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Tuesday January 31 2017, Daily News Digest

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United Kingdom

Australia

Middle East

United States

Most Consumers Open to Robo-Only Retirement Advice (Financial Advisor IQ), Rated: AAA

Most people are willing to trust robo-advisors for retirement planning and investment advice, but the majority also want human interaction when it comes to more complex tasks, according to a new survey from consulting firm Accenture.

Sixty-eight percent of people are open to robo-only advice for retirement planning and 78% say they’d welcome it for investing advice, according to a survey of close to 33,000 consumers, of which close to 10,000 were working with a professional wealth or asset manager, in 18 countries and regions conducted in May and June by Accenture.

Nonetheless, Accenture also found that 38% of consumers would switch to Google, Amazon or Facebook for financial advice services, while only 31% would go to one of the tech giants for banking and 29% for insurance.

Morningstar Corporate Credit Research Highlights (Morningstar), Rated: AAA

morningstar credit rating actions

The levels in the corporate bond markets are the tightest that credit spreads have registered since the fall of 2014 and are significantly tighter than their long-term averages. The average spread of the Morningstar Corporate Bond Index is 42 basis points tighter than its long-term average of +168 since the end of 1998. The average spread of the Bank of America Merrill Lynch High Yield Master Index is currently 187 basis points tighter than its long-term average of +580 basis points since the end of 1996.

morningstar corporate bond credit spread

Currency Capital grabs funding from Lovell Minnick Partners (PE Hub), Rated: A

Lovell Minnick Partners, a private equity firm specializing in financial and related business services companies, today announced that it has made a growth capital investment in Currency Capital, LLC, an online equipment financing exchange serving owners of small- and medium-sized companies. The investment will support Currency Capital’s growth strategies. Financial terms of the private transaction were not disclosed.

With Currency Capital, borrowers are provided with unparalleled, instant access to financing options from hundreds of lenders with “one click,” making the entire application, selection, approval and funding process simple and transparent.

Currency Capital provided approximately $150 million in loans to customers in 2016. Equipment buyers are also able to purchase equipment for sale by the Company’s industry-leading partners: eBay, Big Tex Trailers, IronPlanet and Proxibid.

Nyca Partners Raises $ 125M For Second FinTech VC Fund (PYMNTS.com), Rated: B

Nyca Partners, the venture capital firm focused on the FinTech market, raised $125 million for a second fund. According to a report, Hans Morris, the former Visa president turned venture capitalist, created Nyca Partners in 2014, launching a $30 million fund. The fund invested in a slew of FinTech startups, including Lending Club, SigFig and Orchard. The new fund, which includes 10 institutional investors and 29 limited partner advisors, has made investments in about a dozen startups, including Embroker and Ladder, two insurance FinTechs.

United Kingdom

Will the UK Retain the Fintech Crown? (Crowdfund Insider), Rated: AAA

The change in government, and the ramifications of the Brexit decision, has clearly stressed the UK’s prominence in innovative finance. Continental Europe is attempting to take advantage of the decision to depart Europe and Asian business centers, like Singapore and Hong Kong, are seeking to claim the Fintech crown.

Roche-Saunders is a partner at the firm of Bates, Wells & Braithwaite in London, where she manages their financial services regulatory consultancy.

Crowdfund Insider: 2016 was a choppy year for some Fintech/Crowdfunding platforms.

Gillian Roche-Saunders: 2016 was a year of highs and lows, and I think it’s fair to say the lows have received more press.

One of my key takeaways from the year is how crowdfunding now feels established as an alternative source of capital.

Crowdfund Insider: What about Peer to Peer lending platforms? You predicted last year there would be more robust rules for online lenders like the handling of client money, vetting, and wind downs. Is that still going to occur?

Gillian Roche-Saunders: What I didn’t predict was that there could be such a disconnect over the definition of peer-to-peer lending activity.  The Treasury drafted article 36H specifically to capture the peer-to-peer lending industry’s activities, yet we’ve spent much of the year debating with the FCA whether the industry is actually undertaking that same activity.  It could sound like quite a dull and technical debate until you realise that only article 36H loan agreements can go into the Innovative Finance ISA.  The knock-on effects of the FCA and Treasury not being joined up on this point are significant for consumers and platforms.   

Crowdfund Insider: How is the current political environment for Fintech? Does the government embrace the strategic importance of Fintech for the UK innovation economy?

Gillian Roche-Saunders: If you’d asked me a year ago I would have said that political support was beyond dispute.  We had the best ecosystem for Fintech with a regulator and government behind it 100%.  I still think we’re heading in the right direction, and let’s not forget it’s been quite a year for the UK, but it does seem as if the government has taken their foot off the Fintech pedal.

Crowdfund Insider: Are you seeing additional Brexit driven concern for Fintech firms? Anyone moving to Paris or Berlin?

Gillian Roche-Saunders: There continues to be a lot of chatter about the Brexit risk, and comments that we will see our talent and companies move abroad.  Anecdotally, we have seen the opposite.  

As for UK companies, the impact of Brexit will vary depending on the client base.  Institutionally focused players, like enterprise tech and Regtech firms, may find their client base moving overseas and need to follow. The challenges in operating in a truly cross-border way have meant that crowdfunding hasn’t been reliant on Europe and that is likely to insulate the industry now.

Crowdfund Insider: What are your predictions for 2017 regarding alternative finance? Another year of growth & innovation or consolidation?

Gillian Roche-Saunders: It’s stating the obvious but 2017 will be the year of the Innovative Finance ISA.  Many firms have been laying the groundwork on that for quite some time but we’ve seen a real spike in activity since autumn.

We can certainly expect more innovation generally.  As platforms continue to compete for profile and customers, new opportunities to differentiate will be taken up.  It will be interesting to see if there is more cross fertilisation between the lending and investment models. We’ve advised clients to focus on one route or another initially – the FCA may treat both sectors under the broad church of crowdfunding but the models are very different – but this year may be the first time when bringing together both under one roof makes sense.

I would expect moves towards consolidation too.

Crowd2Fund to offer P2P white label product (P2P Finance News), Rated: A

CROWD2FUND is rolling out a white label solution for institutions wishing to expand into peer-to-peer lending.

The platform, which is one of only four P2P lenders to offer the Innovative Finance ISA, is already in talks with potential partners.

Institutions – such as investment firms – will be able to use Crowd2Fund’s “Powered by” feature to operate as a P2P platform under their own brand. Crowd2Fund says it has already seen “significant demand” from institutions looking to leverage their customer base, although it declined to name which ones.

Financial technology firm Orca in £280,000 seed funding boost (The Irish News), Rated: A

BELAST-based fintech company Orca Money has raised £280,000 seed capital which it will use to build on it peer-to-peer lending focused financial media site Orca Retail, launched a year ago.

The alternative finance market has continued to flourish in the UK, with the peer-to-peer lending market growing to £3.13 billion last year and featuring more than 177,000 investors.

A third product, Orca Investments, will be launched early 2018 allowing retail investors and IFAs to invest in a diversified fund, comprised of peer-to-peer investments.

Australia

Peer-to-peer lenders lead increase in personal loans (The Sydney Morning Herald), Rated: AAA

The latest Quarterly Consumer Credit Demand Index from credit agency Veda shows the number of personal loan applications for the December 2016 quarter was 12.4 per cent higher than the December 2015 quarter.

There was a significant pick-up in the growth of personal loan applications in all states and territories, led by NSW and the Northern Territory with an increase of 14.5 per cent, Queensland with 13.1 per cent and Victoria with 12.5 per cent.

Overall consumer credit applications are up 7.7 per cent, with credit card applications rising 3 per cent and mortgage applications up 6.6 per cent.

However, the Veda figures reveal wide geographic variations with mortgage applications.

They were 14.9 per cent higher in the Australian Capital Territory, 11.2 per cent higher in Tasmania, 10.6 per cent higher in Victoria and 9.6 per cent higher in NSW.

However, in Western Australia, applications were 10.6 per cent lower and 10.8 per cent lower in the Northern Territory.

p2p consumer credit applications

Middle East

Treasury plans law on peer-to-peer lending (Haaretz), Rated: A

Israel’s Finance Ministry released a draft version of a proposed law Monday that would encourage online peer-to-peer lending by creating a regulatory framework for it. The new law will also create protections for the people lending money through P2P websites, as well as for the borrowers – a move the treasury hopes will give the nascent industry more legitimacy and enable it to become a more serious competitor to the banks and credit card companies.

The Capital Markets Authority will be responsible for enforcing the proposed regulations.
read more: http://www.haaretz.com/israel-news/business/1.768624

Authors:

George Popescu
George Popescu
Allen Taylor
Allen Taylor

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Allen Taylor

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