Daily News Digest Featured News

Thursday August 31 2017, Daily News Digest

European fintech

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News Summary

United States

DBRS Upgrades and Confirms SoFi Professional Loan Program Transactions (DBRS), Rated: AAA

Of the 36 outstanding publicly rated classes reviewed, 24 were confirmed and 12 were upgraded.

IssuerDebt RatedRating ActionRatingTrendNotesPublishedIssued
SoFi Professional Loan Program 2013-A LLCPost-Graduate Loan Asset-Backed NotesUpgradedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2014-A LLCPost-Graduate Loan Asset-Backed Notes, Class A-1UpgradedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2014-A LLCPost-Graduate Loan Asset-Backed Notes, Class A-2UpgradedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2014-B LLCPost-Graduate Loan Asset-Backed Notes, Class A-1UpgradedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2014-B LLCPost-Graduate Loan Asset-Backed Notes, Class A-2UpgradedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-A LLCPost-Graduate Loan Asset-Backed Notes, Class A-1UpgradedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-A LLCPost-Graduate Loan Asset-Backed Notes, Class A-2UpgradedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-B LLCPost-Graduate Loan Asset-Backed Notes, Class A-1ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-B LLCPost-Graduate Loan Asset-Backed Notes, Class A-2ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-C LLCPost-Graduate Loan Asset-Backed Notes, Class A-1ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-C LLCPost-Graduate Loan Asset-Backed Notes, Class A-2ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-D LLCPost-Graduate Loan Asset-Backed Notes, Class A-1ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-D LLCPost-Graduate Loan Asset-Backed Notes, Class A-2ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-A LLCPost-Graduate Loan Asset-Backed Notes, Class A-1ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-A LLCPost-Graduate Loan Asset-Backed Notes, Class A-2ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-B LLCPost-Graduate Loan Asset-Backed Notes, Class A-1ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-B LLCPost-Graduate Loan Asset-Backed Notes, Class A-2AConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-B LLCPost-Graduate Loan Asset-Backed Notes, Class A-2BConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-C LLCPost-Graduate Loan Asset-Backed Notes, Class A-1ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-C LLCPost-Graduate Loan Asset-Backed Notes, Class A-2AConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-C LLCPost-Graduate Loan Asset-Backed Notes, Class A-2BConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-D LLCPost-Graduate Loan Asset-Backed Notes, Class A-1ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-D LLCPost-Graduate Loan Asset-Backed Notes, Class A-2AConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-D LLCPost-Graduate Loan Asset-Backed Notes, Class A-2BConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-E LLCPost-Graduate Loan Asset-Backed Notes, Class A-1ConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-E LLCPost-Graduate Loan Asset-Backed Notes, Class A-2AConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-E LLCPost-Graduate Loan Asset-Backed Notes, Class A-2BConfirmedAAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-B LLCPost-Graduate Loan Asset-Backed Notes, Class BUpgradedAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-C LLCPost-Graduate Loan Asset-Backed Notes, Class BConfirmedAA (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-D LLCPost-Graduate Loan Asset-Backed Notes, Class BConfirmedAA (low) (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-E LLCPost-Graduate Loan Asset-Backed Notes, Class BConfirmedAA (low) (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-B LLCPost-Graduate Loan Asset-Backed Notes, Class BUpgradedA (low) (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-C LLCPost-Graduate Loan Asset-Backed Notes, Class BUpgradedA (low) (sf)Aug 30, 2017US
SoFi Professional Loan Program 2015-D LLCPost-Graduate Loan Asset-Backed Notes, Class BUpgradedA (low) (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-A LLCPost-Graduate Loan Asset-Backed Notes, Class BUpgradedA (low) (sf)Aug 30, 2017US
SoFi Professional Loan Program 2016-E LLCPost-Graduate Loan Asset-Backed Notes, Class CConfirmedA (low) (sf)Aug 30, 2017US

CREDIBLY SELECTED TO SERVICE BIZFI’S $ 250M PORTFOLIO (Credibly Email), Rated: AAA

Credibly, a leading findata small and medium-sized business (SMB) lending platform, announced today that the company is now servicing BizFi’s $250 million portfolio and 5,200 merchants.  Since 2005, BizFi had been a leading capital provider to SMBs and in 2016 was one of nation’s top three largest originators of merchant cash advances.  Numerous SMB direct lenders vied for the BizFi portfolio. Credibly was chosen due to their proprietary data science driven portfolio management strategy.

Credibly also announced that it has crossed the $500 million milestone in capital deployed to tens of thousands of SMBs across the U.S.  This is separate from the $250M portfolio the company is now servicing from BizFi.

In addition to servicing the BizFi portfolio, Credibly is working with both sales partners and merchants to provide additional working capital to the businesses in BizFi’s portfolio. Credibly’s data science team has the ability to analyze BizFi’s twelve years of data and remittance history, which will allow Credibly to better service both the BizFi and Credibly portfolios. Further, BizFi’s data enhances Credibly’s risk management, scoring models, and portfolio management tools.

The Small Business Association (SBA) estimates that traditional banks still reject approximately 90 percent of SMB loan applications. Since 2010, Credibly has emerged as a proven platform that leverages data science and analytics to provide SMBs with a simple and intuitive way to access critical working capital.  The company addresses the fundamental capital needs of SMB owners across a broad credit spectrum and through every stage of a business’s life cycle.

Main Street SMBs across a wide variety of industries that include restaurants, retail stores, salons, spas, dry cleaners, auto body shops, and doctors’ offices, all rely on Credibly to secure the necessary capital they need to grow.

Fundrise Re-Opens Income eREIT (Crowdfund Insider), Rated: AAA

Fundrise, the very first real estate crowdfunding platform in the US, has re-opened its Income eREIT to investors.

According to Fundrise, the Income eREIT has performed quite well, so far. The Income eREIT has generated 10% or higher in annualized dividends since Q2 of 2016. As of Q3 2017, the fund has posted a 10.5% annualized dividend which compares favorably to the FTSE NARET Composite REIT Index at 4.2%.

Bills Being Introduced to “Fix” Decision in Madden v. Midland (Lend Academy), Rated: A

For a historical perspective you can read our coverage of the case at the below links:

An article in American Banker this week from Adam Levitin, professor of law at Georgetown University, provides his perspective on what the bills mean for the case.

Nat Hoopes, Executive Director of the Marketplace Lending Associationdisagreed with Levitin’s assessment. Here is what he had to say:

These bills are strongly pro-consumer. They will help ensure that consumers can continue to refinance their higher interest rate debts, saving consumers significant amounts of money through lower interest costs.  Furthermore, these bills clearly cannot facilitate predatory lending because they do not change the rate or terms on which any entity in this country (regulated at the state or federal level) can lawfully lend money.  The language of the bills simply reaffirms one of the fundamental principles of contract law — that valid loan contracts can be sold on the secondary market.

We have a situation created by the Second Circuit decision where responsible lending has been reduced in three states (NY, CT, VT). Demand has not been reduced in these states.

Trizic Drags Banks Into The Fintech Age With Automated Wealth Management (Benzinga), Rated: A

Trizic, the fintech company behind a B2B wealth management platform, has signed on as the technology provider to Fidelity National Information Servcs Inc FIS 0.21%, connecting the Bay Area startup with the banking sector.

Trizic Digital Advisor — an open-API platform for registered investment advisers, enterprise clients, banks and credit unions — is a product built from the ground-up, CEO Drew Sievers told Benzinga.

The platform’s features include trading, portfolio management, cash management, billing and compliance reporting

The 8 hottest housing markets in America (Business Insider), Rated: A

Sharestates, an online real-estate investing platform, has released its fall report on the hottest housing markets in the US.

Places on the list are ranked by three metrics:

  • Return on Investment (ROI): The rate of return to Sharestates loan investors.
  • ARV: The ratio of the total loan amount, including acquisition and rehab financing, compared with the After Repair Value.
  • Increase in demand from 2016 to 2017: Percent of 2017 Sharestates loans in the listed areas compared with 2016.

The top 3:

3. Sparrows Point, Maryland

ROI: 11.8%

ARV: 50%

2. Flatbush, Brooklyn, New York

ARV: 28%

Increase in demand: 400%

1. Fishtown, Philadelphia, Pennsylvania

ROI: 11.8%

ARV: 14%

Increase in demand: 650%

LendingTree, Inc. Announces Changes to its Executive Team (PR Newswire), Rated: A

LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation’s leading online loan marketplace, has announced two key promotions within its leadership team. J.D. Moriarty, who joined LendingTree earlier this year as SVP of Corporate Development, has been promoted to Chief Financial Officer, and Gabe Dalporto, who previously served as the company’s Chief Financial Officer since 2015 and as LendingTree’s Chief Marketing Officer from March 2011 to June 2015, has been elected to the company’s board of directors.

DOL Rule Delay Highlights Industry Battle Lines (Financial Advisor IQ), Rated: A

Word that full implementation of the Department of Labor’s contentious fiduciary rule has been delayed for two years — until July 2019 — may not have shocked many observers but it’s still deeply significant, say industry experts on both sides of a debate that’s raged across two very different presidential administrations.

That’s if it ever even happens, grumbles Rostad, whose organization wants all financial advisors to be client-first fiduciaries as a matter of public service. He says the Trump administration and the brokerage industry despise two provisions of the DOL rule — the right for investors to sue advisors and firms for breaches of the rule, and the best interest contract exemption, which lets advisors continue receiving commissions if they agree in writing to continue acting in the client’s best interests and make a full disclosure of options other than commission-based business available. And the administration and brokerage industry will be working overtime between now and mid-2019 to get the provisions watered down or eliminated altogether, says Rostad.

Meanwhile, the Financial Services Institute, a Washington D.C.-based advocacy group for “a healthier, more business-friendly regulatory environment for our members” — mainly broker-dealers and their advisors — sees the delay as an opportunity for needed refinements.

Banks aren’t giving up on personal finance apps (American Banker), Rated: A

Don’t consign personal financial management apps to the ash heap of technology just yet.

Granted, on Thursday Prosper Marketplace is discontinuing Prosper Daily, an app formerly known as BillGuard that helped users monitor their finances and credit scores. And the next day Capital One Financial is set to close the money management app Level Money.

Will Blockchain Change The Way We Invest? (Forbes), Rated: A

Currently, the value of all the Bitcoin in the world is around $90 billion, much less than individual companies such as Amazon ($474.41 billion market cap), Google ($649.49 billion) and Apple ($815.39 billion). However, with the current trend, some investors predict cryptocurrencies to be worth $5 Trillion by 2022.

As cryptocurrencies are becoming more common, new blockchain powered platforms are emerging to change the way we invest. The success of these companies may create a scenario in which fintech companies like RobinhoodFundriseQuantopian and others – currently considered the most disruptive companies in the world – will become outdated in a few years.

Real.markets – Disrupting real estate crowdfunding

REAL is an Ethereum Smart-Contracts governed ecosystem that focuses on creating the best conditions for Real Estate investment eliminating costs due to unnecessary intermediaries, providing transparency and liquidity, alleviating tax inefficiencies and easing cross-border transactions under a unified crowdfunding platform.

NASDAQ LINQ – Trade private companies

Almost two years ago NASDAQ launched LINQ, a digital ledger technology that leverages a blockchain to facilitate the issuance, cataloging and recording of transfers of shares of privately-held companies on The NASDAQ Private Market in collaboration with Chain.

enigma – machine-based investing platform and infrastructure for crypto-assets

From 2009 to 2015 alone, the amount of assets under management (AUM) by quantitative hedge funds grew at a rate of 14% year-over-year, nearly double the 8% year-over-year growth of assets managed by traditional hedge funds.

Following the rising demand for crypto-currencies, enigmabelieves an interesting opportunity arises: algorithmic trading on crypto-assets. Many exchanges already offer the ability to place orders through RESTful APIs, permitting users to run their trading algorithms locally.

FinTech Can Help Increase Financial Literacy (Huffington Post), Rated: A

From mobile payments, app based investing platforms, to online banking solutions, financial technology (FinTech) has revolutionized not only how consumers receive financial services but also how they expect to receive such services.

recent studyshowed that 59 percent of senior financial services executives believe that we will see an increase in the use of digital solutions to improve operations, with 56 percent of executives citing technological disruption as a component of their business strategy. From an operational perspective, findings have shown that core financial institution activities including Deposits and Lending and Investment Management are expected to be radically reconfigured as a result of technological innovation. Consumers have also begun to shift their preferences towards FinTech, with statistics indicating that in 2016 a third of consumers reported regular use of financial technology services, with such use doubling from two years prior. Furthermore, more than 52 percent of consumers are expected to use FinTech services in “the near future.”

A recent study found that two-thirds of Americans cannot pass a basic financial literacy test, with the number of those who can pass such a test decreasing annually. Globally, the figures reflect similar trends; in 2015, only 35 percent of men and 30 percent of women were classified as financially literate.

Greenlight’s flagship product is a debit card for children that utilizes mobile app technology to provide parents with a customizable and monitorable solution to facilitate purchases.

TS: Greenlight is free for 30 days and then just $4.99/mo. for the whole family to use (all parents and up to 5 kids). Each child receives their own Greenlight Card with their name on it and a unique PIN. Parents use our app on either their iOS or Android smartphone, and can easily manage all of their kids’ cards from one place.

Parents can load and transfer money onto their kids cards instantly from anywhere with no additional fees. That money can be limited to specific stores or websites, or be spent anywhere depending on what parents decide. Greenlight provides real-time mobile alerts to tell parents where and when their kids are making a purchase and can even automate allowances.

Kids can also use the Greenlight app on their smartphone. They can visually see their balances, request money, and communicate what they’re purchasing with their parents. When a parent receives a funding request from one of their children, they can easily approve or decline the request in the app.

Bitcoin Exchange Sees Complaints Soar (Bloomberg), Rated: A

The U.S. Consumer Financial Protection Bureau has received at least 293 complaints about Coinbase Inc., according to data reviewed by Bloomberg.

More than a third of the grievances came from individuals who said they were unable to access their money when promised. Many people also complained about other transaction or service problems. Accusations of fraud represented less than 15 percent of the complaints.

Coinbase complaints

LendingCalc Appoints Former Chief of Risk at Dianrong, Terry Tse as Adviser (Newson6.com), Rated: B

LendingCalc, Inc., a direct investment platform providing global access to digital specialty finance for institutional investors, announced the appointment of Terry Tse, the former Chief Risk Officer of the leading Chinese P2P platform, Dianrong, as strategic adviser for the firm. In his role, Terry will help build LendingCalc’s global investment gateway and platform due diligence framework.

United Kingdom

Marketplace lending platform Funding Circle cuts off smaller brokers (AltFi), Rated: AAA

Funding Circle will be refocusing its energies on its most highly engaged business finance brokers.

More changes in the ever-changing marketplace lending sector. A few weeks on from announcing sweeping changes to its investment process, leading business-focused platform Funding Circle is changing its approach to working with corporate finance brokers.

One such broker, who wished to remain anonymous, told AltFi that Funding Circle is cutting off 300 brokers. The platform works with approximately 1,000 active brokers at present.

P2P lender LendingCrowd extends cashback offering (AltFi), Rated: AAA

The Edinburgh-based platform is extending its cashback offering, giving clients £150 for investing £2,500 or more on the platform by 30 September.

REDWOOD BANK LAUNCHES FOUR MONTHS AFTER SECURING ITS INITIAL BANKING LICENCE (Global Banking and Finance), Rated: A

Redwood Bank, Britain’s newest business bank for SMEs (small and medium sized enterprises), has announced that just over four months after securing its initial banking licence, it has completed its “Mobilisation” phase and has now opened for business, offering secured SME mortgages for business owners, as well as for experienced commercial and residential property investors. It has also launched a competitive business deposit account.

Its speed to market is the result of a combination of factors, including having a very experienced and proven management team, and the fact that it’s the first business bank with 100% cloud- based infrastructure, which improves efficiency as well as security.

Trends among investment advisors mirror developments in P2P lending (AltFi), Rated: A

New research from Equifax Touchstone, an intermediary database provider, illustrates an enhanced focus among investment advisors on delivering consistent investment outcomes to customers.

Of 141 surveyed investment advisors, 82 per cent were found to have a centralised investment process, meaning that a consistent approach to allocation and monitoring exists for all clients.

However, 76 per cent use model portfolios, which are bespoke to a customer’s risk-reward preferences, and which are automatically rebalanced regularly to bring returns in line with expectation – even if the broader approach to investment management is the same for all clients. These model portfolios are comprised of a diversified pool of mutual funds that invest in a variety of assets, ranging from large and small stocks to REITs.

But in its shift to passive strategies, P2P is perhaps less closely aligned with investment advisors. Equifax Touchstone’s survey shows that advisors still very much value active investment vehicles. While passive investing plays a part for 82 per cent of advisors, the majority invest 25 per cent or less in passives, with11 per cent of advisors investing more than 50 per cent in them.

Crowdfunding your start-up: Learn the basics from Crowdcube (Startups.co.uk), Rated: A

If you’re looking to raise finance for your business, there are a few options you can explore including secured or unsecured debt, private equity, venture capital investment, peer-to-peer (P2P) lending and crowdfunding.

Some of the more popular crowdfunding models include reward-based, donation-based, micro-lending, P2P, peer-to-business and equity.

Equity crowdfunding as an industry, over its six-year lifetime, has raised about £600m in the UK, with close to half of that having been raised by Crowdcube. Equity crowdfunding facilitates investment into start-ups, early stage businesses and growth companies in return for a pro-rata equity stake in the business.

Investments can be made from as little as £10 with no maximum in place, which typically culminates in pro-rata ownership of the company via ordinary or B investment shares.

You may have also seen the likes of BrewDog, River Cottage and Grind raise money through bonds on Crowdcube. This is where a company launches a funding round starting from at least £250,000.

BrewDog raised £10m through a bond in December 2016, offering 8% interest to the investors. Over 2,700 people backed BrewDog in three weeks and should see interest payments for the next four years; the length of the bond term.

“Property Crowd Funding” – The Magic of Modern Day Investing (Huffington Post), Rated: A

Real estate has been booming around the world, particularly in the UK, with new housing, apartment and condo complexes being built at a phenomenal pace.

Abdullah Iqbal, Co-Founder of the Knightsbridge based start-up PropTech Crowd.

While there existed property crowdfunding companies already, Abdullah and his dad saw an obvious vacuum in the market. “None of the property crowdfunding platforms were Shariah compliant at the time, due to them being involved with interest. Our motivation was to take the banks out of the equation, enabling investors to have shares and democratising the property market for everyone, while conforming to the Islamic prohibition of interest”, emphasises Abdullah.

The company’s core mission is to revolutionise property investment through innovative crowdfunding technology, allowing everyday investors to access high-ROI opportunities that they may have been priced out of in the past.

I learned that Mufti Abdul Kader, a renowned Islamic scholar and expert in Islamic finance, is a Shariah Compliance Advisor at PropTech Crowd. His duties entail making sure that all elements of the business are Shariah compliant, visibly and consistently.

Giving developers direction on safety (Bridging and Commercial), Rated: A

At LendInvest we have been clear that the housing market will look a lot healthier when there is less emphasis on the major developers, when we instead have a market which encourages small- and medium-sized (SME) developers to build homes too. Our studies have found that SME developers are excluded from much of the government support that exists for SMEs from other industries, something which has to change.

Bumpy Brexit risk does not justify record low rates (Reuters), Rated: A

The Bank of England should not keep interest rates at their record low as an insurance policy against the risk of a “bumpy Brexit” and it needs to start raising borrowing costs now, BoE policymaker Michael Saunders said.

But at the same time the Brexit hit to sterling has pushed up inflation above the BoE’s 2 percent target, leading to the split among the central bank’s rate-setters.

Earlier this month, they voted 6-2 to keep rates at 0.25 percent and the BoE warned that Brexit was weighing on the economy.

China

What are the Implications of the Rapid Growth of Fintech in China? (Brink), Rated: A

We see five major key success factors for the future China fintech market:

  1. Data abundance and application – Business models in financial services will be increasingly data-driven, and data will be at the core of the value chain.
  2. Large customer base
  3. Availability of proprietary and comprehensive products
  4. Strong knowledge of financial services and risk management – A strong combined core of financial services expertise and risk management capabilities remains a prerequisite for success, allowing for more efficient identification of useful data and building of effective risk models.
  5. “Fin plus tech” organization and culture

Niche Fintech Players should expand and perhaps transform their business models. The first and most intuitive way is to grow organically beyond a niche. Qudian, for example, has expanded beyond its legacy focus on university borrowers to develop an e-commerce ecosystem driven by a consumer finance model.

China fintech

European Union

SeedInvest to Host Live Crowdfunding at LendIt Europe in London (Crowdfund Insider), Rated: AAA

SeedInvest and LendIt, the roving Fintech conference, have partnered on live crowdfunding for the upcoming LendIt Europe event scheduled for this coming October. The live event is being billed as a European first. LendIt Europe participants will be able to invest directly in companies participating in the PitchIt portion of the event taking place in London.

SeedInvest previously powered several live investment crowdfunding events in Europe with noted success. SeedInvest’s partnership with Jason Calacanis, and his LAUNCH Festival, reportedly raised $7.5 million from 3900 individual investors. This will be the platform’s first foray beyond the US borders though and may be a sign of a strategic push for the company.

France and Sweden are scooping up a bigger share of Europe’s fintech deals since Brexit (Quartz), Rated: AAA

France and Sweden’s share of financial technology deals in Europe has grown since Britons voted to leave the EU in June last year, according to research firm CB Insights.

France’s share of venture capital transactions has increased by five percentage points since 2014, to 11% so far this year. Sweden’s take has risen three percentage points over that time, to 12%.

European fintech

Download the CB Insights report on European fintech trends here.

LendIt Europe Announces Upgrade Co-founder and CEO Renaud Laplanche as Keynote Speaker (Fintech Finance), Rated: AAA

LendIt announced that Renaud Laplanche, the CEO of Upgrade and former CEO of Lending Club, will join the keynote speaker roster for LendIt Europe 2017.

He will be giving the opening keynote speech on the second day of LendIt Europe where he will be giving an update on Online Lending 2.0 and discussing the US fintech market, where the online lending industry is today and how it fits into the broader fintech sector trends going forward.

Peter Thiel is backing Berlin ‘InsurTech’ startup Coya in a million round (Business Insider), Rated: A

Silicon Valley investor Peter Thiel has led a $10 million seed funding round into Berlin-based “InsurTech” startup Coya.

Thiel’s fund Valar Ventures led the round, which also included funding from e.ventures, and La Famiglia, a European venture capital fund backed by entrepreneurs.

The investment is one of the biggest “seed funding” rounds in Germany.

International

Banking landscape shifts as Chinese groups globalise (Financial Times), Rated: AAA

Global cross-border capital flows have declined 65 per cent since 2007, and half of that is explained by a drop in cross-border lending flows. The largest global European banks, and some US ones too, are in retreat from foreign markets. But financial globalisation is far from finished — rather it is broadening and becoming more inclusive as developing economies, most notably China, step into the breach.

The eurozone has been at the forefront of the retreat from foreign markets among banks in advanced economies. The foreign claims of eurozone banks have fallen by $7.2tn, or 45 per cent, since 2007, and nearly half of that has been claims on other borrowers in the eurozone — particularly other banks, new MGI research finds. UK and Swiss banks have sharply reduced foreign assets since the crisis as well. US banks, which have always been less global than their European counterparts, have re-focused on growth at home.

In contrast, China’s four largest commercial banks have seen their foreign assets grow 12-fold since 2007 to more than $1tn. And that’s still only 9 per cent of their total assets. Foreign assets make up 20 per cent or more of the total assets in the largest banks in all advanced economies; if China’s largest banks follow that path, they could see tremendous growth in foreign lending ahead.

How Banks And Fintech Startups Redefine Finance (CoinTelegraph), Rated: A

But as financial technologies continue to expand, legacy players have come to accept the disruptive role of fintech startups and the need to work together. In recent years, the relation between banks and fintech startups has evolved from marginal investments to closely knit collaboration and integration.

Banks are now getting involved at different levels to help fintech companies get off the ground. This includes an increasing number of buyouts, mergers and partnerships.

An example is Goldman Sachs, a banking firm that has invested more than $570 mln in fintech companies since 2012. Last year, the banking giant acquired Honest Dollar, a digital retirement savings platform, in order to expand the startup’s brilliant solution to millions of its customers. Along with Standard Charter, Goldman also helped Momo, a Vietnam-based mobile wallet and payment app, raise $34 mln in two rounds of funding. Goldman also launched its own online lending service Marcus last year, a move that is inspired by the fintech culture. The service has so far doled out more than $1 bln in loans and expects to cross $2 bln by the end of this year.

On the other end, fintech startups are helping banks adopt new technology. Ezbob, for example, is a UK-based startup that provided online lending services to SMEs before white-labeling its technology and changing its business model to a Lending as a Service (LaaS) platform. The Royal Bank of Scotland has leveraged Ezbob’s technology to launch Esme, its automated lending platform which allows small and medium-sized businesses to obtain loans quickly, even outside working hours.

The future of robo-advice is human (Robo Advice News), Rated: A

When Betterment decided to offer its clients access to a human financial advisor, it marked a growing trend of robo-advice platforms adding a human touch element.

Automated wealth platforms or robo-advice is not likely to find its success by just digitalising its services, says Thomas Davenport, a professor of information technology and management at Babson College. The future lies in a hybrid model that uses the efficiency of big data with the softness of personalised human advice.

Around 60 per cent of consumers would rather have a live person in charge of their finances instead of relying on automated technology, according to a survey from Legg Mason Asset Management.

Reducing Investment Funds to SMEs from Financial Institutions to Drive Global Market for Peer-to-peer Lending (OpenPR), Rated: B

A recent report added to the portfolio of MarketResearchReports.biz presents a detailed analytical account of the global market for peer to peer lending. The report, titled “Global Peer-to-peer Lending Market Size, Status and Forecast 2022,” states that the market will exhibit growth at an exponential pace over the period between 2017 and 2022.

This report presents detailed insights into the market and its expansion across the globe from 2017 to 2022.

Get Sample Copy Of This Report @
www.marketresearchreports.biz/sample/sample/970169

Australia

Fintech’s feeding frenzy: why it’s time to stop, collaborate and listen (Finfeed), Rated: AAA

In 2016, KPMG suggested US$24.7 billion was invested in fintech companies globally. Data accumulated by Financial Technology Partners, an investment bank focused on fintech, cites $36 billion across over 1500 funding deals from over 1700 unique investors (not taking into account M&A deals) as a more accurate figure.

As it has done throughout history, the banking and lending industry is dominating the fintech landscape, with payments and e-commerce a formidable rival.

The financial services and technology sectors are set for changes as the budget proposed a series of measures to encourage innovation in the fintech industry. This includes new legislation which, if implemented, is likely to allow crowd-sourced equity funding, tax concessions for start-ups and angel investors and fewer barriers to licensing of finance firms. The traditional banking sector could see more digital disruption arising from these changes which could subsequently create demand for top finance and technology talent.

Credit insurance provider Atradius recently launched its new digital platform ‘Atrium’, which provides customers and distribution partners with real-time data to better understand buyers, credit limits and risk. The platform is designed to drastically improve the user experience, including time efficiency – operations that used to take 15 minutes now only take three.

Then there is Lenddo, an Asia-based fintech platform that uses non-traditional data to provide credit scoring and verification to economically empower the emerging middle class around the world.

Secure payments data platform, EFTsure, recently announced a new collaboration agreement with PricewaterhouseCoopers Australia. Under the agreement, PwC can advise certain clients of EFTsure’s innovative real-time payment verification technology and best practice payee management solution to help those clients to mitigate the risk of fraudulent or erroneous electronic business payments.

Other companies making inroads include UBank, one of Australia’s leading digital-only banks, which recently unveiled RoboChat, Australia’s first virtual assistant to help potential home buyers and refinancers complete their online home loan applications.

fintech Australia
Source: Finfeed
India

Fintech Startups And Why They Need To Get An NBFC License (TechStory), Rated: A

FinTech, the abbreviated form of financial technology, is that segment of the start-up culture that deals with good old finance and banking business but through the more novel methods of crowdfunding, peer-to-peer models, mobile payments, loans and even asset management. They squarely fall under the definition of Non-Banking Financial Companies (NBFCs), and considered against the Indian banking scenario they do not meet the legal definition of a bank as is outlined in the Companies Act 2013 or even the Companies Act, 1956.

If a recent Accenture report is anything to go by, fintech that was in a near-nascent state back in 2008 globally shot up in value from $930 million to about $12 billion by the start of 2015.

The other advantages are:

  • Cheaper business setup and expansion costs;
  • Quick rolling of funding rather than the drawn out method of first talking to investors;
  • Cheaper cross-border transfer of money (a fine example is that of UK-based TransferWise);
  • Simple registration process backed by minimal documentation, sometimes not requiring any Net Worth or collateral information (as is the case with LendingKart);
  • Make alternative credit scoring possible for ineligible borrowers for various types of loans; and
  • Even foster efficient fraud and anti-money laundering management in real time across products, channels and customers (as IndusInd has been successfully pioneering since quite some time now).

Why FinTechs need NBFC licenses to operate?

Since NBFCs are principally in the business of providing loans and advances, insurance, acquisition of shares, debentures and stocks, leasing, hire-purchase and even receiving deposits under a set arrangement or scheme, they fulfil the popular 50-50 test and are required to obtain the ‘Commencement of Business’ certificate from RBI (as per section 45 l (a) of the RBI Act).

The 50-50 test that is the basis of the principal business conducted by an NBFC finds application when a company’s financial assets constitute more than 50 percent of the total assets and income from financial assets constitute more than 50 percent of the gross income.

Democratising real estate via blockchain (New Straits Times), Rated: A

At the same time, our commitment to offer alternative investment channels was reinforced when we saw how the global flow of funds and individual investors continued to cause disruptions in house prices in many major cities.

Crowdfunding and peer-to-peer lending have been touted as among potential alternative platforms that can give small developers access to funding. We saw a number of such platforms used in many countries and they helped solve some of the funding needs.

On June 18 2015, we were deeply encouraged by news that Wanda Group (one of the largest commercial developers in China or the world by now) announced that it had raised five billion yuan (RM3.4 billion) from investors online in just three days to fund the construction of three malls. Investors were able to take part in the projects by investing as little as 1,000 yuan. This is truly opening up access to real estate.

Firstly, digital tokens created on blockchains are technically very difficult to hack and all transactions and documents are transparent. Secondly, in transaction using digital tokens, especially those involving completed properties, a lot of middleman fees can be reduced. More importantly, such digital tokens can be traded much like shares are traded on stock exchanges. This makes real estate a liquid instrument.

A Loan to Fund Every Need (Outlook India), Rated: B

“Data analytics offer efficient ways of analysing credit history and behaviour of a prospective borrower to make lending fast and easy on the digital platform,” says Rishi Mehra, CEO, Wishfin.com. Smartphones have made digital transactions seamless and by including a lending option, the ‘right now’ generation has it going for them like never before.

A P2P lending portal works in a way wherein lenders can make offers to fund borrower’s requirements which are accepted on first come, first served basis. Borrowers can seek to raise money from multiple lenders. A formal contract is signed by the lender and the borrower once they reach an agreement. The good news is that RBI has finalised P2P lending norms, which means there is nothing illegal or fishy about these loans. This format of lending is fast catching up, especially among the youth because many of them don’t have a credit score that will make them eligible for borrowing as soon as they start earning.

Asia

Financial authority to regulate peer-to-peer lending (The Jakarta Post), Rated: AAA

The Financial Service Authority (OJK) will soon regulate peer-to-peer (P2P) lending to minimize the risk of bad debt in the virtual financing business.

“The procedures for borrowing will be regulated in detail, such as how contract agreements anticipate the risk of bad debt,” Hendrikus said as reported by kompas.com on Wednesday.

He said his institution would also regulate the mechanism of “know your costumer” (KYC) through the existing technology.

Geisha loan application: Accepted (Nikkei Asian Review), Rated: A

Some new loan-makers are dabbling in tech to help them gauge a potential borrower’s creditworthiness.

For potential borrowers it finds here, the lender will set artificial intelligence loose on the trove of data that the booking website serves up, like how busy the applicants’ inns are.

Japan Net Bank, an online lender, also uses technology to sift through big data when screening potential borrowers. Partnering with freee, a Tokyo-based online accounting software provider, the bank recently began using AI to quickly pick up and analyze data concerning potential borrowers’ financial situations as well as how well their businesses are doing.

Middle East

Bahrain: The latest nation to lay claim to “fintech hub” status (AltFi), Rated: A

Where isn’t a global fintech hub these days? Count Bahrain among the multitude of claimants. The Central Bank of Bahrain (CBB) has announced the first members of its new regulatory sandbox: NOW Money and Tramonex.

Dubai-based NOW Money claims to be the first company in the Gulf region to offer a mobile banking solution to users, including accounts and a range of low-cost global money transfer options for low-income workers.

Tramonex is a business-facing solution, helping companies to process and transfer funds online. Its focus is on facilitating conversion and settlement services to automate cross-border transactions.

Micropayments FinTech Innovation in Dubai (Simmons&Simmons), Rated: B

International law firm Simmons & Simmons continues to advise on cutting edge payment platform projects and the emerging regulation of payments. The Middle East TMT team, led by partner Raza Rizvi and senior associate Neil Westwood, advised Mercury Payments Services LLC (Mercury) on the phased roll out of an innovative payment service through cards issued by the Roads and Transport Authority of Dubai (RTA).

Africa

SA fintech adoption beats global average, expected to surge (Moneyweb), Rated: AAA

South Africa ranks among the highest in fintech users globally and reports one of the highest incidences of intended use, a new study finds.

At 35%, fintech adoption in South Africa beats the global average of 33% and is mostly in line with its emerging market peers, who boast large tech savvy but financially underserved populations. Domestically, 6% of fintech users use five or more services and are classified as super users.

At 41%, adoption among consumers aged 25 to 34 is highest, closely followed by those aged 35 to 44 at 40%. The largely digital native 18 to 24 year-old category lags behind at 36%, mostly due to them having less sophisticated financial needs. Adoption gradually declines from age 45 upwards.

EY found that fintech adoption is highest among South Africans who earn $50 000 to $80 000 per annum at 51%, with usage at 50% among those who earn more than $150 000 annually. Adoption of all five services – money transfer and payments, financial planning, savings and investments, borrowing and insurance – is highest among the former income bracket. Surprisingly, those that earn more than $150 000 are the highest users of borrowing services, possibly due to their ability to leverage off their earnings.

fintech South Africa
Source: Moneyweb
South America

Brazil proposes new rules for fintechs, peer-to-peer lending (NASDAQ), Rated: A

Brazil’s central bank has proposed allowing financial technology companies to lend money, without taking deposits as commercial banks do, as part of new rules for the fast-growing fintech industry in Latin America’s largest economy.

The rules,which will be assessed in public hearings over the next 2-1/2 months, should not require congressional approval, central bank director Otávio Damaso said on Wednesday. Commercial banks will be allowed to create their own fintechs once the rules are in place, he said.

CARICOM

Global Domination Capital (Newsday), Rated: A

Global Domination Capital is set to be the region’s first fintech startup company, offering equity crowdfunding and peer-to-peer lending solutions to the OECS countries and the CARICOM member states.

This includes Barbados, Jamaica, The Bahamas, Trinidad and Tobago and The Turks and Caicos Islands.

Authors:

George Popescu
George Popescu
Allen Taylor
Allen Taylor

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