- Today’s main news: Laplanche shares vision for Online Lending 2.0 at Lang Di Fintech. Elevate named a great place to work (again). FinLeap raises 39M Euro. Crunchbase-like database launches in Singapore.
- Today’s main analysis: Ant Financial poised for more growth. Fintech use reaching mass adoption among digital consumers.
- Today’s thought-provoking articles: OCC vs. New York DFS. Ant Financial poised for more growth. Fintech reaching mass adoption among digital consumers.
- Elevate named Great Place to Work. AT: “One can’t underestimate the importance of work culture. It’s vitally important for startups to create a great work environment. First, how else will you attract the kind of talent you need to grow into a major player? Besides access to capital, company culture is one of the biggest and most important drivers of early success. Evidently, Elevate has it.”
- Laplanche sees Upgrade growing loan volumes. AT: “For his sake, let’s hope the rest of us see it.”
- OCC vs. New York DFS. AT: “The battle over regulatory control of fintech in the U.S. isn’t going to end anytime soon. It’s perhaps the most important thing right now affecting the future of the entire ecosystem.”
- Worthy Financial closes seed round. GP:”Congratulations !”
- Stash lets anyone invest in stock market with $5. AT: “This is one of the best ideas I’ve seen in a while. I hope they succeed.”
- Why robo-analysts will transform investing.
- Bankers worry about losing jobs to automation. AT: “There will undoubtedly be some lost jobs as robos, machine learning, and other tech innovations continue to grow in popularity.”
- Podcast interview with Matthew Wong of CB Insights on Insurtech.
- Jefferies gives IBS Watson a reality check.
- The future of millennial banking. AT: “Not much new, but a slightly different take on a recurring theme.”
- Wela pairs AI with real advisors on Android devices.
- Three leading lawyers take lead at Manatt’s Financial Services Group.
- MarketInvoice funds 1.34 GBP cumulative invoices.
- RateSetter’s chairman touts provision funds.
- LIM Asia Special Situations Master Fund increases stake in Ranger Direct Lending fund.
- Assetz Capital makes Scottish appointment.
- P2P lenders help British Business Bank fund 717M GBP SME loans.
- Laplanche shares vision for Online Lending 2.0 at Lang Di Fintech.
- Ant Financial poised for more growth. AT: “This is an excellent must-read about the world’s largest fintech company. A lot of drill-down on the detail.”
- PBOC calls upon fintech firms to help fund online transaction monitoring.
- Is M&A the future of P2P lending?
- Fintech survey from PwC.
- FinLeap raises 39M Euro.
- Regulating fintech.
- Reporting to financial regulators with XBLR creates confusion.
- Fintech use reaching mass adoption with digital consumers. AT: “It makes sense that digital consumers will lead the way on fintech adoption. As digital consumers and digital natives reach the zenith on adoption, it should trickle down to casual digital users.”
- OxyLoans plans to raise Rs 200 cr debt.
- TachyLoans is an end-to-end digital platform for lenders and borrowers.
- Why should P2P lenders have a lender protection fund?
- Paytm invests in Mobiquest.
- United States
- Elevate Named Great Place to Work by Independent Analysts for Second Year in a Row (4-Traders), Rated: AAA
- Ex-LendingClub CEO Laplanche sees new Upgrade venture growing loan volumes (Yahoo! News), Rated: AAA
- OCC vs. New York DFS: Battle for the Future of FinTech (Bloomberg BNA), Rated: AAA
- Worthy Financial Announces the Closing of Its Seed Financing Round (BusinessWire), Rated: A
- Stash, now valued at $ 240 million, lets anyone start investing in the stock market with just $ 5 (Business Insider), Rated: A
- Why Robo-Analysts, Not Robo-Advisors, Will Transform Investing (The Financial Revolutionist), Rated: A
- Bankers Worry About Jobs Lost to Automation (Newsmax), Rated: A
- Matthew Wong of CB Insights on Insurtech (Lend Academy), Rated: A
- Solar Loans Are A Risky Investment But Not Unlike Other ABS (ValueWalk), Rated: A
- Jefferies gives IBM Watson a Wall Street reality check (TechCrunch), Rated: A
- Cascade Fintech Signs 3-Year Contract for AU10TIX ID Authentication & Onboarding Automation (WVAlways.com), Rated: A
- The future of Millennial banking (Marketing-Interactive), Rated: A
- Wela, the World’s First Financial Advice App Pairing Artificial Intelligence with Real Advisors, Available for Android Devices (Marketwired), Rated: B
- Three Leading Lawyers Take the Helm of Manatt’s Financial Services Group (BusinessWire), Rated: B
- United Kingdom
- MarketInvoice Stands at £1.34 Cumulative Invoices Funded (Crowdfund Insider), Rated: AAA
- RateSetter’s new chairman heralds benefits of provision fund (P2P Finance News), Rated: AAA
- Activist investor increases stake in Ranger Direct Lending fund (AltFi), Rated: A
- Assetz Capital Continues UK P2P Expansion with Scotland Appointment (Crowdfund Insider), Rated: A
- P2P lenders helped British Business Bank fund £717m of SME loans last year (P2P Finance news), Rated: A
- Renaud Laplanche Shares His Vision for Online Lending 2.0 at Lang Di Fintech (Lend Academy), Rated: AAA
- Alibaba Affiliate Ant Financial: World’s Largest Fintech Poised For More Growth (Seeking Alpha), Rated: AAA
- PBOC calls upon fintech firms to help fund system to monitor online transactions (SCMP), Rated: A
- Merger and acquisition may be the future trend for P2P lending sector (Xing Ping She), Rated: A
- PwC: Fintech Survey China 2017 (Crowdfund Insider), Rated: A
- European Union
- German fintech factory FinLeap raises EUR39 million (Finextra), Rated: AAA
- Regulating FinTech: the Way Forward (Fexco), Rated: A
- Bricknode: Reporting To fFnancial Regulators With The XBLR Format Creates Confusion (Mondovisione), Rated: A
- Fintech Use Reaching ‘Mass Adoption’ Among Digital Consumers (The Financial Brand), Rated: AAA
- Alt Lending platform OxyLoans plans to raise Rs 200 cr debt (MoneyControl), Rated: AAA
- This startup is an end-to-end digital platform for lenders and borrowers – TachyLoans (KnowStartup), Rated: A
- When airlines don’t have parachutes, why should P2P lending platforms have LPF? (India Times), Rated: A
- Paytm invests in Mobiquest (e27), Rated: B
- Fintech non-profit launches database for financial technology startups in Singapore (Tech in Asia), Rated: AAA
- South Korean FinTech Firms To Offer International Money Transfer Services (ETH News), Rated: A
Elevate Named Great Place to Work by Independent Analysts for Second Year in a Row (4-Traders), Rated: AAA
Elevate was recently certified as a great workplace by the independent analysts at Great Place to Work®. Elevate earned this credential based on ratings provided by its employees in anonymous surveys. A summary of these ratings can be found at http://reviews.greatplacetowork.com/elevate.
“According to our study, 87 percent of Elevate employees say it is a great workplace,” says Sarah Lewis-Kulin, Vice President of Great Place to Work Certification & List Production.
79% of Elevate employees completed a survey, resulting in a 90 percent confidence level and a margin of error of ± 2.04.
Ex-LendingClub CEO Laplanche sees new Upgrade venture growing loan volumes (Yahoo! News), Rated: AAA
Online lender Upgrade, launched by former LendingCLub Corp CEO Renaud Laplanche in April, expects to grow its loan volumes and add new asset managers to its roster of buyers in coming months, Laplanche said in an interview on Monday.
Upgrade has been testing its credit quality and risk management systems, compliance framework and other operations, as well as building up its infrastructure to deal with rising volumes before ramping up the service, Laplanche added. The company has signed up six asset managers who are already buying or plan to buy loans originated by the company, including Jefferies LLC and an unnamed Hong Kong firm, he said.
OCC vs. New York DFS: Battle for the Future of FinTech (Bloomberg BNA), Rated: AAA
In the rapidly developing world of financial technology it often is unclear who has the legal authority to regulate the activities of newly created companies. Many of these companies do not neatly fit into any established regulatory scheme. However, answering the question of who will be creating the regulatory rules for FinTech companies is important both for regulators and the FinTech companies themselves.
State Regulators Want to Regulate FinTech
Over the past several years, state regulators have been staking out positions as leading regulators of FinTech companies.
During this same period, federal regulators have announced the intention to assert control over the regulation of FinTech companies.
The OCC indicated that its authority to grant FinTech Charters to nonbank FinTech companies stems from 12 C.F.R. § 5.20(e)(1), which states that the agency may grant such charters to institutions that conduct “at least one of the following three core banking functions: receiving depositions, paying checks, or lending money.”
The DFS did not limit itself to criticizing the proposed FinTech Charters. On May 12, 2017, the DFS filed a lawsuit against the OCC in the District Court for the Southern District of New York, alleging that the OCC’s proposed FinTech Charters exceeded the agency’s statutory authority under the National Banking Act and violated the Tenth Amendment. Based on these claims, the DFS sought declaratory and injunctive relief that would declare the proposed FinTech Charters to be unlawful and prohibit the OCC from creating or issuing these charters in the absence of express authorization from Congress.
Third, even if the OCC prevails and begins granting FinTech Charters, state agencies such as the DFS will still attempt to regulate FinTech companies. This could lead to future disputes over the nature and scope of the federal preemption of state regulations, which will add to the confusion over which regulations apply to which FinTech companies.
As a result of these issues, FinTech companies have little idea what the future regulatory terrain will look like. This uncertainty makes it difficult for companies to predict the future regulatory cost of business decisions they would like to make today.
Worthy Financial Announces the Closing of Its Seed Financing Round (BusinessWire), Rated: A
Worthy, a digital investment app that redefines how Americans access investment products, diversify their portfolios and save for retirement, announced the successful closing of its seed financing round. The funds will be used for the full-scale roll-out of the Worthy mobile app, and will enable Worthy to expand its growing user base as well as to broaden the array of investment product options it offers retail investors.
Worthy provides users with the unprecedented ability to spend their way to retirement by investing retail round-ups into high-yielding fixed interest bonds, the proceeds of which fund growing businesses. In doing so, anyone has the capability to build a nest egg, enhance portfolio returns, mitigate risk, and generate both social as well as financial returns. Worthy investors grow their portfolios while simultaneously supporting American entrepreneurs.
Stash, now valued at $ 240 million, lets anyone start investing in the stock market with just $ 5 (Business Insider), Rated: A
Krieg and Robinson realized then that they had an opportunity to help.
They founded Stash, an app that lets you build a portfolio and start investing with only $5, plus it teaches you the ins and outs of the stock market.
Krieg and Robinson realized then that they had an opportunity to help.
The company launched in October 2015 and just closed on a $40 million Series C led by Coatue Management. That brings Stash’s total funding to $78 million and values the New York-based startup at $240 million, according to a person familiar with the company.
Stash makes money by charging a subscription fee of $1 per month for accounts with less than $5,000. When an account has more than $5,000, Stash charges a fee of 0.25% fee.
Stash now has about 850,000 customers nationwide.
Why Robo-Analysts, Not Robo-Advisors, Will Transform Investing (The Financial Revolutionist), Rated: A
Robo-advisors and robo-analysts are both important to enabling wealth management firms to cut costs without sacrificing quality of advice, but the importance of a robo-analyst to enhance the quality of investment advice shouldn’t be underestimated.
Today, many of the tasks performed by robo-advisors are low value-added services such as determining and communicating asset allocation strategies (e.g., 60% equities, 30% fixed income and 10% cash). In fact, these services are so low value-added that advisors cannot make money doing them unless they are bundled with higher value-added services.The value proposition of a robo-analyst is very different.
Specifically, by shining an analytical light in the dark corners of financial filings, robo-analyst technology can identify many critical data points overlooked by most research analysts today. No longer must investors rely on the headlines or management-manipulated earnings. With new technologies, investors can receive a much fuller, more comprehensive analysis of financial filings, company profits and valuation so as to make better informed decisions than ever before. As a result, robo-analyst tech raises the analytical bar universally, enabling investors to transcend the short-sighted and high turnover trading mentality that, in the long run, does more damage to investors than good.
Bankers Worry About Jobs Lost to Automation (Newsmax), Rated: A
A quarter of banking’s “front line” professionals are worried about losing their jobs to robots and artificial intelligence-boosted mobile apps, according to a LinkedIn survey.
In the poll of 1,012 pros from financial technology, investment banking, retail and corporate banking, financial and hedge fund management, accounting, insurance, and private equity, 25 percent said they are concerned automation will impact their job security – with 34 percent of retail bankers saying it is a significant concern for them.
The survey also found 42 percent of financial services pros think financial technology is a “direct threat” to traditional financial services, compared with 13 percent of professionals who work in traditional financial services, and 18 percent of all the financial professionals.
Matthew Wong of CB Insights on Insurtech (Lend Academy), Rated: A
In today’s episode of the Lend Academy podcast we have Matthew Wong of CB Insights. He has been following innovation in the insurtech space for some time and his weekly insurtech newsletter has a subscriber base of more than 18,000 people.
In this podcast you will learn:
- Matt’s background and how he first became involved in insurtech.
- What CB Insights does.
- The headwinds facing insurance industry incumbents today.
- Why millennials are not buying insurance as much as other generations.
- Why insurtech is hot right now when it comes to VC investments.
- Some of the most interesting companies in the insurtech space right now.
- Why it will probably take a long time for these startups to get to scale.
- Why Matt likes Zhong An Insurance, the first and largest online insurer in China.
- How the incumbent insurance companies have been reacting to this surge in startup activity.
- Why Munich Re is one of the most interesting incumbents.
- Matt’s view on what SoFi is doing partnering with a life insurance company.
- The endgame for many of the insurtech startups.
Solar Loans Are A Risky Investment But Not Unlike Other ABS (ValueWalk), Rated: A
Solar loans are on the rise as the industry undergoes a transition and credit investors consider whether these asset-backed securities are worth the risk. In some ways, they’re similar to other types of collateral, and credit investors are already used to dealing with the types of risk they pose. However, analysts at Moody’s warn that they’re one of the riskiest securitization asset classes.
The reason solar loans are so new is because until now, the residential solar market has been dominated by third-party ownership of solar panel systems via power-purchase agreements and leases. GTM Research projected late last year that 2017 will be the year direct ownership of residential solar panels retakes its position as the top solar financing model.
The firm projected that 55% of the U.S. residential solar capacity that’s installed this year will be bought by customers who either pay in cash or take out a loan to finance their systems.
Jefferies gives IBM Watson a Wall Street reality check (TechCrunch), Rated: A
IBM’s Watson unit is receiving heat today in the form of a scathing equity research report from Jefferies’ James Kisner. The group believes that IBM’s investment into Watson will struggle to return value to shareholders.
The narrative isn’t the product of any single malfunction, but rather the result of overhyped marketing, deficiencies in operating with deep learning and GPUs and intensive data preparation demands.
If job postings are any indication, IBM is not keeping pace with other technology companies in hiring machine learning developers.
Cascade Fintech Signs 3-Year Contract for AU10TIX ID Authentication & Onboarding Automation (WVAlways.com), Rated: A
US prepaid card and P2P payment services provider Cascade Financial Technology Corp has signed a 3-year contract to power customer onboarding and KYC with 2nd generation ID authentication and onboarding automation. AU10TIX Secure Customer onboarding (SCO) cloud service that already powers major players across financial services markets, is known not only to increase KYC robustness and fraud protection but also improve customer conversion success chances and operating efficiency.
The future of Millennial banking (Marketing-Interactive), Rated: A
In the last ten years, the fundamental assumption that financial institutions are the only avenue to financial transactions is being called to question, especially by Millennials, who are by far the most entrepreneurial generation.
In a disruptive world, what does the future of banking and finance look like? How can and should financial institutions adapt to remain relevant, or even lead in this era of change?
- Seamless, efficient and fast
Payments are perhaps the most basic and prevalent interaction with finance for the masses, yet for the longest time, payments to businesses saw minimal innovation. P2P transfers were never a focus for banks since it was a zero commission business. This was a pain-point to Millennials, who are used to sending everything from photos to documents electronically – having to withdraw physical cash or obtaining account details to securely transfer money for lunch is considered old fashioned!
- Flexibility and access to funds
Traditional unsecured loans might require a strong financial history or proof of steady income stream, which would be unlikely if the individual were not taking a salaried job. Cash advances on credit cards would usually incur overly high interests costs.
This creates opportunities for peer to peer (P2P) lending marketplaces such as Prosper and Lending Club, platforms which create alternative ways to access cash loans while providing alternative yields on deposits.
- Information access
Websites such as MoneySmart, DirectAsia, GoBear and Milelion position themselves as third-party and an unbiased advisor of investment products and policies. They perform the heavy lifting of trawling through multiple sites to aggregate and analyse information, empowering consumers to make informed purchases in the shortest time.
- The reversal to brand love
The answer lies in placing the consumer in the centre of their businesses and asking the right questions constantly to redefine scope of value-add. It is an iterative journey, and worthwhile to include consumers as co-creators in product design and transformation.
Wela, the World’s First Financial Advice App Pairing Artificial Intelligence with Real Advisors, Available for Android Devices (Marketwired), Rated: B
Wela, a personal finance app that pairs artificial intelligence (AI) and human advisors, announces today it is available for download on Android devices in addition to iOS. Wela pairs real financial advisors with AI through the personification of its digital advising algorithm, Benjamin. The first true digital advisor, Benjamin utilizes AI to track users’ daily, weekly and monthly spending habits and provides personalized advice based on their financial needs and goals. Unlike other free consumer finance apps, Wela also offers access to real financial advisors via phone, video chat or in-person at no additional cost.
The Android app contains the full functionality of the iOS version and employs the same innovative features that allow users to track all their financial accounts in one place. Wela protects user privacy by leveraging bank-level security, as well as 256-bit SSL encryption and two forms of secure authentication. Capable of aggregating data from more than 13,000 financial institutions, Benjamin pulls linked account information to run a complete analysis, helping users take steps toward financial wellness based on three main pillars: creating an emergency reserve, paying off debt and implementing an investment strategy. In addition to Benjamin’s foundational metrics, the algorithm delivers custom insights on demand, helping users stay on track to reach their short- and long-term goals.
Three Leading Lawyers Take the Helm of Manatt’s Financial Services Group (BusinessWire), Rated: B
Gottlieb is a partner in the firm’s Chicago office, Korn is based in Manhattan, and Wilson practices in Manatt’s Los Angeles office.
MarketInvoice Stands at £1.34 Cumulative Invoices Funded (Crowdfund Insider), Rated: AAA
This past February, MarketInvoice shared it had funded invoices over £1.1 billion since platform launch in 2011. The online lender said it expects to top the £2 billion in invoices funded by the end of the year.
In Q2 of 2017, MarketInvoice announced that it had funded invoices from UK businesses worth £161.9 million. Compare this amount to the £103 million funded in Q2 of 2016 and the platform is generating some serious momentum.
In the first quarter of 2017, MarketInvoice generated £130 million in invoice finance.
RateSetter’s new chairman heralds benefits of provision fund (P2P Finance News), Rated: AAA
RATESETTER’S new non-executive chairman Paul Manduca (pictured) has heralded the peer-to-peer lender’s “simplicity”, citing its provision fund as an example, on his first day in his new role.
The asset management veteran said that financial innovation can sometimes result in overly-complex products that investors cannot understand, which is “complacent and out of step with what customers want”.
Activist investor increases stake in Ranger Direct Lending fund (AltFi), Rated: A
The LIM Asia Special Situations Master Fund has increased its stake in the £243m Ranger Direct Lending fund, following the portfolio’s move to a double-digit discount.
The Hong-Kong based fund had already invested in the closed-ended portfolio, which invests in a host of online lending platforms, owning less than 4 per cent. Last week it increased its holding to 5.48 per cent (on the 7th July).
Assetz Capital Continues UK P2P Expansion with Scotland Appointment (Crowdfund Insider), Rated: A
Assetz Capital is continuing its strategy of establishing a local presence across the UK with the appointment of Ian Craig as Regional Relationship Director to help manage operations in Scotland. The appointment comes as Assetz Capital says growth in Scotland continues with a target of £50 million in lending (subject to two upcoming completions). Assetz Capital says it is well on its way to becoming the second largest alternative finance lender in Scotland.
Craig will be responsible for helping local Scottish businesses acquire finance through the peer-to-peer platform and ensure borrowing with Assetz Capital runs seamlessly.
P2P lenders helped British Business Bank fund £717m of SME loans last year (P2P Finance news), Rated: A
PEER-TO-PEER lenders were among the delivery partners helping the British Business Bank (BBB) fund £717m of loans to small businesses last year, the firm’s annual report revealed.
The state-backed institution, which has channelled funds through P2P platforms such as RateSetter, Funding Circle and MarketInvoice, facilitated 94 per cent of its finance through banks outside of the ‘big four’ last year, up from 90 per cent in 2015 and 79 per cent in 2014.
The BBB has a key performance indicator of having more than 75 per cent of its finance facilitated through providers other than the four largest banks over five years, so it has already surpassed that aim.
Renaud Laplanche Shares His Vision for Online Lending 2.0 at Lang Di Fintech (Lend Academy), Rated: AAA
In his first public appearance in over a year Renaud Laplanche, the CEO of Upgrade, gave a presentation this past weekend at Lang Di Fintech, LendIt’s annual Chinese conference, in Shanghai. Titled Online Lending 2.0 he laid out his vision for where he thinks the online lending industry is going next.
He talked about how one of the big innovations in Online Lending 1.0 was the introduction of more data into the underwriting process. Ten years ago, which marked the beginning of Online Lending 1.0, this new data allowed more accurate underwriting of consumers. But in Online Lending 2.0 this has expanded dramatically with not just more data but new and better tools available to analyze this data.
The two key data points that are being added in Online Lending 2.0 are location data and free cash flow analysis. We need to adjust underwriting to take into account location because a consumer in New York City has a much higher than average cost of living while a consumer in Greenville, SC has a much lower than average cost of living for example. This is why Debt-to-Income (DTI) is less important than free cash flow today.
Alibaba Affiliate Ant Financial: World’s Largest Fintech Poised For More Growth (Seeking Alpha), Rated: AAA
Ant Financial, Alibaba’s (NYSE:BABA) financial affiliate, is the largest fintech in the world, and leads the pack of the world’s largest fintech unicorns, the top four of which are from China, the largest fintech market in the world: Ant Financial (US$60 billion), Lufax (US$18.5 billion), JD Finance (US$7 billion) (NASDAQ:JD), and Qufenqi (US$5.9 billion).
Payments make up the biggest portion of fintech in China and this is expected to be the same going forward.
Mobile phones function as mobile wallets for about 425 million Chinese, or 65% of all mobile users. This is the highest penetration rate in the world. At 38 trillion yuan (US$ 5.5 trillion) last year according to data from iResearch, China is the world’s largest mobile payments market and is over 50 times bigger than the American market where mobile payments reached US$112 billion.
China’s e-commerce market is expected to continue its upward climb. Online sales represented 16.4% of China’s total retail sales in the first half of 2016 and this is expected to climb to 21.7% by 2020 which should benefit Alipaygoing forward.
Wealth management is the largest area of fintech after payments.
There are about 325 million Chinese investors in Yu’e Bao, a number almost as big as the population of the United States and the fund has more assets than the rest of the top 10 Chinese peers combined.
The majority of Yu’e Bao users are millennials under the age of 30 and about 99.7% of its investors are individuals, according to its annual report, rather than companies or financial intermediaries as is usually the case at other Chinese money-market funds.
Data from the World Bank’s Global Findex study revealed that the bank account ownership rate among individuals aged 15 and older is quite high in China (79% in 2014) yet credit usage is relatively low at 14% in 2014.
The People’s Bank of China covers credit profiles for just about 25% (around 350 million) of China’s 1.3 billion population and shares this data only with selected banks. This absence of reliable credit scoring is partly the reason individuals and small enterprises experience difficulty obtaining a loan from China’s state-controlled banking system which tends to favor large corporates and state-owned enterprises.
Credit data from the system will also be used to support lending activities at Ant Financial’s MYbank, an internet-only bank which provides loans to SMEs. Set up in mid-2015, the bank will extend loans up to US$800,000 as well as smaller loans that state banks usually don’t pay much attention to.
China has just 8.1 commercial bank branches and 55 ATMs per 100,000 people. This compares with US and Canada which have 28.2 branches and 222 ATMs per 100,000 people and in Europe where there are 28 branches and 81 ATMS per 100,000 people.
China’s central bank has urged financial technology (fintech) companies to help pay for a government-controlled monitoring system to watch over financial transactions on the internet.
Sun Guofeng, director general of the People’s Bank of China’s research institute, said the fast-growing fintech businesses have ratcheted up pressure on authorities to invest heavily in regulatory technology, or regtech, but he pointed out that it would be unfair to cover the costs by using taxpayers’ money.
Merger and acquisition may be the future trend for P2P lending sector (Xing Ping She), Rated: A
Recently, Dianrong announced that the company has purchased Quark Finance, Quark Credit Workshop and its related branches and teams. Before that, the merger has been spread for a long time. The merger seems indicate a direction for P2P lending platforms: small platforms might be realise the compliance requirements by being merged, and big platforms also could expand and increase their market share through the acquisition. Thus, mergers and acquisitions might become the next new wave of the P2P lending industry in China.
PwC: Fintech Survey China 2017 (Crowdfund Insider), Rated: A
There are three main areas of finance that are poised to be irreversibly changed, according to PwC. Consumer banking, investment & wealth management and transfers & payments are becoming pretty much all digital and data driven.
Some high level bullet points on China and Fintech include:
- 68% of financial institutions expect to increase Fintech partnerships in the next three to five years
- 85% believe mobile apps are the fastest growing customer channel
- 71% regard price wars as one of the challenges of Fintech
- Personal loans are at the top of the list for moving to Fintech over the next 5 years
Download the full report here.
German fintech factory FinLeap raises EUR39 million (Finextra), Rated: AAA
Bricknode: Reporting To fFnancial Regulators With The XBLR Format Creates Confusion (Mondovisione), Rated: A
Financial institutions of various types are required to conduct periodic reporting to local regulators, like the Swedish Financial Inspection and EU-authorities like the European Banking Authority. Following the financial crisis of 2007/2008 numerous resolutions were past to increase regulations of the participants in financial markets. These initiatives are now being implemented regularly. Both MiFID II and MiFIR are scheduled to be implemented as of January 2018 with extensive reporting requirements and scarce information of how this should be implemented practically. During 2017, financial institutions and FinTech companies were impacted by EU-reporting in practice. One example is the reporting file format called XBLR were a lot of confusion exists.
Fintech Use Reaching ‘Mass Adoption’ Among Digital Consumers (The Financial Brand), Rated: AAA
Findings from the EY Fintech Adoption Index 2017, published by EY, indicate that fintech firms are approaching mass adoption among digitally active consumers. Leveraging digital technology, combined with personalized solutions, fintech firms are differentiating the customer banking experience. Simplicity, clean design, personalization, real-time insights and transparency are the defining components of these new solutions.
The four key themes that emerged from the 2017 EY Fintech Adoption Index were:
- Fintech services have reached mass adoption in most global markets
- New services and players are driving increased adoption
- Fintech users prefer digital channels and technologies
- Fintech adoption will continue to gain momentum
According to the EY report, some of the primary strategies used by fintech firms to gain traction include:
- Offering a service for free or at a much lower cost that traditionally had a cost associated
- Solve a problem an existing customer base
- Provide an entirely new service
- Create word-of-mouth advocates
- Build a strong brand identity
- Leverage highly targeted marketing
The most dramatic variance between fintech users and non-users is the ways consumers prefer to manage their lives. According to EY, “64% of FinTech users prefer managing their lives through digital channels, compared to 38% of non-FinTech users. FinTech users are also more likely to be users of non-fintech digital platforms, such as on-demand services (digital taxis, online food, etc.) and the sharing economy (bike and housing rentals).”
Alt Lending platform OxyLoans plans to raise Rs 200 cr debt (MoneyControl), Rated: AAA
The city-based alternative lending platform, OxyLoans, today said it is planning to raise a debt of Rs 200 crore to meet the requirements of borrowers.
He said they have over 240 asset-backed applications from borrowers, and expressed hope to complete the process (raising debt of Rs 200 crore) within six months.
Thatavarti further said that OxyLoans, which has set a loan disbursal target of Rs 156 crore in three years, has facilitated loans to the tune of Rs 64 crore in the last nine months.
This startup is an end-to-end digital platform for lenders and borrowers – TachyLoans (KnowStartup), Rated: A
TachyLoans is an online lending marketplace catering to both Individuals & Small and Medium Enterprises (SMEs). Their platform is based on Peer-to-Peer lending paradigm that uses the proprietary credit decision model designed with some of the best and innovative practices in the financial industry using the cutting edge technologies like Artificial Intelligence & Machine Learning and is built through state of the art technology.
Founded by Brahma, TachyLoans is based out of Bangalore and was established in the year 2016. Brahma brings to the table more than 20 years experience and expertise in Retail Banking, Sales, Marketing and Operations.
When airlines don’t have parachutes, why should P2P lending platforms have LPF? (India Times), Rated: A
The regulations will lay out the corporate structure that each of the platforms would need to follow and most importantly the DOS and Don’ts related to dealing with lenders and borrowers. However, of late, there has been an interesting trend of platforms coming up with a lender protection fund. What does it do? In case a lender loses the money he has extended to a borrower as a loan, the lender protection fund is expected to cover the losses for the investor. On the face of it, it sounds like a good idea, but if you dig deeper, there are several issues.
The flyer is aware of the risk, but he trusts the plane. You have a life vest under your seat for an emergency landing on water, but you do not have an escape pod that can be activated if a flight is about to crash. Similarly, the lender on a P2P site should be able to trust that the lending platform has built a system that can help Lender earn higher returns by mitigating risk. While a P2P platform cannot shirk its responsibilities when it comes to investor protection, having a fund to mitigate losses is not the answer. Proper systemic safeguards and strong ethics should alone suffice.
Launching LPF would in some ways signal that a platform does not have confidence in its own credit evaluation and risk-mitigation system.
Paytm invests in Mobiquest (e27), Rated: B
Fintech non-profit launches database for financial technology startups in Singapore (Tech in Asia), Rated: AAA
The Singapore Fintech Association (SFA) announced today it has created an online directory for fintech companies based in the city-state. The database contains a short description of each company and information about its founding team, funding status, and business model.
Currently listing around 300 startups, the database is free to use and data is maintained by the companies themselves. The directory looks similar to Crunchbase and Tech in Asia’s own startup database, but it’s exclusive to fintech.
The SFA built the directory in collaboration with US data company Let’s Talk Payments and its Medici platform, which provides information and resources about the fintech industry.
South Korean FinTech Firms To Offer International Money Transfer Services (ETH News), Rated: A
According to The Korea Herald, officials at South Korea’s Financial Supervisory Service (FSS) announced last week that they expect approximately 40 FinTech firms to provide international money transfer services starting August 15.
Per Yonhap News Agency, South Korea’s international money transfer market currently totals approximately 10 trillion won ($8.7 billion). Opening the market to FinTech firms will encourage competition and drive down costs to consumers since the companies can offer money transfer services at much lower prices than traditional banks.
Single transfers via FinTech firms will be capped at $3,000, and individual annual limits will be set at $20,000. For FinTech firms to qualify for the FSS permit, they must possess 2 billion won ($1.77 million) and a debt-equity ratiobelow 200 percent.