- Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2017-4. Lending Club closes $279.4M self-sponsored securitization. Wellesley directors paid over 900K GBP last year. Renren’s Q1 results. Harmoney hits $500M. Vindi, Smartbill merge.
- Today’s main analysis: Recent Fed credit survey exposes clear small business financing opportunities
- Today’s thought-provoking articles: How the P2P sector has fared since Brexit passed. FCA updates on regulatory sandbox. Baidu, Ant Financial, Ag Bank of China. Personalized robo-advice in New Zealand. End of the road for mobile money loan defaulters.
- KBRA assigns prelim ratings to SoFi Consumer Loan Program 2017-4. GP:”Rated AA”
- LendingClub closes $279.4M self-sponsored securitization. GP:”Rated A-“
- There’s a new way to pay for IVF. AT: “While the focus of this article isn’t on crowdfunding in vitro, per se, it is interesting to note that both LendingClub and Prosper have offered loans for this procedure. Now, there is a tech company specializing in funding fertility treatments including egg freezing. It brings up the question in my mind, What next? Loans for tubal ligations, male fertility treatments, abortions?”
- How JPMorgan is transforming small business lending. AT: “JPMorgan was a pioneer in bank-fintech partnerships.”
- Section 11 claims based on weaknesses in internal controls. GP:”The judge allowed section 11 claim against Lending Club based on the internal controls weakness argument. Now lets see how the lawsuit continues.”
- Elevate insider acquires 9,500 shares of Elevate Credit. GP:”For a total of $68k , the insider owns only the 9500 shares he purchased. Not much money in absolute which makes us think that it was probably a large effort for the inside and therefore worth taking notice.”
- Banks going digital. AT: “Yes, but not quite fast enough.”
- Recent Fed credit survey exposes clear small business financing opportunities. AT: “SBA loans are still largely underutilized. A clear opportunity for online lenders.”
- Banks should avoid replicating millennial strategy for Generation Z. AT: “This is an interesting read. As technology progresses and younger generations come of age, so too will the need for legacy institutions to adopt technology to meet the digital expectations of younger consumers.”
- Acting comptroller’s wish list echoes demands by banks.
- LendingTree subsidiary purchases MagnifyMoney.
- Former head of Goldman Sachs tech joins OpenFin.
- LENDonate changes the game of nonprofit financing.
- Which loans can help expand your small business?
- Office of Comptroller of the Currency (OCC), Conference of State Bank Supervisers spar on special-purpose charter.
- Home Point Financial establishes Institutions Group.
- Cross River on OCC comptroller’s testimony for “Valid when Made” doctrine.
- Aspire retains SenaHill.
- Crowdfunding is becoming a viable way to fund real estate.
- CFPB details complaint process.
- Wellesley directors paid more than 900K GBP last year.
- How the P2P sector has fared since Brexit passed? AT: “The top P2P platforms are doing well.”
- FCA provides update on regulatory sandbox. AT: “A great read.”
- Departing BoE rate-setter pokes at Mark Carney in final speech.
- No sign of decreasing P2P appetite.
- Peter McDermid on property development issues.
- Three out of four investors won’t pay for financial advice.
- Why financial advisers won’t succumb to robots any time soon.
- Renren’s Q1 results.
- Baidu, Ant Financial, and Ag Bank of China.
- Baidu, Ag Bank reach strategic cooperation on intelligent finance.
- Bank of China’s fintech move.
- Harmoney hits $500M. AT: “Nice milestone. Congratulations.”
- Consultation on personalized robo-advice.
- Regulator seeks feedback on robo exemption.
- Global Credit Investments gives OnDeck Australia 22.5M Australian dollars.
- FinTech Australia releases ecosystem map.
- Prospa appoints Damon Pezaro chief product officer.
- United States
- Kroll Bond Rating Agency Assigns Preliminary Ratings to SoFi Consumer Loan Program 2017-4 (BusinessWire), Rated: AAA
- LendingClub Closes $ 279.4 Million Self Sponsored Securitization (Crowdfund Insider), Rated: AAA
- There’s A New Way To Pay For IVF, But No Guarantee It’ll Pay Off (BuzzFeed), Rated: AAA
- One year in: How JPMorgan is transforming small-business lending (Tearsheet), Rated: A
- Lending Club Decision Provides Guidance For Bringing Section 11 Claims Based on Weaknesses in Internal Controls (National Law Review), Rated: A
- Henry W. Ramsey Acquires 9,500 Shares of Elevate Credit Inc (ELVT) Stock (Transcript Daily), Rated: A
- Banks Going Digital – Transforming Branches, Apps and a Focus on Customer Experience (Lend Academy), Rated: A
- Recent Fed Credit Survey Exposes Clear Small Business Financing Opportunities (Forbes), Rated: A
- Banks should avoid replicating their millennial strategy for Gen Z (American Banker), Rated: A
- Acting comptroller’s wish list echoes long-held demands by banks (American Banker), Rated: A
- LendingTree Subsidiary Purchases MagnifyMoney (Crowdfund Insider), Rated: A
- A former cohead of tech at Goldman Sachs has joined a startup that wants to be the iOS of Wall Street (Business Insider), Rated: A
- Orchard Platform Pivot? Not So Fast. (Crowdfund Insider), Rated: A
- LENDonate Changes The Game of Nonprofit Financing by Creating Swift Access to High Quality Loans (PR.com), Rated: A
- Which Loans Can Help You Expand Your Small Business? (NASDAQ), Rated: A
- OCC, CSBS Exchange Views on OCC’s Special-Purpose Charter (Banking Journal), Rated: A
- Home Point Financial Establishes Institutions Group (Marketwired), Rated: B
- Cross River on OCC Comptroller’s testimony calling on clarification of the applicability of the “Valid when Made” doctrine (Cross River Bank Email), Rated: B
- Aspire Retains SenaHill (Aspire Email), Rated: B
- Crowdfunding Becoming Viable Way to Fund Real Estate (Realty Biz News), Rated: B
- CFPB details complaint process at Comply2017 Conference (JD Supra), Rated: B
- United Kingdom
- Wellesley directors were paid more than £900,000 last year (P2P Finance News), Rated: AAA
- How has the P2P sector fared in the year since the Brexit vote? (P2P Finance News), Rated: AAA
- Financial Conduct Authority provides update on regulatory sandbox (FCA), Rated: AAA
- Departing Bank of England rate-setter takes swipe at Mark Carney in final speech (Belfast Telegraph), Rated: A
- No sign of decreasing P2P appetite, claims lender (Bridging & Commercial), Rated: A
- Peter McDermid: help to build (The Scotsman), Rated: A
- Three out of four investors refuse to pay for financial advice (Money Observer), Rated: A
- Why Financial Advisers Won’t Succumb To The Robots Any Time Soon (Huffington Post), Rated: B
- Renren Announces Unaudited First Quarter 2017 Financial Results (PR Newswire), Rated: AAA
- P2P Industry News (Xing Ping She Email), Rated: AAA
- Baidu and the Agricultural Bank reached a strategic cooperation in the layout of intelligent finance (Sina), Rated: A
- Bank of China Begin Fintech Move (AI Topics), Rated: B
- European Union
- IDA ‘confident’ of Brexit investments pipeline, banking event told (Irish Times), Rated: A
- Luxembourg’s politicians pin economic hopes on fintech drive (Financial Times), Rated: A
- How Fintech is Disrupting Banking for Businesses Around the Globe (Due), Rated: A
- Australia/New Zealand
- Harmoney’s Marketplace Hits $ 500,000,000 (Scoop), Rated: AAA
- Consultation on personalised robo-advice (JD Supra), Rated: AAA
- Regulator seeks feedback on robo-advice exemption (NZ Adviser), Rated: A
- Global Credit Investments gives OnDeck Australia A$ 22.5m financing (AltFi), Rated: A
- FinTech Australia releases fintech ecosystem map (Fintech Australia), Rated: A
- Online Lender Prospa Appoints Damon Pezaro as Chief Product Officer (Crowdfund Insider), Rated: B
- Asian Fintech Scene ‘Leapfrogging’ Over US In Innovation (Benzinga), Rated: A
- End of the road for mobile money loan defaulters (Standard Media), Rated: AAA
- Latin America
- Two Brazilian Companies Merged to Create a Super Fintech (Crossroads Today), Rated: AAA
Kroll Bond Rating Agency Assigns Preliminary Ratings to SoFi Consumer Loan Program 2017-4 (BusinessWire), Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two class of notes issued by SoFi Consumer Loan Program 2017-4 LLC (“SCLP 2017-4”). This is a $499.5 million consumer loan ABS transaction that is closing on July 5th, 2017.
Initial credit enhancement levels are 22.69% for the Class A Notes and 12.77% for the Class B Notes. Credit enhancement consists of overcollateralization, subordination (in the case of the Class A Notes), excess spread and a reserve account funded at closing.
Preliminary Ratings Assigned: SoFi Consumer Loans Program 2017-4
|Class||Preliminary Ratings||Principal Balance|
LendingClub Closes $ 279.4 Million Self Sponsored Securitization (Crowdfund Insider), Rated: AAA
LendingClub (NYSE:LC) has announced its first first self sponsored securitization deal had closed. Announced after the market closed, Lending Club issued $279.4 million in notes backed by consumer loans originated on the LendingClub platform. The Consumer Loan Underlying Bond (CLUB) NP Credit Trust 2017-NP1 (CLUB 2017-NP1) was described as marking the start of LendingClub’s securitization program as Sponsor, Servicer and Administrator.
Kroll rated the securities that included $162.4 million of Class A notes rated “A- (sf)”, $41.2 million of Class B notes rated “BBB (sf)” and $75.7 million of Class C notes rated “BB (sf)” backed by approximately $337 million of collateral.
In a separate note, LendingClub also announced that Brad Coleman, Principal Accounting Officer and Corporate Controller, will be resigning from his position as Principal Accounting Officer to pursue other opportunities, effective on August 10.
There’s A New Way To Pay For IVF, But No Guarantee It’ll Pay Off (BuzzFeed), Rated: AAA
Future Family, which officially launches on Thursday, aims to make the complicated, expensive, and emotionally fraught world of fertility treatments “accessible and affordable,” in the words of CEO Claire Tomkins, a former SolarCity executive. “We think of it as modern insurance for a woman,” she told BuzzFeed News.
Because most insurance plans don’t cover these services, fertility patients tend to have high incomes to begin with. In one survey by FertilityIQ, an online advice resource for patients, 42% reported yearly earnings between $100,000 and $199,999. But not everyone has necessarily saved enough to comfortably afford IVF, which costs around $20,000 on average, according to FertilityIQ. In a 2015 Prosper-commissioned survey of 213 US women, 84% said they had financial concerns about their treatments, and nearly half said that those concerns affected how much treatment they pursued.
Future Family’s standard IVF plan, which covers one cycle, is $250 a month, with no down payment. Customers can sign up for a minimum of 5 years and a maximum of 10 years, making the total cost at least $15,000. That would be cheaper than the national average cost of $20,000. The top-tier plan, which covers one cycle as well as egg storage, costs as much as $33,000 ($275 a month for up to 10 years).
Meanwhile, Future Family’s top-tier egg-freezing plan costs as much as $21,000, at $175 a month for up to 10 years of storage. FertilityIQ’s Anderson-Bialis estimates that, nationwide, egg retrieval and freezing costs average $16,000, while storage costs about $3,700 for five years.
Two years ago, Prosper, a peer-to-peer lending service, purchased, for $21 million, a lender with loans for fertility and other non–insurance-covered medical procedures. And in 2014, LendingClub spent $140 million on a similar acquisition. Its fertility loans range from $2,000 to $50,000, while Prosper’s go as high as $100,000.
One year in: How JPMorgan is transforming small-business lending (Tearsheet), Rated: A
For JPMorgan Chase, small business is big. The bank is among the third top lender of Small Business Administration loans by unit in the U.S.
As of May, Chase approved 2,375 loans in 2017 for a total $679 million. But beyond SBA loans, the bank also extended more than $24 billion in credit to 4 million small business customers in 2016 through its business banking, Ink from Chase credit card and commercial term lending. In each of the last four years, it’s extended more than $19 billion in new small business loans.
After the recession, the largest U.S. banks, Chase itself included, halted most of their small business lending, later creating the opportunity for online lenders to enter the market — like Bond Street or OnDeck. Last year, JPMorgan began using OnDeck’s technology for its Chase Business Quick Capital product, a short-term, quickly funded small business loan. It was one of the first banks to embrace a partnership-type relationship with a fintech startup, at a time when the industry narrative still focused on startups’ potential to displace banks.
Lending Club Decision Provides Guidance For Bringing Section 11 Claims Based on Weaknesses in Internal Controls (National Law Review), Rated: A
We have been following defendants’ motions to dismiss in the In re Lending Club Securities Litigation class action, No 3:16-cv-02627-WHA, in the United States District Court for the Northern District of California (“the Lending Club Litigation”).
As the Supreme Court noted in Omnicare, generally a plaintiff pursuing a claim under Section 11 “need not prove . . . that the defendant acted with any intent to deceive or defraud.” However, defendants in the Lending Club Litigation argued that plaintiffs’ claims under Section 11 sounded in fraud because they employed the same factual allegations to allege fraudulent conduct under Section 10(b), and therefore needed to satisfy the heightened pleading standard of Rule 9(b), which requires plaintiffs alleging fraud to state with particularity the circumstances constituting fraud.
Plaintiffs argued that their Section 11 claims were not grounded in fraud and therefore did not need to satisfy the heightened pleading standard of Rule 9(b).
Despite this holding, the Court found that lead plaintiff had “met that heightened pleading standard with respect to three of its Section 11 claims.” Id. In particular the court held that lead plaintiff adequately pleaded its Section 11 claims relating to representations at the IPO regarding (1) the strength of Lending Club’s internal controls and financial reporting, (2) its relationship with Cirrix, and (3) its data integrity and security.
Henry W. Ramsey Acquires 9,500 Shares of Elevate Credit Inc (ELVT) Stock (Transcript Daily), Rated: A
Elevate Credit Inc (NASDAQ:ELVT) insider Henry W. Ramsey purchased 9,500 shares of the stock in a transaction on Friday, June 2nd. The stock was acquired at an average cost of $7.17 per share, for a total transaction of $68,115.00. Following the completion of the acquisition, the insider now owns 9,500 shares of the company’s stock, valued at approximately $68,115.
Banks Going Digital – Transforming Branches, Apps and a Focus on Customer Experience (Lend Academy), Rated: A
The big banks have all started to understand that the traditional way of banking is a thing of the past. Keynote speaker Yolande Piazza, CEO, Citi Fintech talked about disrupting from within, changing how they operate to enable the customer and move to a mobile first approach. She explained how this approach is radical for a bank and the layers of compliance did not make the transition smooth. They have completely rethought how they hire, 50 percent of their fintech talent is from outside the company.
Other interesting areas to note while at the event were BioCatch’s innovations in cyber security with keystroke and mouse analysis along with behavioral biometrics. New payments provider Zelle launched with 40 partners, including 34 top level banks, to allow consumers to send and receive money in minutes. Banks are starting to become innovation hubs and fintech companies, once seen as competitors in the past, are helping the banks make this transformation.
The Federal Reserve just published its 2016 Small Business Credit Survey examining the current small business conditions and credit environment. The Fed found that although big banks are still the major lenders, small business owners are having trouble accessing credit and are therefore looking elsewhere. However, while many small businesses are turning towards online lenders, SBA loans are largely underutilized.
Overall, 10,000 surveys were completed by employer firms across all 50 states. Of those surveyed, roughly half were profitable and almost two-thirds expected their revenues to grow over the coming year. Even job growth looked good, with 39% of small businesses expecting to add jobs within the next year.
PayPal has jumped into the alternative lending game and now finances as much as $3 billion in total small business capital. What’s more, PayPal recently increased its maximum financing limit to $125k, meaning that a majority of small businesses who applied for credit in 2016 could fulfill their financing needs with PayPal.
Online lenders like SmartBiz have a 62% approval rate, on average.
The Fed’s survey found that CDFIs had a 77% approval rate and small banks had a 67% approval rate. Both of these rates higher than many online lenders that are known to typically have some of the easier qualifications.
By comparison, the overall approval rate among larger banks is 54% and 46% among credit unions.
Banks should avoid replicating their millennial strategy for Gen Z (American Banker), Rated: A
Facebook chatbots (kids love messaging apps!), smartphone-enabled ATMs (they spend so much time on their smartphones!) and an on-demand ATM on wheels that will come to you (Uber is the only way to get around!). Not only are these investments failing to resonate with millennials, but the money spent is also failing to plan ahead for the next generation: Generation Z.
Born between 1995 and 2010, Gen Z consumers are looking for something more than simple digital updates: They are looking for a partner that offers them solutions for all pieces of their financial life, including their pressing concern over mounting college debt. In fact, offering “digital” solutions to traditional banking products will not be enough to impress Gen Z, as they are the first to grow up in the post-digital era, giving them high standards for technological capabilities.
Gen Z is also a highly skeptical generation with little brand loyalty; if they see a well-researched, proven option available to them, they will have no hesitation jumping ship or avoiding traditional providers altogether. Whereas 45% of millennials favor loyalty programs, only 30% of Gen Z consumers do. In fact, 41% of Gen Z say they would consider banking services from digital power players like Google, Amazon, Apple or Facebook because they are brands that they interact with daily and trust.
Acting comptroller’s wish list echoes long-held demands by banks (American Banker), Rated: A
In his first testimony to Congress, acting Comptroller of the Currency Keith Noreika is set to submit a laundry list of detailed proposals to loosen regulatory restrictions on financial institutions of all sizes — recommendations that appear to jibe with those made by the Treasury Department this month.
Noreika is offering 17 specific legislative proposals that echo the banking industry’s wish list for regulatory reform.
LendingTree Subsidiary Purchases MagnifyMoney (Crowdfund Insider), Rated: A
LendingTree, Inc. (NASDAQ: TREE) announced on Tuesday its subsidiary, LendingTree, LLC, has acquired the company behind consumer-facing media property platform, MagnifyMoney. This news comes just days after LendingTree announced it acquired DepositAccounts.com.
According to LendingTree, the acquisition purchase has a possible total consideration of $29.5 million, which consists of 29.5 million in cash at closing, and contingent consideration payments of up to $10 million.
A former cohead of tech at Goldman Sachs has joined a startup that wants to be the iOS of Wall Street (Business Insider), Rated: A
Paul Walker, the former cohead of technology at Goldman Sachs, has joined the board at OpenFin, a startup that helps electronic-trading firms build their desktop applications.
Bain Capital Ventures, Pivot Investment Partners, and Nyca Partners have already invested in OpenFin, as have the likes of Cris Conde, former CEO of SunGard, and Tom Glocer, former CEO of Thomson Reuters.
Walker retired from Goldman in 2016 after 15 years with the Wall Street titan. Walker joined the firm in 2001 as a vice president in FICC strategies. He made partner at the firm in 2008.
OpenFin is looking to become Wall Street’s version of what the iOS and Android platforms are to the mobile application space.
Orchard Platform Pivot? Not So Fast. (Crowdfund Insider), Rated: A
Earlier this week there was note circulating the Orchard was in the midst of a pivot. Specifically, the report said Orchard was pivoting from a data/analytics platform to a loan trading platform. This was interesting as the secondary transaction platform for securities based on online loans has been in the works for quite some time.
“We have wanted to have a trading platform for years now,” said Matt Burton, CEO and co-founder of Orchard. “I am not certain where that came from. We have always wanted to facilitate [secondary] transactions. We still have the same vision.”
LENDonate Changes The Game of Nonprofit Financing by Creating Swift Access to High Quality Loans (PR.com), Rated: A
LENDonate, a fintech company, today announced the launch of its distinct hybrid, online lending platform for 501(c)(3) nonprofits. The first-of-a-kind, hybrid platform uses an innovative process that lets nonprofits source loans and donations simultaneously. LENDonate unites nonprofits with lenders, including financial institutions, philanthropic organizations, and accredited investors for quick funding of high-quality, low cost loans. LENDonate is the only marketplace lending platform that enables nonprofits to effortlessly expand their donor base while financing major projects or smoothing out uneven cash flow.
LENDonate was founded by Vivienne Hsu, CEO, a seasoned investment professional and nonprofit fundraiser. She was motivated by a desire to improve nonprofits’ access to the low-cost funding, while providing high-quality, socially impactful investment opportunities for banks and philanthropists.
Which Loans Can Help You Expand Your Small Business? (NASDAQ), Rated: A
Below is an exhaustive list of documents that your lender may request. Online lenders are less stringent and may ask for less, while traditional banks will want the entire suite. Also expect lenders to pull your personal credit score and your business credit score as part of the approval process.
- Personal financial statement: This SBA form requires you to list your personal assets (cash, investments, real estate and cars) and liabilities (mortgages, other debts and unpaid taxes). Private lenders may ask for a similar statement.
- Business certificate/license
- Business plan
- Loan application history
- Income tax returns
- Business lease
The Small Business Administration (SBA)—which guarantees a percentage of the loan amount to banks rather funding directly—is particularly helpful for expansion loan options. The SBA will guarantee up to 85 percent of loans for as much as $150,000 and up to 75 percent of loans over $150,000. A small SBA loan of $25,000 or less can get an 8% interest rate with a payment term of fewer than seven years. The rate on a loan over $50,000 can drop to as low as 6.5% with the same payment terms. Some banks may offer private loans, but their requirements are even stricter than those of the SBA.
Online lenders offer loans with higher rates. But the online lenders often have a faster approval process than banks originating SBA loans.
Another borrowing source on the rise is peer-to-peer lending, or marketplace lending, for businesses.
OCC, CSBS Exchange Views on OCC’s Special-Purpose Charter (Banking Journal), Rated: A
The OCC’s proposed limited-purpose charter for fintech companies was the subject of a lively discussion at the American Bankers Association’s Payments Forum today, as regulators from the OCC and Conference of State Bank Supervisors exchanged at-times opposing views.
Margaret Liu, SVP and deputy general counsel at CSBS reiterated her organization’s view that in moving forward with the limited-purpose charter, the OCC overstepped its authority under the National Bank Act (the CSBS previously filed a lawsuit against the OCC on those grounds).
Kathy Oldenborg, director of payments systems policy at the OCC, emphasized that under the limited-purpose charter, fintech companies would be held the same high regulatory standards as banks, based on the products and services they provide to consumers. She added that while much of the focus around the OCC’s work on innovation has centered on the charter proposal, “the broader initiative was… the ability to signal to banks that it’s okay to innovate. You can work with fintech companies, you can partner with fintech companies, you can buy one if you want. There’s nothing that says you can’t work with fintech companies outside this whole chartering discussion.”
Home Point Financial Establishes Institutions Group (Marketwired), Rated: B
Home Point Financial Corporation (“Home Point”) a national multi-channel mortgage originator and servicer, today announced the formation of its new Institutions Group. This group will include Correspondent Lending, Capital Markets and Home Point’s wholly-owned warehouse lending subsidiary, NattyMac. Led by Maria Fregosi, Chief Capital Markets Officer, the Institutions Group will be able to efficiently and effectively serve correspondent clients with services and products that capitalize on the financial resources, technology and expertise of Home Point Financial.
Cross River on OCC Comptroller’s testimony calling on clarification of the applicability of the “Valid when Made” doctrine (Cross River Bank Email), Rated: B
Cross River Bank, a marketplace leading originator and pioneer in the banking financial technology space, released the following statement on the recommendation by acting OCC Comptroller of the Currency Keith Noreika to clarify the applicability of the “Valid when Made” doctrine.
It is of the utmost importance to deliver regulatory certainty and foster innovation while providing access to credit to all consumers in a compliant, safe, and sound environment. We commend Comptroller Noreika for his testimony this morning recommending clarification of the applicability of the “Valid when Made” doctrine. Cross River remains a steadfast supporter of the Comptroller’s, and the entire regulatory agency community’s, efforts to bring clarity to the regulatory framework and advance the interests of the consumers while ensuring their protection.
Aspire Retains SenaHill (Aspire Email), Rated: B
“Aspire Financial Technologies Inc. (“Aspire”) is announcing today that it has retained SenaHill Advisors LLC (www.senahill.com) to assist in exploring strategic alternatives to maximize shareholder value. Such strategic alternatives may include, but are not limited to, a sale, merger, or other business combination, a sale of a material portion of Aspire’s assets or other transaction. Senahill is a New York based merchant bank focused on the financial technology (FinTech) sector.”
Crowdfunding Becoming Viable Way to Fund Real Estate (Realty Biz News), Rated: B
It’s estimated that by 2025 the crowdfunding real estate industry will be worth more than $300 billion. One of the reasons for this prediction is that it provides individual investors the opportunity to participate in large real estate deals even if they only have a small amount of capital to invest. Just a few years ago things were very different as crowdfunding had yet to gain traction. In 2010 the crowdfunding industry was worth $880 million but is now worth $34.4 billion which is an incredible rate of growth.
CFPB details complaint process at Comply2017 Conference (JD Supra), Rated: B
At the Comply2017 conference held earlier this week in New York City, Scott Steckel, a member of the CFPB’s Office of Consumer Response, gave a presentation in which he detailed the CFPB’s complaint process and how the CFPB shares complaint data through its complaint database.
Wellesley directors were paid more than £900,000 last year (P2P Finance News), Rated: AAA
WELLESLEY & Co’s directors collectively pocketed £923,000 last year, while the property lender reported a full-year loss of £210,288.
Chief executive and founder Graham Wellesley was awarded the highest salary of £342,000, while co-founder Andrew Turnbull took home £244,000, according to the latest annual report filed with Companies House earlier this month.
Former Lloyds Banking Group chief executive Eric Daniels, who stepped down as non-executive chairman at the end of May 2016, received £50,000. Daniels has now joined the board of Funding Circle.
How has the P2P sector fared in the year since the Brexit vote? (P2P Finance News), Rated: AAA
Funding Circle, which received full FCA authorisation last month, has seen new lending grow each quarter since the referendum, from £151,803 lent in the second quarter of 2016 to £182,854 in the third and £305,970 in the fourth. It lent £328,059 in the first three months of this year.
Similarly, Zopa, also now fully authorised, has seen lending increase each quarter, from £154m in the second quarter of 2016, to £175m in the third. There was £194.3m of lending in the fourth quarter and £246.4m at the start of the year.
RateSetter, the last of the big three still awaiting full FCA approval, has seen both consumer and business lending increase.
New business lending was at £59.8m in the second quarter of 2016, rising to £73.8m in the following three months before dropping to £60.5m at the end of the year. It bounced back to £72.5m at the start of 2017.
Landbay has been more mixed, with new lending dropping from £5m in the second quarter to £282,820 in the third and £193,800 in the final three months of the year. New lending was back up to £833,300 at the start of the year.
RateSetter has seen the biggest increase, taking on 9,573 up to the first quarter of 2017 to 44,402.
Funding Circle was a close second, taking on 8,604 to 59,740, while Zopa took on 6,091, taking the total number of lenders to 60,755.
Only MarketInvoice saw a drop by 47 to 220.
Zopa has taken on the most new borrowers at 41,310 since the referendum to 171,607 while RateSetter has taken 30,286 to 203,994.
Landbay and Thincats have taken on the least, at four and 34 respectively.
Financial Conduct Authority provides update on regulatory sandbox (FCA), Rated: AAA
The FCA received 77 submissions for the second phase of the regulatory sandbox, more than applied for cohort one. 31 applications met the sandbox eligibility criteria and were accepted to develop towards testing. The current cohort consists of the 24 firms that are ready to begin testing shortly.
AssetVault enables consumers to catalogue all of their assets in a secure online register and better understand their total value. AssetVault then works with insurance providers to protect the consumer and their assets with appropriate insurance products.
|Leverages artificial intelligence and data sharing to build transparency and liquidity in alternative assets (real estate, angel investments), and offers risk management and analytics services to small investors.|
A mortgage eligibility tool that can be used to help consumers who are in the research phase of buying a home by increasing awareness of their eligibility, based on the lender’s affordability criteria.
FloodFlash provides event-based flood insurance, even in high-risk areas.
Insure A Thing
An alternative insurance business model where the consumer makes payments at the end of the month, based on the exact cost of claims settled during that period.
Nimbla provides flexible trade credit insurance and credit and invoice management tools to UK SMEs, via an online platform
|Paylinko||A DLT-based payments solution enabling users to send and receive payments using a link.|
We are now accepting applications from firms to be part of our third sandbox phase. Firms have until 31 July 2017 to submit their applications.
Departing Bank of England rate-setter takes swipe at Mark Carney in final speech (Belfast Telegraph), Rated: A
A departing rate-setter at the Bank of England has taken a final swipe at dovish Governor Mark Carney, saying record-low interest rates are no longer justified.
In her final speech as an external member of the Monetary Policy Committee (MPC), Kristin Forbes questioned the continued need for “emergency” level interest rates, as well as the “substantial amount of stimulus” rolled out in the wake of the Brexit vote, stressing that forecasts for a recession and higher unemployment after the referendum have failed to materialise.
No sign of decreasing P2P appetite, claims lender (Bridging & Commercial), Rated: A
There has been no sign of a decrease in demand for peer-to-peer finance, online platform RateSetter has told Bridging & Commercial.
“…We’ve seen steadily increasing demand from advisers, and the value of IFA-administered accounts on our platform has doubled over the last year.
“Although there are clearly hurdles – for example, direct investments in peer-to-peer lending are not currently available through investment platforms commonly used by IFAs to buy products on their clients behalf – we see no signs of decreasing appetite.”
Jane Dumeresque, CEO at Folk2Folk, explained that the FCA process was extremely tough and was not too surprised that some had withdrawn.
Peter McDermid: help to build (The Scotsman), Rated: A
Today marks the Scottish launch of the LendInvest Property Development Academy, an adult education course that puts development skills at the fingertips of aspiring house builders.
The first London course was ten times oversubscribed and to date more than 120 “students” have completed our courses. Now we’ve rolled out countrywide to satisfy demand.
Sessions are led by experienced and, as importantly, local advisers who know what it takes to get small-scale property developments delivered on time and on budget.
Access to finance continues to be the biggest hurdle. A severe lack of lenders in Scotland is problematic.
Any experienced developer knows that applying for and awaiting planning permission can be a long, exhausting and expensive process. This is where it pays to do your research.
Structuring a professional team is one of the most important aspects of planning for a development, and a task that can be more complex than it first appears. There are various questions that a developer needs to ask: what are the key development costs? How long will a project take?What consultants are involved in a development project and how should they all work with one another? How do developers insure their teams against delays and accidents?
Sales and marketing are commonly regarded as an afterthought, something to worry about “later”, when in fact marketing needs to be in the forefront of a developer’s mind from the very beginning.
Three out of four investors refuse to pay for financial advice (Money Observer), Rated: A
A survey conducted by investment management company Legg Mason has found that only 24 per cent of investors would be prepared to pay the typical hourly fee for financial advice – which works out on average at £150 per hour, according to unbiased.co.uk.
Just 10 per cent of those who answered said they would be willing to pay £150 or more, while an additional 11 per cent agreed that they would pay between £50 and £149.
Over a third of respondents (36 per cent) said they would refuse to pay for financial advice outright, while 15 per cent said they were unsure what they would be happy to pay.
Why Financial Advisers Won’t Succumb To The Robots Any Time Soon (Huffington Post), Rated: B
Add to this, low levels of financial education, low levels of trust in financial services generally and overwhelming product choice (e.g. 2,000+ investments) and engaging customers without a human adviser is tough. That’s why, according to the industry’s regulator the FCA, of the £208 billion invested by consumers last year 78% was through advisers.
The vast majority of investment advice consumers now get from advisers is supported by online, model driven, financial technology (FinTech) which helps advisers more scientifically assess their risk profile and develop probability based investment strategies which give them a higher chance of meeting their goals at an acceptable risk level.
There are four developments now emerging, which will almost certainly change the game:
- Simple, automated advice
- Account aggregation
- Social networks
- Artificial intelligence
Renren Announces Unaudited First Quarter 2017 Financial Results (PR Newswire), Rated: AAA
- Total net revenues were US$20.9 million, a 94.3% increase from the corresponding period in 2016.
- Advertising and IVAS net revenues were US$11.6 million, a 90.2% increase from the corresponding period in 2016.
- Financing income was US$9.3 million, a 99.7% increase from the corresponding period of 2016.
- Gross profit was US$6.4 million, a 172.6% increase from the corresponding period in 2016.
- Operating loss was US$17.6 million, compared to an operating loss of US$19.2 million in the corresponding period in 2016.
- Net loss attributable to the Company was US$16.2 million, compared to a net loss of US$23.2 million in the corresponding period in 2016.
- Adjusted net loss(1) (non-GAAP) was US$11.0 million, compared to an adjusted net loss of US$15.9 million in the corresponding period in 2016.
P2P Industry News (Xing Ping She Email), Rated: AAA
Internet Finance Giants Ant Financial, Baidu etc., working with bank for new opportunities on fintech.
It seems a trend that internet financial giants working with traditional banks in China. Recently, Baidu built a strategic partnership with Agricultural Bank of China (ABC). The cooperation focuses on fintech areas, including co-building of financial brains and portraits of clients , precise marketing, customer credit evaluating, risk monitoring, robo-advising, etc.
Previously, both Jingdong Finance and Ant Financial Services Group have announced partnerships with banks. On 16th June, Jingdong signed a framework agreement on financial business cooperation with ICBC, planning to conduct cooperation in fintech, retail banking, enterprise credit, etc. While in the late of March, the CCB has signed a tripartite cooperation agreement with Alibaba and Ant Financial. According to the agreement, Ant financial would help CCB to boost the online credit card business. They are going to strength cooperation in offline & online channel and electronic payment business, so as to open up the credit system.
Bank of China Set Up the Inclusive Finance Division
On 20th June, the Inclusive Financial Division of BOC was founded officially. The new division aim at providing financial services in comprehensive coverage of rural and urban. According to reports, China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC) and Agricultural Bank of China (ABC) have all set up their Inclusive Financial Division at the general bank level.
Baidu and the Agricultural Bank reached a strategic cooperation in the layout of intelligent finance (Sina), Rated: A
In accordance with the strategic cooperation agreement, the cooperation mainly focused on the field of financial technology, including the construction of financial brain and customer portrait, precision marketing, customer credit evaluation, risk monitoring, intelligent investment, intelligent customer service and other specific applications, Around the financial products and channel users and other areas to start a comprehensive cooperation.
Bank of China Begin Fintech Move (AI Topics), Rated: B
Bank of China (BOC) and Tencent have established a joint financial technology laboratory, the lender said in a statement this week. The lab will work on cloud computing, big data, blockchain and artificial intelligence to promote financial innovations.
IDA ‘confident’ of Brexit investments pipeline, banking event told (Irish Times), Rated: A
IDA Ireland’s head of international financial services, Kieran Donoghue, has said he is “confident” that the Republic will secure a number of wins as his organisation “aggressively” pursues the opportunity to lure financial activity from London following Brexit.
Luxembourg’s politicians pin economic hopes on fintech drive (Financial Times), Rated: A
Britain’s planned departure from the EU has provided policymakers with an incentive to build a fintech hub in Luxembourg that could attract UK technology companies looking to maintain a foothold in the EU.
Prime minister Xavier Bettel has made the country’s digital transformation a priority since succeeding the long-serving Jean-Claude Juncker in December 2013. Mr Bettel launched the Digital Lëtzebuerg [Luxembourg] initiative the following year as a platform for encouraging new technology in the financial industry as well as society as a whole.
The flagship project to encourage fintech is the Luxembourg House of Financial Technology, opened with much fanfare in April with backing from the government and business groups.
Its focus is on insurance, banking and fund technology in areas such as digital investment and portfolio management, blockchain applications, payment platforms, data analytics, artificial intelligence, security and authentication.
Same day bank transfers were rolled out in the United Kingdom almost a decade ago. NACHA, the regulatory organization responsible for the ACH system, announced efforts for faster transfers two years ago. However, very few banks are actually implementing faster transfers.
Digital wallets are a key concept in bringing financial services to the unbanked and underbanked.
Multiple large banks have added bot features to their customer service toolset, and there is no limit to how far it can go. Just a few months ago at LendIt I captured a video of someone asking a computer for help picking a credit card.
Over $36 billion were poured into FinTech ventures in 2016 alone, and about a quarter of that went to banking related ventures. Payments, investments, and wealth management were other major categories for 2016 FinTech investment.
Harmoney’s Marketplace Hits $ 500,000,000 (Scoop), Rated: AAA
Peer-to-peer lending marketplace Harmoney announced today that $500,000,000 in lending has been transacted through the platform in just under three years of operation. 30,000 Kiwis have made the choice to join the Harmoney community with additional support from two challenger NZ owned banks TSB and Heartland.
Kiwis have borrowed for all sorts of reasons;
- 12,000 to pay off debt, mainly expensive Credit Card debt
- 4,000 have completed home improvements and renovations
- 3,000 have taken a special trip or holiday
- Almost 2,000 have upgraded their car and;
- 10,000 have borrowed for a vast array of other reasons, from dream weddings, book publishing to achieving their dreams at the Paralympics.
Consultation on personalised robo-advice (JD Supra), Rated: AAA
There is a clear demand, from both industry and the regulator, to allow personalised robo-advice to be provided ahead of the FAA reforms. As a result, the FMA is consulting on an exemption to allow this to happen – the exemption consultation can be found here.
The exemption will be subject to conditions but these are very similar to those that regulators have imposed in other jurisdictions (such as Australia) where our offices have been advising on for some time. We don’t expect there to be too much objection to these.
- Service: The exemption will be limited to financial advice or investment planning services and won’t cover the provision of DIMS under the FAA or the FMCA.
- Product type: The robo-adviser will be limited to advice on financial products that are highly liquid or easily transferable. The FMA’s over-riding concern here is that consumers should be able to easily unwind their holdings if the robo-advice is poor or unsuitable. The proposed product list for robo-advice will be:
- KiwiSaver and managed funds that are continuously offered and redeemed at a price based on the value of the scheme property
- Listed equities and listed debt
- Government bonds
- General insurance products (home, contents and vehicle) and
- Savings products and credit contracts (other than mortgages).
- Pre-notification procedure: A robo-adviser will need to give prior notice to the FMA setting out ‘good character’ declarations in relation to senior managers and directors and giving details of any criminal convictions in New Zealand or overseas. The FMA will need to issue a no objection confirmation in relation to the good character declarations before the robo-adviser starts business.
- Status disclosure: The robo-adviser will need to clearly disclose that it is relying on the exemption and that the FMA has not in any way endorsed, approved or reviewed the service.
- Disclosure: Before giving advice to a client, the robo-adviser will need to give the client sufficient information to make an informed decision, including:
- The nature and scope of the service and whether the service is limited to a particular range of products. This will need to include:
- Clarification of the extent of human involvement
- Clarification that the advice provided will depend solely on the information provided by the client
- An explanation of any limits on the advice or portfolios generated by the algorithm
- A concise explanation of the benefits and risks of the service.
- An explanation of the fees that must be paid.
- Details of how the robo-adviser is paid and disclosing any actual or potential conflicts of interest that may influence the services provided.
- An explanation of how complaints can be made.
Regulator seeks feedback on robo-advice exemption (NZ Adviser), Rated: A
The Financial Markets Authority (FMA) is seeking feedback on its proposals that would enable entities to provide robo-advice.
The current law, passed in 2008, did not contemplate digital advice, meaning that personalised advice, or advice that takes into account an individual’s financial situation or goals, can only be given by “a natural person”.
The purposes of the Financial Advisers Act (‘FA Act’) are aligned with the Financial Markets Conduct Act, which include “promoting innovation and flexibility in financial markets.”
Global Credit Investments gives OnDeck Australia A$ 22.5m financing (AltFi), Rated: A
Asset manager Global Credit Investments has hit up its network of rich Australian families and raised A$22.5 million to refinance OnDeck Australia’s small business loan book.
A press release issued by both companies said the capital raise was “significantly oversubscribed”, with wealthy Australians attracted to the returns offered by OnDeck‘s loans, typically in the high-single-digits.
FinTech Australia releases fintech ecosystem map (Fintech Australia), Rated: A
Australia’s fintech industry body today released its first member ecosystem map, which helps build domestic and international understanding of the nation’s fintech strengths and diversity, particularly in wealth generation and lending.
The ecosystem map shows that wealth and investment, and consumer and business lending, are Australia’s two largest fintech sub-sectors – an outcome that is consistent with findings from last year’s.
Online Lender Prospa Appoints Damon Pezaro as Chief Product Officer (Crowdfund Insider), Rated: B
Prospa, an Australian online lender for small businesses, has appointed Damon Pezaro as its first Chief Product Officer.
Pezaro joins Prospa from Domain, where as CPO he led major transformation across the business and, apparently, a dramatic period of growth.
Asian Fintech Scene ‘Leapfrogging’ Over US In Innovation (Benzinga), Rated: A
While fintech companies proliferate in the United States, driving the expansion of a well-established financial sector with flourishing credit card and personal banking industries, Orchard Platform CEO Matt Burton is turning an eye to the east.
“In a lot of Asia, that doesn’t exist whatsoever,” Burton said at Benzinga’s 2017 Fintech Awards. “The population there are getting loans for the first time ever. There’s no credit bureaus there, so any data set that you’re able to acquire is completely proprietary.”
End of the road for mobile money loan defaulters (Standard Media), Rated: AAA
Credit reporting firm TransUnion yesterday said it had introduced into the Kenyan market a mobile score card that profiles borrowers using mobile lending platforms, which it will be sharing with banks and other lenders.
TransUnion Kenya Chief Executive Billy Owino said the Mobile Score Card would enable lenders access predictive and customised risk views while offering consumers alternative access to credit and an opportunity to build a positive credit score.
This wil be made possible by making use of mobile lending platforms. He added that the mobile money ecosystem has outgrown necessity-based transactions and peer-to-peer lending and is now transiting into mobile credit and loans.
Two Brazilian Companies Merged to Create a Super Fintech (Crossroads Today), Rated: AAA
The financial terms of the deal were not disclosed, but the merger of the two companies aims to consolidate the market of payments focused on the service sector in Latin America.
Companies like Thomson Reuters, Movile, B2W, Empiricus, Serasa Experian, Buscape, Smartfit, Editora Abril and the most important subscription businesses are using Vindi and Smartbill solutions.