space), Rated: B
Platforms for raising funds from and lending small loans to members of the public through the Internet (crowdfunding and lending platforms) have become popular in recent years. However, some financial advisers have pointed out that investors participating in crowdfunding activities are exposed to considerable risks. In this connection, will the Government inform this Council:
(1) whether it knows the number of companies currently operating local crowdfunding and lending platforms, and the number of complaints received by the authorities in the past three years concerning crowdfunding activities, with a breakdown by type of complaints;
(2) how the current legislation regulates the fundraising and lending activities conducted through crowdfunding and lending platforms;
(3) as some financial advisers have pointed out that investors provide funds through such platforms, which in turn lend the funds to borrowers, whether the authorities will, to avoid such investors breaching the law inadvertently, clarify if such investors are regarded as money lenders under the Money Lenders Ordinance (Cap. 163) and therefore are required to obtain money lender licences; and
(4) whether the authorities will conduct public education activities on the risks faced by investors participating in crowdfunding activities; if so, of the details?
|Year||No. of complaints about crowdfunding||No. of complaints about lending platforms|
(as at end March)
(2) and (3) Depending on the specific structure and features of the relevant arrangement, some types of crowdfunding activities, in particular equity crowdfunding and peer-to-peer lending, may be subject to the provisions of the Securities and Futures Ordinance (Cap.571), and/or the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32).
(4) We will ensure that investors and consumers of crowdfunding and lending platforms will receive proper protection under Hong Kong’s regulatory rules and standards. In view of the rapid development of financial technologies (Fintech), the Investor Education Centre (IEC) is working on a series of articles to introduce various Fintech services/products, associated risks and regulatory framework to the public.
Older Swiss fintech additiv gets $ 21.3 million in new capital (CNBC), Rated: AAA
A Zurich-based Swiss financial technology (fintech) firm, additiv, has today raised CHF21m Swiss Francs ($21.3m) in capital from core investors including BZ Bank, acting on behalf of its clients, and the investment vehicle Patinex.
Additiv provides systems to help with the digitalization of banks, asset managers and insurers.
Additiv’s key software product is the Digital Finance Suite (DFS). It has offices in Switzerland, Hong Kong and Singapore, as well as an international network of reselling partners and customers around the world.
Additiv’s key software product is the Digital Finance Suite (DFS). It has offices in Switzerland, Hong Kong and Singapore, as well as an international network of reselling partners and customers around the world.
Lendity: ideal marketplace lending exposure for pension funds, asset managers, family offices, private banks (Daily Fintech), Rated: A
A sea of 300 suits is what I faced last week at the first Swiss Alternative Lending conference hosted at SIX and in partnership SIX and Lendity.
Lendity is focused on developing structures that a family office, an asset manager, a pension fund, can book on their books or a private bank can list in their private debt product offering for qualified investors. And at the same time include:
o Global exposure – US and Europe for now (USD, CHF)
o Asset diversification – Consumer, SME, real estate etc
o Platform diversification
o Tax efficiency, despite the cross-border exposure
o Regulatory compliance, despite the cross-border exposure
o Private debt without additional counterparty risk from the issuer.
Lendity is really solving a pain point for both marketplace lending platforms and for institutional investors.
For marketplace lending platforms, Lendity acts as a marketplace that matches them with institutional capital from Financial advisors, Private Bankers, Pension funds, Family offices, and Asset managers (the 5 “investor” types).
FinTech: the influence of technology on the future of the financial sector (Lexology), Rated: A
The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has published its final report on ‘ (2016/2243(INI))’.
On the other side of the coin, the report stresses the following:
- Financial services legislation at both the EU and national levels should be sufficiently innovation friendly.
- Fintech companies should continue to contribute positively to the development of financial intermediation.
- There is scope for improvement in the means that can be used for cross-border payments (while noting the regret of the European Parliament that there is no EU-wide European-owned credit or debit card scheme).
- There are no clear European rules or guidelines for outsourcing data to the could with regard to the financial sector.
- It is concerned about the increased use of permissionless blockchain applications for criminal activities.
See the full report here.
Retirees are riskier investors than millennials, says ASX report (Financial Review), Rated: AAA
The latest ASX Australian Investor Study found the proportion of 18 to 24-year-olds who invested in the ASX over the past five years had increased from 10 to 20 per cent. The proportion of 25 to 34-year-olds had also increased, from 24 to 39 per cent.
The survey shows that 81 per cent of 18 to 24-year-olds are seeking guaranteed or stable returns, compared to 67 per cent of 25 to 59-year-old investors and 60 per cent of retirees.
Millennials have grown to recently become the largest generational cohort in Australia, with 4.9 million people, eclipsing Gen X (4.8 million) and baby boomers (4.1 million), Roy Morgan Australia says.
According to the ASX research, 44 per cent of 18 to 24-year-old investors hold cash, 31 per cent hold shares and 25 per cent have investment properties.
The ASX survey also revealed that the proportion of 18 to 24-year-old investors using professional financial advisers was 37 per cent, but Mr Mahony said the number of people who used Google to see where they should be investing was 48 per cent.
NAB’s fintech arm brings robo-advice to home loans (AltFi), Rated: A
The fintech arm of Australian banking giant NAB, UBank, has unveiled a robo-advisor aimed at helping customers complete their home loan applications.
In a national first, “RoboChat” will offer real time help for online home loan applications available 24/7. The robot will answer FAQs, such as “what term do you offer on home loans?” and “do you offer redraws and how do they work?”, as well as stupid and unrelated questions with a sense of humour.
Robo advisors give users access to advice by highly qualified experts who have multiple decades of financial experience with them as against serviced by a 22-25 year sales executive, or a family member. Also, since this is available online and requires minimal human intervention, it is the best and most economical way to make customised expert financial advice available to the masses.
Capacity (Who will cater to masses?): Bank relationship managers and advisors are a privilege of the rich as reduction in distributor commissions have made intermediaries vacate the low/ medium end of the market.
Robo-advisors reduce a lot of unpleasant experience of interaction. There is no pressure for you to buy right now, in addition to having the option of doing it at your own convenience. The design and UX at certain platforms are created to engage users without being too intrusive.
The unbundling of banking (CB Insights), Rated: A
Paytm, the private Indian mobile payment unicorn, is now coming for the banks.
Abu Dhabi Global Market admits first five fintech start-ups into its Reglab sandbox (CNBC), Rated: B
Abu Dhabi Global Market (ADGM) has announced its first batch of financial technology (fintech) regulatory laboratory (Reglab) companies that will go through its new innovation center.
- Now Money – UAE: provides mobile technology to allow low income migrant workers in the UAE to access banking and remittance services, which would otherwise be out of reach.
- Titanium Escrow – UAE: This is an automated escrow service that aims to increase trust in counterparties and stabilize the cash cycle for small businesses.
- CapitaWorld – India: A one-stop digital platform that automates the entire loan value chain from loan application to credit appraisal and post-disbursement credit monitoring. Rather than needing to physically visit multiple banks to apply for a loan, the CapitaWorld platform allows a borrower to submit a loan application just once online, and its platform will use analytics to carry out verification and credit risk scoring. It will then match the borrower with multiple banks that have signed onto the platform and ensure that the credit risk appetite matches the borrower’s profile.
- Rubique – India: Rubique is an online platform that connects banks and fund seekers/borrowers via a smart financing process that links to a range of loan, credit card and financing options that attempt to bridge the gap between lenders and borrowers.
- Finalytix -US: This is a robo-advisory platform for wealth management applications that seeks to help clients optimize their holdings, mitigate risks and costs, and identify new investment opportunities.