Daily News Digest Featured News

June 21st 2016, Daily News Digest

US

  • Klarna makes sales soar at shoes.com
  • John Mack still bullish on fintech and marketplace lending. Showing robo-advisors as an example.
  • Americash, in business for 18 years, ranked first in customer service out of 350 lenders.
  • Chen Shanda’s group increases Lending Club stake to 15.13% from 11.7%.

UK

  • Huge drop in bank loans to property developers as p2p bites !

Germany

  • Commerzbank, first major bank launching own pure marketplace lender, Main Funders.

Australia

  • Huddle Money raises $6mil to start with p2p insurance, and move towards other p2p financial products.

 

 

United States

Shoes.com sees sales soar with pay-after-delivery option. (nrf.com), (Rated: AAA)

When a consumer clicks on a shoe and moves to the checkout page they’re given a choice of paying with a card or PayPal, and they’re usually given the option of “Pay After Delivery.”

“The nice feature about this is, you get the shoes and can see how they fit and if they work with what you wear, and if they don’t, you’re not having to deal with having a charge on your account then waiting for it to be refunded,” says Henshaw. “The convenience factor is very high, which leads to repeat customers.”

There are some gentle reminders about payment that get progressively more urgent, but Klarna counts on stopping fraudsters before they get their hands on the product.

“There’s some work in the background that goes on to prevent fraud,” Billingsley says. “We have models and algorithms that watch very closely. Our partner merchants also share past purchasing data with us so we know who’s buying. We know if the address has been associated with any past problems and if there have been excessive returns or fraud associated with it.”

Using the IP address, the Klarna system can instantly determine if the purchaser is using a “spoofed” IP location to stay hidden — often a sign of potential fraud. “If a person was logging in from Miami and minutes later they’re logging in from San Diego and buying 10 pairs of the same shoe, the system knows that looks funny,” he says.

If the program senses something isn’t right, it asks for a credit card to make the purchase at that moment. “Because we own the checkout experience, we dynamically shift it as needed,” Billingsley says. “Fraud can happen, but we’re confident that our losses are less than what you’d see at a regular credit card issuer.”

The program also determines what type of purchases can work for pay after delivery. The consumer who orders a pair of socks isn’t likely to be given the Klarna option, since it’s a such a small price point; someone buying four different shoes with a $500 basket is likely to receive the option.

It had been thought that Millennials would lead the way among Shoes.com customers in using the program, but internal stats show differently. “It seems to be across the board, men, women, people of all ages are using it and liking it,” Henshaw says. “That’s probably as it should be.”

John Mack Pinned on Lending Club on CNBC, (Crowdfund Insider), Rated: AAA

John Mack, a bit of a legend in the banking world who garnered the nick-named Mack the Nice (in contrast to some other less savory nicknames for other iBankers), visited the studios of CNBC this morning to discuss a broad range of topics.

Mack promptly stated he would not discuss Lending Club because they are going through “a lot of analysis and we haven’t finished our work” and then he quickly migrated over to discussing the broader sector of Marketplace Lending.

Fintech is going to change the business. There is no question about it.” Mack said whether you are buying a car, getting a loan, buying a mortgage all of that is going to change. “We already see it and I think it is going to continue.”  Mack drew a parallel to Robo-Advisors that charge a fee of about 25 basis points. Traditional financial advisor services will charge 2% to 3%.

Asked about online lending in a rising interest rate environment and more loans start defaulting.  Mack pointed to the obvious. Marketplace Lenders raise their rates to match the rise and accommodate an increase in risk.

Asked if he plans on staying on the Board of Lending Club. Mack said, “I do. Absolutely.”

Americash Awarded Top Spot on LendingTree’s Top Ten List for Q1 2016, (PR Web), Rated: AAA

Americash has been ranked first out of over 350 lenders on the quarterly “Top Ten Lenders List” by LendingTree (TREE) for the first quarter of 2016. The company offers a full line of products including fixed-rate mortgages, FHA loans, Home Equity Lines of Credit, and high-interest debt consolidation.

Based in Southern California, Americash has been in business for over 18 years with a steady track record of customer satisfaction

Billionaire Chen’s Shanda Group raises stake in Lending Club, (CNBC), Rated: AAA

Singapore-based private investment firm Shanda Group, which is led by Chen, reported a 15.13 percent in Lending Club as of June 16, up from 11.7 percent reported on May 11, two days after Laplanche was forced out.

Are you watching the right fintech players?, (Banking Exchange), Rated:A

The growth in alternative lending over the last few years has been driven by data. Alternative lenders are using new types of data for determining creditworthiness to target borrower segments that have been underserved by banks, including small businesses.

Kabbage announced in October of last year that it was lending more than $5 million per day to small businesses, and OnDeck issued more than $1.9 billion in loans to small businesses last year.

However, the commonly identified alternative lending startups in the small business space face the same hurdle that alternative lenders face across the board: They can’t grow beyond their niche market segments to attract mainstream borrowers.

The growth of e-commerce and non-cash payments over the coming years will fuel the rise of a different group of alternative small business lenders that pose a more serious threat to banks. These are the digital commerce and payments providers Square, PayPal, and Amazon.

The reason these providers are well-positioned in small business lending is two-fold.

The first reason: These companies already have high brand recognition among small businesses and online retailers.

The second reason that Square, PayPal, and Amazon have the most long-term potential among alternative small business lenders is the data they collect about their merchant clients.

Square, PayPal, and Amazon will look like increasingly enticing credit providers to small businesses if banks don’t take advantage of the opportunity to partner with alternative lending platforms.

 

United Kingdom

UK banks halve property lending in just two years as developers look to peer to peer lenders, (City A.M.), Rated: AAA

According to new data from peer-to-peer property funding platform Saving Stream, bank loans to property developers fell from £32.5bn in April 2014 to £14.9bn in April 2016.

Peer-to-peer lending is now playing a critical role in getting these developments underway,” adds Brooke. “With interest rates on ISAs still bumping along the bottom, the opportunity to get up to 12% returns on a loan secured against property is something a lot of savers are waking up to.”

LendInvest rescues client with three-day bridge, (Bridging and Commercial), Rated: B

The online lender and the master broker worked together for the first time to complete the £1.6m deal afterLendInvest stepped in when another lender had let the client down.

This case just shows what can be achieved when experienced, professional firms come together and work in partnership,” Magnus Duke Dadzie, Senior Business Development Manager at LendInvest, stated.

 

 Germany

Commerzbank will Launch P2P Lending Platform Main Funders Next Week, (P2P Banking), Rated: AAA

At a press conference this morning in Frankfurt, Michael Kotzbauer of Germany’s second-largest bank Commerzbank and Birgit Storz of Main Incubator announced that the new platform Main Funders will launch next week. Main Funders is part of a broader digitalisation strategy of Commerzbank and the first project Commerzbank and Main Incubator built together. Main Incubator previously invested in several Fintech startups.

The aim of the new platform is to bring together SMEs seeking loans in the range of 200K to 10M Euro for up to 5 years and professional investors (institutional and large companies). Both will be already customers of Commerzbank and Commerzbank will make use of its regional sales force to bring borrowers onto the marketplace.

Main funders charges borrowers 0.45% of the loan amount multiplied with the duration and  investors 0.2%.

Unlike on other platforms, investors won’t have to ‘park’ cash to be able to invest but rather will be able to pay for funded loans after all contracts have been signed, an advantage to avoid cash drag.

Main Funders says it is uniquely positioned compared to other p2p lending marketplaces in that it is able to facilitate very large loans and benefits from the relationship and trust Commerzbank already has to target customers.

With Main Funders Commerzbank aims to:

  • increase customer satisfaction
  • strengthen its competitive position
  • react to regulatory requirements
  • create a basis that will allow it to build further innovative loan products upon

Commerzbank is one of the first large banks in the world to have developed its own platform (together with its incubator). Other banks have taken the route to acquire lending startups (e.g. Barclay Africa Rainfin, Westpac with SocietyOne, or Banca Sella at Smava and Prestiamoci). Several banks are investing into consumer and SME loans on p2p lending marketplaces, especially in the US and the UK.

 

Australia

Huddle Money raises m to create peer-to-peer bank, (Financial Review), Rated: A

“We secured our AFSL [Australian Financial Services Licence] and we have the authorisation to deal in insurance and will over time be expanding as all citations to deal in the full suite of peer to peer lending.”

The company says it will do this by challenging existing business models for insurance, investments and loans, and eventually build the world’s first peer-to-peer bank.

The initial insurance offer is more traditional financial services than peer-to-peer, which would involve consumers relying on each other for backing policies, Huddle Money will be selling general insurance products backed underwritten by Hollard.
“When customers buy an insurance policy from AAMI or NRMA it is a bit of a one-way street that most people feel is a product they never actually get anything back from,” he says.
“We are building a reward scheme into this product where customers can actually get cash back and unlock value, but also we are strengthening their financial resilience by increasing their comprehension and education around the products and their financial well-being.”

 

 

George Popescu
George Popescu

About the author

George Popescu

Serial entrepreneur.

George sold and exited his most successful company, Boston Technologies (BT) group, in 2014. BT was a technology, market maker, high-frequency trading and inter-broker broker-dealer in the FX Spot, precious metals and CFDs space company. George was the Founder and CEO and he boot-strapped from $0 to a $20+ million in revenue without any equity investment. BT has been #1 fastest growing company in Boston in 2011 according to the Boston Business Journal and the only company being in top 10 fastest in 2012-13 as it was #5 in 2012. BT has been on the Inc. 500/5000 list of fastest growing companies in the US for 4 years in a row ( #143, #373, #897 and #1270). After the company sale in July 2014 until February 2015 George was Head-of-Strategy for Currency Mountain ( www.currencymountain.com ), a USD 100 million+ holding company focused on retail and medium institutional currencies, precious metals, stocks, fixed income and commodities businesses.

• Over the last 10 years, George founded 10 companies in online lending, craft beer brewery, exotic sports car rental space, hedge funds, peer-reviewed scientific journal ( Journal of Cellular and Molecular medicine…) and more. George advised 30+ early stage start-ups in different fields. George was also a mentor at MIT’s Venture Mentoring Services and Techstar Fintech in NY.

• Previously George obtained 3 Master's Degrees: a Master's of Science from MIT working on 3D printing, a Master’s in Electrical Engineering and Computer Science from Supelec, France and a Master's in Nanosciences from Paris XI University. Previously he worked as a visiting scientist at MIT in Bio-engineering for 2 years. George had 3 undergrad majors: Maths, Physics and Chemistry. His scientific career led to about 10 publications and patents.

• On the business side, Boston Business Journal has named me in the top 40 under 40 in 2012 in recognition of his business achievements.

• George is originally from Romania and grew up in Paris, France.

Add Comment

Click here to post a comment

Your email address will not be published. Required fields are marked *

Testimonials

default image

"Your daily letter is great!" , Ram , Founder and CEO, PeerIQ

default image

"Hi George - just want to tell you that you are doing a great work with Lending Times;-) Brgds, Kasper" , Kasper, Partner and Co-founder at Dansk Faktura Børs A/S

default image

"I've been following your newsletter for some time now and have been very impressed with the content." Charlie,Co-Founder | Bolstr

default image

"Hey George, I must say I really enjoy your site. It has inspired me to do some changes at our platform and we are the biggest consumer lender in Sweden." , Ludwig, CEO @ Savelend Sweden AB

default image

"Your daily email is very useful. It gives quick update on what's going in the market. Thank you very much for all that info." Yann Murciano, Head of Base Metals Trading at Morgan Stanley

Our daily p2p news digest

Daily News Summary Digest Sent Daily To Your Inbox