- Today’s main news: Investors pressure OnDeck to make bigger expense cuts. LendingClub celebrates 10 years in business. Zopa launches ISA. Earnest is not for sale, after all. Orca to launch new P2P rating service. Moody’ downgrades China on debt risk. The first ETF for ABS.
- Today’s main analysis: Orchard Platform reports Q1 results.
- Today’s thought-provoking articles: 10 years of excellence & innovation. German RECF, green crowdfunding legislation.
- OnDeck under pressure to cut expenses even more. GP:”In my experience you often have to cut more then you think you need as there are never good surprised in this direction and revenue is often impacted as well when you cut. “AT: “I’m on the edge of my seat to see what happens to OnDeck.”
- LendingClub celebrates 10 years of online lending. GP:”I hope they are throwing a big party! 10 years is a milestone. 10 years proves there is a real market or the company wouldn’t have survived 10 years. “AT: “It will be interesting to see what the next decade holds for this leader in online lending, and for the industry itself as it continues to mature.”
- 10 years of excellence and innovation. GP:”Some great Lending Club milestones and numbers. I hope they are throwing a big party!”AT: “From LendingClub’s own perspecive, this timeline of events in the company’s history is a must-read.”
- Thank you for 10 years. AT: “Adds additional perspective to LendingClub’s accomplishments.”
- Orchard Platform Q1 2017 results. GP:”The charge off rates continue to worsen. Very alarming.”AT: ‘The charts say it all. I’m particularly excited about the borrower interest rates by FICO chart. The highest interest rate, lowest FICO score, has dropped significantly since Q2 2014 and precipitously from Q2 2016.”
- With an asset-backed debt ETF, the bet is if you can pay what you owe. GP:”The ETF has fees, the ABS has fees, the origination has fees. 3 levels of fees. I wonder why would anybody invest in an ETF on ABS on online origination when they can go straight to the source.”AT: “The first ETF to target the ABS market.”
- Payoff: Personalized financial coaching app for women.
- Earnest is not for sale, after all. GP:”When you try to sell a company you want to control the image and the perception of the seller’s motivation. If a journalist breaks the news that your company is for sale it sounds like a desperate sale. Therefore the best thing to do is to deny it and … stop the selling process. Unless of course Ernest really wasn’t for sale, but lets assume there is no reason for a journalist to make up that story. In all cases, when you actively try to sell a company like Ernest it’s not possible for the rumor to get out. ” AT: “Was this misreported, or did they change their mind? It’s not clear.”
- Zibby raises $13.5M. GP:”Congratulations!”
- Blispay raises $12M. GP:”Congratulations!”
- Frost & Sullivan commends AutoGravity for transforming auto financing. AT: “Read our featured analysis on how AutoGravity streamlines the auto financing industry.”
- FinTech tools that can change the world.
- FinTech reinvents lottery bonds. GP:”Many economist always recommended that you should turn your savings account into a lottery ticket proportional to the balance in order to encourage savings. I really believe in this idea as well. If only I was running a bank… “
- The GAO report on FinTech. GP:”Government Accountability Office (GAO) published a report on Financial Technology, or Fintech, for Congress this past April.”
- Ann Fulmer joins FormFree.
- New fiduciary rule for financial advisors expected to go into effect.
- How small businesses can benefit from loyalty programs.
- Zopa launches ISA. GP:”This is a great tool to get more lending capital. But I remember not that long time ago Zopa had too much lending capital. I wonder what changed. Perhaps the lending capital via the ISA is cheaper then the non-ISA one?”
- Orca to launch new rating service for P2P providers. GP:”We look forward to an objective , transparent and useful rating service.”
- ArchOver granted full FCA authorization. GP:”A series of companies have obtained FCA authorization lately. Way to go! UK’s P2p is going strong.”
- MW Eaglewood to merge with Pollen Street Capital. GP:”An interesting move which leads to the question: why is Eaglewood doing this merge and is it a real merge or an acquisition described as a merger?”
- Should more bridging lenders launch mobile apps? AT: “At this point, I don’t know why any lender wouldn’t want to launch a mobile app.”
- Are FinTechs a real alternative to banks?
- Moody’s downgrades China on debt risk. GP:”Unclear if this will have a real effect on the capital markets but it will certainly anger the Chinese government. If I were the Chinese government I would setup my own rating agency and build it into a real credible agency and not a government puppet so that the day when I need my own rating agency to maybe skew a little bit the ratings it will be credible enough.”
- Chinese investors among majority of EB-5 visa recipients. AT: “It’s not surprising. One reason cited in this story is the harsh treatment offered to Christians by the Chinese government, so many of these families are using financial concerns as a cover up for religious oppression concerns. Both are legitimate.”
- Ant Financial close to buying MoneyGram.
- How to make in FinTech as a woman.
- Peter Leonidou leaves Leverate to head early-stage FinTech.
- United States
- OnDeck under pressure to make bigger cuts to cost base (Financial Times), Rated: AAA
- LendingClub Celebrates Ten Years of Online Lending (Crowdfund Insider), Rated: AAA
- 10 Years of Excellence & Innovation (LendingClub), Rated: AAA
- Thank you for 10 years (LendingClub Email), Rated: AAA
- Consumer Unsecured Q1 2017 (Orchard Platform), Rated: AAA
- With an Asset-Backed Debt ETF, the Bet Is If You Can Pay What You Owe (Bloomberg), Rated: AAA
- Futuristic Fintech, With a Female Focus (WSJ), Rated: A
- Earnest Not for Sale. Securitization is Moving Forward (Crowdfund Insider), Rated: A
- Zibby Announces $ 13.5 Million Investment led by CURO Financial Technologies Corp. and MissionOG (LendIt), Rated: A
- Baltimore fintech startup Blispay raises $ 12 million (Baltimore Sun), Rated: A
- Frost & Sullivan Commends AutoGravity for Transforming Automotive Financing Industry (Frost & Sullivan), Rated: A
- Fintech Tools That Can Change The World Of Finance (Forbes), Rated: A
- Fintech reinvents lottery bonds (Financial Times), Rated: A
- Here is the GAO Report on Fintech that was Delivered to Congress (Crowdfund Insider), Rated: B
- Ann Fulmer Joins FormFree as Chief Strategy and Industry Relations Officer (PR Newswire), Rated: A
- New fiduciary rule for financial advisers expected to go into effect in June (Pittsburgh Post-Gazette), Rated: B
- How Small Businesses Can Benefit from Loyalty Programs (Kabbage), Rated: B
- United Kingdom
- Zopa announces ISA launch (Finextra), Rated: AAA
- UK P2P Lending Market Researcher Orca Dives into P2P Provider Rating Services (Crowdfund Insider), Rated: AAA
- P2P lender ArchOver granted full FCA authorisation (Finextra), Rated: A
- M&A hits Alternative Credit: MW Eaglewood to merge with Pollen Street Capital (AltFi), Rated: A
- Should more bridging lenders launch mobile apps? (Bridging&Commercial), Rated: A
- Are FinTech brands a real alternative to traditional banking? (The River Group), Rated: A
- China Hit by First Moody’s Downgrade Since 1989 on Debt Risk (Bloomberg), Rated: AAA
- Chinese Investors Among Majority Of EB-5 Visa Recipients (NPR), Rated: A
- European Union
- Narrow Escape for German RECF, Green Crowdinvesting Now in Legislator’s Crosshairs (Crowdfund Insider), Rated: AAA
- Ant Financial close to buying MoneyGram (New York Post), Rated: AAA
- How to Make it as a Woman in FinTech: “Don’t Wait to Become a Leader” (Finovate), Rated: A
- Peter Leonidou Parts Ways with Leverate to Head Early-Stage Fintech Firm (Finance Magnates), Rated: B
- FinTechs Afterpay, Ratesetter and Society One pick up Finnie awards (Mozo), Rated: AAA
- Startup Insurance Company Acko General Insurance Raises $ 30M (IndianWeb2), Rated: A
- The first Internet life insurance company and Thai life opened (STCN), Rated: AAA
- Middle East
- Dubai Regulator Launches Special Testing Licensing for Fintech Startups (Finance Magnates), Rated: A
OnDeck under pressure to make bigger cuts to cost base (Financial Times), Rated: AAA
Activist investors are turning up the heat on OnDeck, the online lender, which said this month it would curb originations and cut costs in an attempt to turn a profit by the end of the year.
The company still needed to think bigger, according to Mario Cibelli, managing partner at Marathon Partners Equity Management, who wrote to board members in April urging them to take an axe to the $194m annual cost base and explore a sale of the business. Net revenues, after loan-loss provisions and funding costs, came to $109m last year.
Pressure on OnDeck is likely to come from other quarters too. EJF Capital, an activist investor, has built a stake equivalent to about 9 per cent of the shares outstanding since the turn of the year, according to disclosures tallied by Bloomberg. In February the Arlington, Virginia-based group, which ranks as OnDeck’s second-largest shareholder with more than 9 per cent, said it may seek talks with management.
LendingClub Celebrates Ten Years of Online Lending (Crowdfund Insider), Rated: AAA
LendingClub (NYSE:LC), the largest marketplace lender in the US, is celebrating its tenth anniversary. It is pretty hard to believe that LendingClub is now ten years old.
To paraphrase the LendingClub history:
- Within the first 100 days of its existence, LendingClub originated its first $1 million in loan. The average interest rate, at that time, stood at 12.6%. By the end of 2007, LendingClub had originated about 500 loans for a total of $3.5 million.
- In 2010, LendingClub originated $10 million in a single month.
- By 2012, LendingClub has originated $1 billion loans as institutional money becomes more interested in the Fintech platform. The following year, the first banks start investing on the LendingClub platform.
- In 2014 Lending Club launched its IPO – the second largest for the year.
- By 2017, LendingClub has originated more than $26 billion in loans as it enters the next decade of financial innovation.
10 Years of Excellence & Innovation (LendingClub), Rated: AAA
- 2007 By August, the LendingClub website launches. By year’s end, approximately 500 loans worth over $3.5 million are made.
- 2008 The subprime mortgage crisis spreads; global markets sell off and the Great Recession takes hold. Despite the chaos and potential risk of halting its burgeoning business, LendingClub demonstrates its commitment to working with regulators, entering a six-month quiet period to register with the SEC and prepare to issue a security (the Note) that can be offered and sold to investors through its website.
- 2009 LendingClub continues to stay focused on the opportunity to deliver investment alternatives to investors and introduces LendingClub IRAs to allow investors to use the platform to work toward their retirement goals.
- 2010 Propelled by its SEC registered Notes and a robust investor base, LendingClub crosses $100 million in loans and 10,000 borrowers in the first quarter. By March, the company captures 79% of the U.S. marketplace lending market after facilitating $8,664,750 in monthly loan originations.
- 2011 LendingClub continues to innovate on its borrower and investor offerings, surpassing $200 million in loans for borrowers at the beginning of the year.
- 2012 In 2012 alone, U.S. banks close 2,267 branches and approve a record-low 14.8% of small business loan requests. LendingClub is named to the World Economic Forum’s Technology Pioneers 2012 list and originations top $1 billion.
- 2013 LendingClub welcomes its first bank investor partners to the platform – Titan Bank and Congressional Bank.
- 2014 A big year for tech IPOs, LendingClub is one of the biggest of the year, coming in second to Alibaba and listed on the NYSE alongside others, including Virgin America and GoPro.
- 2015 Big banks continue to cut back on loans to small businesses, making it difficult for them to get access to credit. LendingClub becomes a founding member of the Small Business Borrower’s Bill of Rights and expands small business products to include a small business line of credit.
- 2016 LendingClub launches its auto refinance product, delivering a lower-cost alternative to car owners.
- 2017 LendingClub looks toward a new decade of financial innovation, leveraging the power of its marketplace model to deliver more value to both borrowers and investors. An investor mobile application is launched, making it easier than ever for retail investors to track their progress.
Thank you for 10 years (LendingClub Email), Rated: AAA
From the LendingClub newsletter:
Over the past 10 years, you have helped power the loans facilitated by LendingClub’s platform for borrowers looking to finance their financial lives. Together, we have helped nearly 2 million borrowers access affordable credit. That means we’ve helped finance debt consolidation, home improvement projects, medical expenses and weddings for millions of people in the United States.
- More than 160,000 retail investors have gotten unprecedented access to invest in consumer credit through LendingClub’s platform
- Nearly 2 million borrowers have gotten access to affordable credit through LendingClub’s marketplace
- 98% of investors who invest in 100+ Notes of relatively equal size have seen positive returns
- 1,700 loans are reviewed per day, and more than 50,800 loans per month
- Loans receive full commitment in 3-4 days on average
- Auto refinance customers saved an average of $1,500
- Borrowers pay 24% lower in interest than they were paying on their outstanding debt or credit cards
- 73% of borrowers experience a FICO score increase three months after obtaining their loan–with an average score increase of 28 points!
Consumer Unsecured Q1 2017 (Orchard Platform), Rated: AAA
- Origination volume increased in Q1, continuing the trend that began last quarter. Q1 origination volume was up 4.6% from Q4, though still down 44% from Q4 2015, when the market reached its highest originations. Early indications in 2017 are that investor sentiment is improving, and we believe we’re likely to see increased investment over the next quarter.
- 2014 and 2015 vintage charge-offs have increased more steeply than in prior years. We believe there are two main sources driving this increase. First, individual platforms have shown increasing charge-offs during these years. We do not have strong evidence of the reasons for this deterioration, but in recent months, some of the larger platforms have reworked their credit models which they believe should address the increases they have seen. Second, and also important to note, is that 2014 and 2015 vintages experienced substantial growth in subprime originations, which tend to charge-off at higher rates. The increase in subprime loans as a percentage of the overall market skews the results for recent years upward when compared with the originations from previous years that had a smaller percentage of subprime loans.
- Borrower rates rose slightly in Q1, increasing 24bps from Q4 levels. The long-term trend over the last three years has been decreasing interest rates, in part driven by the decline of subprime originations in the past year. This will be an interesting statistic to monitor in the coming year as the Fed continues to raise interest rates in line with their tightening policy.
With an Asset-Backed Debt ETF, the Bet Is If You Can Pay What You Owe (Bloomberg), Rated: AAA
BlackRock Inc.’s planned iShares Consumer Asset-Backed Securities ETF will invest in notes supported by consumer loans, such as student debt and credit cards, according to a regulatory filing on Friday. If approved, it will be the first ETF to target the ABS market.
Consumer debt has ballooned in recent years as Americans ramp up borrowing and capitalize on historically low interest rates. Household debt topped $12.7 trillion in the first quarter, up 1.2 percent from the end of 2016. Signs of trouble are however brewing, with suspicions of fraud in some auto loan applications, a decline in credit-card recovery rates and an increase in late payments on private student loans.
Futuristic Fintech, With a Female Focus (WSJ), Rated: A
SCOTT SAUNDERS, CEO of the online lending company Payoff, did not set out to build a personalized financial coaching app for women. In 2014, he began assembling a team that eventually included a cognitive neuroscientist, a marketer, an advertising executive and the data scientist behind eHarmony’s match algorithm. The goal: to build an app that used psychological testing to match users of both genders with artificially intelligent financial coaches. By focusing on the intersection of money and psychology, Saunders hoped to minimize financial stress and maximize the pleasure users get from spending and saving.
Earnest Not for Sale. Securitization is Moving Forward (Crowdfund Insider), Rated: A
Last week, Crowdfund Insider referenced a report in Bloomberg that Earnest was looking for buyers as it struggled to raise new funds. A company representative has now stated that Earnest is not looking to sell the company.
Zibby Announces $ 13.5 Million Investment led by CURO Financial Technologies Corp. and MissionOG (LendIt), Rated: A
Zibby, the omnichannel lease‐to‐own payment option for online and in‐store shopping, today announced a $13.5 million investment led by CURO and MissionOG, with participation from Blumberg Capital, Tribeca Venture Partners and other institutional investors. This brings Zibby’stotal capital raised to more than $150 million. With the investment, Zibby will further expand its presence among retailers to offer non‐prime and near‐prime customers a monthly payment option for furniture, appliances, electronics and other consumer durables.
Baltimore fintech startup Blispay raises $ 12 million (Baltimore Sun), Rated: A
Blispay, a Baltimore-based financial technology company, has raised $12 million to accelerate the marketing and sales outreach for its financing platform.
The Series A round was led by FirstMark, Accomplice and NEA. New investors included Camden Partners and F-Prime Capital. The round brings the company’s total funding to just under $25 million.
Frost & Sullivan Commends AutoGravity for Transforming Automotive Financing Industry (Frost & Sullivan), Rated: A
Based on its recent analysis of the automotive financing industry, Frost & Sullivan recognizes AutoGravity with the 2017 North American Frost & Sullivan Entrepreneurial Company of the Year Award. AutoGravity’s first-of-its-kind FinTech platform empowers car buyers to browse any new or used car, get multiple binding financing offers in minutes and select the deal and lender that’s right for them. Just months after launching its native mobile app in the summer of 2016, AutoGravity introduced new car leasing and used car loan features with the aim of transforming the auto financing industry.
While simplifying the financing process for customers, AutoGravity’s app also saves dealers the effort of educating customers on various models and financing options. Additionally, it saves time by eliminating the need to apply for financing at the dealership and process pages of paperwork. Most significantly, it supports dealers by providing them with qualified, enthusiastic car buyers.
Currently, AutoGravity has 60+ employees, and has recorded 350,000 app downloads in just one year. It has expanded to 48 states in the United States and has on-boarded many of the nation’s top-20 automotive lenders, as well as 1,500+ dealers. Due to these successes and its ability to break new ground in the auto financing industry, Frost & Sullivan is pleased to present AutoGravity with the 2017 North American Entrepreneurial Company of the Year Award.
Fintech Tools That Can Change The World Of Finance (Forbes), Rated: A
According to an EY study last year, fintech is growing in popularity, with roughly 15.5% of digitally active consumers using financial tech products — a figure that was likely to double within 12 months. The United States had the second-highest adoption rate of fintech tools (16.5%), following Hong Kong with 29.1%.
- 1. Artificial Intelligence – Fenergo deploys A.I. to analyze unstructured data, including social media, intracompany communication and linguistics in order to more effectively satisfy Know-Your-Customer and Anti-Money-Laundering requirements. – Jason Lee, DailyPay
- 2. Peer-To-Peer And Apple Pay
- 5. Riskalyze, RetireUp and Asset-Map – Riskalyze provides a user-friendly and client-facing software that allows us to tell the story of risk, which we believe is crucial for an investor to understand in order to have success. RetireUp, a user-friendly income planning tool, and Asset-Map offer very visual understandings to clients on where they stand when it comes to their finances. – Lance Scott, Bay Harbor Wealth Management
- 7. PeerStreet And WorldRemit – Services like WorldRemit are empowering immigrants with better choice, security and transparency in sending money back home to their loved ones. – Binna Kim, Vested
- 8. Faster Payment Rails – Our old ACH network is improving. Instead of settling payments once per day, as it has for decades, it will start to settle multiple times per day. This will improve settlement success rates and prevent e-check kiting. Coming right behind this improvement are a number of real-time payment initiatives. – Charlie Youakim, Sezzle
- 9. Decision Logic – I’m excited about Decision Logic because it provides lenders the ability to verify a borrower’s sensitive information and understand their borrower’s financial history. – Chad Otar, Excel Capital Management, Inc.
- 10. Peer-To-Peer Lending
- 11. Robo-Advisers
- 12. Greenlight – I just got my ten-year-old daughter a Greenlight card. It allows me to automate her allowance and potentially control the spaces where she spends money. – Matthew May, Acuity
Fintech reinvents lottery bonds (Financial Times), Rated: A
Silicon Valley entrepreneurs have a knack for taking old things and making them look new. The latest example of which is Long Game, which TechCrunch tells us is “a bank account, with a twist”:
The personal finance app allows users to play games and win cash prizes up to $1 million. It may sound like a gimmick, but these are FDIC-insured accounts backed by Blue Ridge Bank in Virginia.
In addition to the possibilities of cash rewards, users accrue .1 percent interest. She hopes that participants will take saving seriously and view the games as a bonus.
While Long Game touts the $1 million prize possibility, so far the largest check they’ve written is $1,000. Like the actual lottery, it’s an odds-based game and the chances of the app making you a millionaire are 1 in 227 million.
Here is the GAO Report on Fintech that was Delivered to Congress (Crowdfund Insider), Rated: B
This one falls under recently discovered. The Government Accountability Office (GAO) published a report on Financial Technology, or Fintech, for Congress this past April.
The GAO explained;
“You asked us to provide information on the fintech industry, including the marketplace lending subsector, such as its structure and development over the last several years, as well as how federal regulators supervise fintech firms. This report, the first in a series of planned reports on fintech, describes four commonly referenced subsectors of fintech: marketplace lending; mobile payments; digital wealth management; and distributed ledger technology and their regulatory oversight.”
Ann Fulmer Joins FormFree as Chief Strategy and Industry Relations Officer (PR Newswire), Rated: A
FormFree today announced that it has hired mortgage loan quality subject matter expert and analyst Ann Fulmer as its chief strategy and industry relations officer. FormFree’s flagship product, AccountChek, is an asset verification app that streamlines the loan underwriting process for both borrowers and lenders, resulting in higher borrower satisfaction and shaving more than a week off the time it takes to close a loan.
In her role, Fulmer will drive FormFree’s strategic planning and implementation, manage the firm’s institutional relationships and interactions with federal and state regulators and oversee outreach to industry associations and advocacy groups. In addition, she will spearhead the firm’s long-term development of a comprehensive mortgage compliance solution.
New fiduciary rule for financial advisers expected to go into effect in June (Pittsburgh Post-Gazette), Rated: B
Secretary of Labor Alexander Acosta on Tuesday made it clear that the U.S. Department of Labor would not delay the implementation of the rule, announcing the agency’s intentions in a Wall Street Journal opinion column.
Tuesday’s announcement that the rule is going forward may not be the end of the discussion.
How Small Businesses Can Benefit from Loyalty Programs (Kabbage), Rated: B
Almost all companies find that they have to spend less money to keep customers than they have to spend to attract new people through the door or to their shopping website. Some companies may access small business loans for their initial investment. They understand that they can benefit from this investment because it provides them with an efficient way to market. The extra profits will allow them to pay the loan back and keep more for themselves.
Zopa announces ISA launch (Finextra), Rated: AAA
Zopa, the pioneering financial services company, announces today that it will launch its Innovative Finance ISAs in June (pending HMRC approval). With demand expected to be high, existing customers will be given priority access ahead of new customers.
In preparation for the Innovative Finance ISA, Zopa is also revamping its investor products by introducing Zopa Core and announcing the retirement of Zopa Access and Classic. Investors in Zopa Core will lend in the same risk markets as Access and Classic (A*-C) but will not be covered by the Safeguard fund. Zopa Core will offer a higher target return of 3.9% after fees and expected credit losses, as compared to 3.7% and 2.9% for Classic and Access.
The Innovative Finance ISA will be launched in four phases:
1. The first stage (from 15th June) will be focused on existing customers who want to open a new IFISA (limit of £20,000) and lend through Core and Plus.
2. The second stage (1st July 2017 to 31st July 2017) will enable existing customers to sell their current loans and re-purchase similar loans in an IFISA wrapper. This will allow investors to retain Safeguarded loans in the IFISA. Any investing through new lending, or relending as capital is returned, will be onto Plus or Core only.
3. The third stage (from August 2017, but dependent on meeting demand for new IFISAs) will allow existing customers to transfer existing ISA investments with other providers to Zopa.
4. And finally, once we have met demands of existing customers, we will welcome investments from new customers.
UK P2P Lending Market Researcher Orca Dives into P2P Provider Rating Services (Crowdfund Insider), Rated: AAA
Orca, an independent data, research and analysis providers on the UK P2P lending market has announced its plans to launch its own four-factor rating service for individual P2P providers, the Orca Rating. The rating will be designed in partnership with Dublin City University’s Irish Centre for Cloud Computing and Commerce research team, to respond to the growth of the asset class and the demand for more independent analysis and information on P2P lending.
The Orca rating will individually analyze four factors — performance, liquidity, operator health and security — aiming to go beyond existing single platform ratings and enable advisers and investors to assess all fundamental criteria at once when comparing and choosing P2P lending platforms.
According to Orca data, the P2P market has now surpassed £9B cumulative total lent with 2016 alone seeing a 40% increase in investment in the asset class.
P2P lender ArchOver granted full FCA authorisation (Finextra), Rated: A
ArchOver, the peer-to-peer (P2P) business lending platform, has secured full authorisation from the Financial Conduct Authority (FCA) to operate as a P2P lending platform (Article 36H).
The respective managers of the £822m P2P Global Investments and the £200m HoneyComb investment trusts will merge, creating one of the largest specialist asset management firms focused on non-bank lending.
MW Eaglewood and Pollen Street Capital, the respective two parties, are under discussion as to adjustments to their mandates but Lindsey McMurray, managing partner of Pollen Street, will become head of the new firm which will be called Pollen Street Capital.
P2P Global Investments is the largest closed-ended fund investing in non-bank lending in the UK, having launched three years ago. While, as its name suggests, it originally was a vehicle for exposure to the P2P and marketplace lending market it has moved more into niches within the alternative Credit spectrum in recent months.
Should more bridging lenders launch mobile apps? (Bridging&Commercial), Rated: A
The comments follow the news that bridging lender Henley Finance will be releasing its first app on 1st June in order to make applying for finance easier.
Are FinTech brands a real alternative to traditional banking? (The River Group), Rated: A
Now, mobile banking has been a ‘thing’ for more than a decade and, according to research by ING, 55 per cent of us in the UK are managing our finances this way, with a further rise of 12 per cent expected this year.
Atom pitches itself as so customer-centric that you can personalise the app and actually choose the colours of the logo and how the name of your bank appears on your phone. Its tone is highly conversational, quirky without seeming unprofessional.
Atom pitches itself as so customer-centric that you can personalise the app and actually choose the colours of the logo and how the name of your bank appears on your phone. Its tone is highly conversational, quirky without seeming unprofessional.
Whereas traditional banks are still perceived as slow, Monzo demonstrates the speed of its technology.
Both businesses are inviting collaboration to help develop their services – Monzo through sharing its API so customers can build apps using their own data, and Atom through inviting members to join its community.
China Hit by First Moody’s Downgrade Since 1989 on Debt Risk (Bloomberg), Rated: AAA
Moody’s Investors Service cut its rating on China’s debt for the first time since 1989, challenging the view that the nation’s leadership will be able to rein in leverage while maintaining the pace of economic growth.
Stocks and the yuan slipped in early trading after Moody’s reduced the rating to A1 from Aa3 on Wednesday, with markets paring losses in the afternoon. Moody’s cited the likelihood of a “material rise” in economy-wide debt and the burden that will place on the state’s finances, while also changing the outlook to stable from negative.
Total outstanding credit climbed to about 260 percent of GDP by the end of 2016, up from 160 percent in 2008, according to Bloomberg Intelligence. At the same time, China’s external debt is low by international standards, at around 12 percent of gross domestic product, according to the International Monetary Fund, meaning that a downgrade isn’t likely to be as disruptive as it would be for nations more reliant on international funding.
While China’s debt risks have been swelling for years, the cut by Moody’s comes as some of those pressures ease. Nominal economic growth in the first quarter rose at the fastest pace since 2012 — 11.8 percent in current-price terms — making the problem of excess leverage a little more manageable, while the return of factory price inflation is beefing up profits for indebted state-owned industries, helping them service and repay loans.
Moody’s lowered China’s credit-rating outlook to negative from stable in March 2016, citing rising debt, falling currency reserves and uncertainty over authorities’ ability to carry out reforms. About a month later, S&P Global Ratings also warned that rising local debt was pressuring the nation’s rating.
S&P currently rates China’s foreign and local-currency long-term debt at AA- with a negative outlook, and Fitch places an A+ rating on both foreign and local currency long-term debt with a stable outlook.
Chinese Investors Among Majority Of EB-5 Visa Recipients (NPR), Rated: A
The EB-5 visa grants permanent U.S. residence to anyone investing a half million dollars in a U.S.-based development project. Eighty percent of EB-5 recipients are Chinese.
WANG: (Through interpreter) Actually, everyone I know has applied for EB-5s. We’re just ordinary people. We’re not wealthy.
WANG: (Through interpreter) I’m only doing this for my son’s education. He is in a good local school, but all they do is study for tests. The Chinese education system turns everyone into the same type of person.
Narrow Escape for German RECF, Green Crowdinvesting Now in Legislator’s Crosshairs (Crowdfund Insider), Rated: AAA
The Financial Committee therefore rejected the proposal to extend the prospectus exemption of crowdinvesting ‒which currently applies only to the suboptimal shareholder loans, to all securities, including equity shares. The committee also concluded against raising the threshold of fundraising requiring a prospectus from €2.5 million to €5 million, and in favor of keeping the crowdinvesting ceiling per project per retail investor at €1,000 (€10,000, if qualified investor).
On one issue, however, the German crowdfunding sector breathed a sigh of relief: the proposal made by credit institutions to exclude real estate crowdfunding from the KASG has been taken off the table.
The opponents to real estate crowdfunding had alleged that real estate should be excluded from the crowdfunding exemptions because real estate projects did not foster innovation, as projects in crowdfunding should, and because crowdfunding them could trigger to a real estate bubble. These arguments were successfully rebuffed.
Next to real estate, green Crowdinvesting is also a very successful branch of German crowdinvesting. Its most common form is the refinancing of existing renewable energy (photovoltaic, wind and bioenergy) plants through platforms such as fairzinsung, Greenvesting, GreenXmoney LeihDeinerUmweltGeld und Wiwin. The yield is guaranteed by feed-in tariffs. Other platforms, such as Bettervest, specialize in energy-efficiency projects. Several, such as ecoligo facilitate investments in renewable energy in developing countries. Many of the platforms are not only financial brokers between issuers and investors, they are also expert advisors, shareholders, or service operators for the issuers.
In the eyes of the legislator, human or capital ties between issuers and platforms pose a risk of conflict of interest and should be forbidden. According to the committee, a platform tied to an issuer would not be able to vet its projects with the necessary objectivity, hence would not properly defend the interests of the investors.
Ant Financial close to buying MoneyGram (New York Post), Rated: AAA
Chinese billionaire Jack Ma’s Ant Financial is moving closer to getting regulatory approval to buy MoneyGram, The Post has learned — despite concerns in Washington about money laundering.
“Ant and its advisers are working very constructively with [federal regulators]” to close the $1.2 billion MoneyGram acquisition, a source close to the situation said, referring to the Congressional Committee on Foreign Investment in the United States, or CFIUS, which must approve the transaction as it involves a major foreign investment in a company in a key business sector.
Shareholders of Dallas-based MoneyGram, a money-transfer company, approved the sale to Ant for $18 a share on May 16.
How to Make it as a Woman in FinTech: “Don’t Wait to Become a Leader” (Finovate), Rated: A
Adding to our stellar line up of leading women in FinTech, we speak to Alex Foster about how she has become Head of Insurance & Finance Sector & Post Trade Services at BT, and what she would suggest if you were just starting out as a woman in tech.
What was your light bulb moment?
My light bulb moment came about four to five years ago, when I began working with bankers, some who were friends, leaving their traditional roles on the trading floor to create new and exciting FinTech, RegTech, and InsurTech companies. As we know, these start-ups are a growing source of innovation in the financial markets industry. But their small size can create challenges around market adoption, delivery and meeting the stringent contractual or compliance expectations of large financial institutions. We started to work with these companies to help them scale-up to obtain a global reach. I realised the monumental impact that these technologies and FinTech firms could achieve when the right partnerships are in place.
Peter Leonidou Parts Ways with Leverate to Head Early-Stage Fintech Firm (Finance Magnates), Rated: B
Leverate, a technology provider specializing in brokerage solutions for the financial services industry, has parted ways with its Head of B2B Sales Peter Leonidou, who ends a two-year tenure with the technology provider, Finance Magnates has learned.
Peter leaves Leverate to join PROTECHFX LTD, a fintech startup, which according to its website is just starting out on its journey, or at best still operating in its early stages.
FinTechs Afterpay, Ratesetter and Society One pick up Finnie awards (Mozo), Rated: AAA
The winners of FinTech Australia’s inaugural Finnie Awards have been announced, with familiar names Afterpay, Ratesetter and SocietyOne among them.
The awards were handed out across 17 categories, including workplace diversity, insurtech and peer-to-peer lending, to recognise innovation and excellence in the FinTech space.
Online lender RateSetter was a finalist for the FinTech of the Year award, and also successfully took out two spots, for Excellence in both consumer and business lending. These awards were both focused on “outstanding B2B lending results through innovative yet stable, sustainable operations.”
SocietyOne, another online challenger to the big banks, won for Excellence in Peer-to-peer Lending. The award recognised a peer-to-peer platform that showed stringent security measures, a strong market reputation, ease of application and competitive interest rates and loan terms.
Startup Insurance Company Acko General Insurance Raises $ 30M (IndianWeb2), Rated: A
Set-up by Varun Dua, previously founder of Coverfox, Acko General Insurance has received it’s in principle regulatory clearance to launch a General Insurance business in India.
In a regulated business, Acko has raised $30mn, which in effect makes it one of the largest seed rounds for a startup in India.
The first Internet life insurance company and Thai life opened (STCN), Rated: AAA
Recently, the first domestic Internet life insurance company and Thai life officially opened. It is understood that the original vice president of insurance and property insurance Li Yuquan in the life of the ceremony was held. In August 2016 the Insurance Regulatory Commission to the peace and life of the preparation and approval, the general manager is the former deputy general manager of the sea life Wang Hao.
In January this year, Hetai Life Insurance was approved by the China Insurance Regulatory Commission. Registered capital of 1.5 billion yuan, registered in Jinan City, Shandong Province. The legal representative of the company Liu Xin.
Dubai Regulator Launches Special Testing Licensing for Fintech Startups (Finance Magnates), Rated: A
The Dubai Financial Services Authority (DFSA) today released the details of its Innovation Testing Licence (ITL) which allows fintech firms to go through a special testing stage prior to their approval as fully operational firms.
Fintech operators will be able to use the ITL licence to test their products for a period of 6 to 12 months, which could be extended upon DFSA’s discretion.
Successful applicants will then be required to obtain a full financial services licence to continue formally operating. By contrast, fintech firms that fail to meet the outcomes detailed in the regulatory test plan will have to cease activities.