- Today’s main news: Goldman’s traders have worst first half of Blankfein’s reign. RateSetter hit hard by struggling loans. RateSetter offers investors free sell out option. LandlordInvest hits 1M GBP lending milestone. Revolut offers free personal accounts for Europeans.
- Today’s main analysis: Goldman has worst first half in Blankfein era.
- Today’s thought-provoking articles: 35 institutional investors raise stakes in Yirendai. A vision to transform UK financial services industry. China leaps over U.S. in payments tech. Getting paid to run up debt. What the SoftBank Vision Fund means for tech investing.
- Goldman’s traders have worst first half of Blankfein’s reign.
- 35 institutional investors raise stakes in Yirendai. AT: “This follows on the heels of Yirendai’s lawsuit being dropped. Institutional investors are getting more confident.”
- Millennials want a bank close to home. AT: “We’ve seen the reports before that millennials want a bank account. However, this survey shows that they want a bank account close to home with a brick-and-mortar branch. It seems that millennials aren’t interested to much in online banking, but this is just one survey.”
- Tomorrow wants millennials to set up mobile trust funds. AT: “I wonder how many non-wealthy individuals will want a trust fund?”
- Urban FT acquires iParse.
- 4 tips for developing a product around an unknown concept. AT: “This is an article written by a marketing professional. As a content marketer with more than a decade experience writing for brands positioning themselves online, I’d have to say I agree with this 100%, particularly points 1 and 4. This advice is more than apt for alternative lenders.”
- Recent IPO movers.
- RateSetter hit by 80M GBP in struggling loans.
- RateSetter offers free sell out option. AT: “RateSetter recognizes its own mistake and is trying to make it right with investors. We applaud the transparency.”
- LandlordInvest reaches 1M GBP in lending. AT: Congratulations.”
- A vision for a transformed financial services industry. AT: “The focus here is on the broad financial services industry, but it’s well worth the read.”
- P2P lending model involves market intervention.
- OFF3R report says equity crowdfunding defies Brexit uncertainty.
- Giving customers what they want in retail banking.
- MoneyGuru hires technology veteran to head up site.
- China leapfrogs U.S. in payments technology.
- China’s internet sector grows up.
- Lufax sets up shop in Singapore.
- Revolut intros free personal accounts for Europeans. AT: “This is how you attract customers. A heavy marketing campaign across Europe should produce great results.”
- Getting paid to run up debt. AT: “This should increase competition.”
- Citi to set up in Frankfurt.
- Capital.com raises $25M.
- United States
- Goldman’s Traders Turn In Worst First Half of Blankfein’s Reign (Bloomberg), Rated: AAA
- 35 INSTITUTIONAL INVESTORS ARE RAISING STAKES IN YIRENDAI LTD. (YRD) (Post Analyst), Rated: AAA
- For Millennials, It’s Hip To Have A Traditional Bank (PYMNTS), Rated: A
- A new fintech startup wants to democratize trust funds (Business Insider), Rated: A
- Urban FT Acquires iParse To Bridge The Mobile Banking Gap (PYMNTS), Rated: A
- 4 Tips for Developing a Product Around an Unknown Concept (Entrepreneur.com), Rated: A
- Recent IPO Movers of the Week (July 10-14, 2017) (Money Morning), Rated: B
- United Kingdom
- Peer-to-peer lender Ratesetter hit by £80m of struggling loans (The Guardian), Rated: AAA
- RateSetter gives investors option to sell out free due to wholesale “interventions” (P2P Finance News), Rated: AAA
- LandlordInvest reaches £1m lending milestone (P2P Finance News), Rated: AAA
- A vision for a transformed, world-leading industry (The City UK), Rated: AAA
- The peer-to-peer lending model involves a fair bit of intervention in the market (FT Alphaville), Rated: A
- OFF3R Report Says Equity Crowdfunding Defies Brexit Uncertainty in First 6 Months (Crowdfund Insider), Rated: A
- Retail Banking IT – giving customers what they want (IT ProPortal), Rated: A
- Guru Appointed to Head Up Comparison Site (Fintech Finance), Rated: B
- China Is Leapfrogging U.S. In Payments Technology, Ex-Ambassador Max Baucus Says (Forbes), Rated: AAA
- China’s Internet Sector Grows Up (Institutional Investor), Rated: A
- Lufax international platform starts up in Singapore (Xing Ping She), Rated: A
- European Union
- Revolut Introduces Free Personal Euro Accounts Following $ 66 Million Raise (Crowdfund Insider), Rated: AAA
- Getting Paid to Run Up Debt (Handelsblatt.com), Rated: AAA
- Citi to set up a ‘major new trading operation’ in German city after Brexit (Business Insider), Rated: A
- Cyprus fintech startup Capital.com raises $ 25 million (Tech.eu), Rated: A
- What The SoftBank Vision Fund Means For Tech Investing (CB Insights), Rated: AAA
- Australia/New Zealand
- VicSuper launches digital advice suite (Money Management), Rated: A
- Surging investor confidence in clean energy drives record $ 2 billion investment from CEFC (Mozo), Rated: B
- RentoMojo raises $ 10 mn from Bain Capital Ventures, Renaud Laplanche (The Hindu Business Line), Rated: AAA
- Indonesia: P2P app Julo raises seed funding from Skystar Capital, others (Deal Street Asia), Rated: AAA
- How Singapore-based P2P lending platform Crowd Genie aims to help underbanked SMEs grow (e27), Rated: A
- Will robots narrow the financial advice gap? (Biz Community), Rated: A
Goldman’s Traders Turn In Worst First Half of Blankfein’s Reign (Bloomberg), Rated: AAA
Goldman Sachs Group Inc. traders turned in their worst first-half performance since Lloyd Blankfein rose from that business to become chief executive officer in 2006.
Investment-banking revenue fell 3 percent to $1.73 billion from a year earlier, better than the $1.59 billion prediction. Investment management as well as the Investing and Lending business also surpassed expectations.
35 INSTITUTIONAL INVESTORS ARE RAISING STAKES IN YIRENDAI LTD. (YRD) (Post Analyst), Rated: AAA
(NYSE:YRD) enjoyed a 74.75% run-up in share price since hitting record low of $18.3. The stock managed 3.53% rise and now stands at $31.98 as of July 17, 2017.
Institutional investors currently hold around $143 million or 7.7% in YRD stock.
Yirendai Ltd. 13F Filings
At the end of Mar reporting period, 35 institutional holders increased their position in Yirendai Ltd. (NYSE:YRD) by some 1,343,454 shares, 22 decreased positions by 2,144,331 and 5 held positions by 1,150,551. That puts total institutional holdings at 4,638,336 shares, according to SEC filings. The stock grabbed 21 new institutional investments totaling 973,854 shares while 12 institutional investors sold out their entire positions totaling 1,445,115 shares.
For Millennials, It’s Hip To Have A Traditional Bank (PYMNTS), Rated: A
In a survey held from the end of June into early July and conducted by SurveyMonkey, the web-based survey firm queried more than 1,000 adults above the age of 18, 290 of which were defined as 18- to 34-year-olds: millennials.
Among the findings in the How We Will Pay study: 83 percent of respondents wanted to be able to use an ever-burgeoning roster of new devices to conduct commerce. But, interestingly, when it came to actually transacting, 77 percent of those surveyed said trust remained a key factor when deciding who they want enabling those transactions.
People tend to trust the banks, financial institutions and bank card networks where payments relationships are already in place and already are known to consumers, according to the data.
Most Americans, at 63 percent, have used peer-to-peer payments, said SurveyMonkey. PayPal claimed the lion’s share there at about 80 percent across all demographics. Venmo remains a distant second, at 11 percent, with even greater adoption among millennials at 30 percent. Peer use also mattered to those surveyed, as 28 percent of millennials used the platform because their friends and family members did.
Eighty percent of surveyed millennials wanted the option to visit a brick-and-mortar bank branch based near their towns. In fact, the banks without a tangible footprint in a millennial-centric town lose out, as members of that demographic claimed they would be less likely to open an account with a bank were it not to have a physical branch nearby, said SurveyMonkey.
A new fintech startup wants to democratize trust funds (Business Insider), Rated: A
Now, app-only fintech Tomorrow, which launched services across the US this week, wants to help this group access inheritance products: In the US, 74% of millennials don’t have a will, and 50% of millennial households would struggle to pay their bills without their primary wage earner, according to studies Tomorrow cites. The company’s raised $2.6 million in Seed funding from backers including Plug and Play, Allianz Life, and Curious Capital. It’s now available for iPhone, and will release an Android version later.
Tomorrow aims to show that trust funds aren’t just for the wealthy, and can be powerful inheritance management tools. Its app constructs a free will, and photos of specific valuable items uploaded by the user get assigned to a free trust, and it connects with third-party services to pull in property valuations. The user can then specify who should inherit what, and if they decide to open a trust, which assets from the will should go into the trust fund.
Urban FT Acquires iParse To Bridge The Mobile Banking Gap (PYMNTS), Rated: A
When it comes to mobile banking, there’s often a massive gap between the consumer’s experience with a big bank and with a smaller regional operator or credit union. The big banks have embraced mobile as a critical part of their overall delivery experience — with custom mobile banking apps, proprietary mobile wallets, biometric-authentication, cardless ATMs and more.
But when it comes to the smaller players serving more local populations, the well of mobile innovation can run dry rather quickly and for many reasons.
“A staggering statistic I came across recently really gave me pause. A full 42 percent of credit unions still don’t have mobile banking apps — and it’s not because they don’t want them or don’t think they need them,” Steggall remarked, “but because they don’t have the ability or the resources to do the technical integrations, and they can’t justify the cost.”
While Urban FT’s new products with iParse are for smaller FIs, Steggall told Webster the company also sees a profitable future working with existing payments processors in the market today. Steggall said the iParse solution will help those players — including larger processors already offering their own mobile banking services — better serve their smaller bank and credit union partners.
4 Tips for Developing a Product Around an Unknown Concept (Entrepreneur.com), Rated: A
Being an innovator always comes with the huge challenge of educating potential investors, developers and end users on the significance of a totally new product or service. When bitcoin hit the market, its leaders struggled to answer the same question: “Why is this necessary?”
When you’re building something new, your mistakes form the blueprints future entrepreneurs will study. If you’re a trailblazer in a novel space, here are four ways to forge ahead.
1. Don’t sell — educate.
YieldStreet, an online alternative investments platform, created YieldStreet University, which combines video content, infographics and other visuals to help simplify complex concepts about alternative investing for its customers.
2. Slow your roll.
Faster isn’t always better. When you’re dealing with an unknown concept, speed kills the sales process. If your service or product is new to the market, resist the temptation to immediately convert cold traffic. First, take time to make sure your clients or customers understand what they’re working with and how to utilize your product or service to its fullest potential.
3. Be open about swings and misses.
Honesty builds trust. One study from Label Insight showed 73 percent of participants were willing pay more for more transparent brands.
4. Focus on your mission, not personas.
Don’t concern yourself with selling to anyone in Box X or Box Y. If you do, you’ll end up tailoring your product to suit demographics instead of your vision. Identify your mission and purpose, and sell that.
Recent IPO Movers of the Week (July 10-14, 2017) (Money Morning), Rated: B
China Rapid Finance Ltd. (NYSE: XRF) soared 20.6% for the week. The online consumer-lending marketplace announced on Monday that it had reached the 20 million-loan milestone on its platform.
Peer-to-peer lender Ratesetter hit by £80m of struggling loans (The Guardian), Rated: AAA
The peer-to-peer lender Ratesetter has been hit by £80m of struggling loans in the first major setback for the nascent online lending sector.
The company said it would use its own funds to prevent losses being taken by its 50,000 users, who are mostly small investors using the website in order to lend their savings to other individuals and benefit from higher interest rates than are available at high street banks.
The company admitted that it had made £36m of loans to a company called Vehicle Trading Group Limited (VTG), a motor finance holding company that then fell into administration because it had taken on too much debt.
It also loaned a further £12m to an advertising company called Adpod, which during 2015 became 50% owned by VTG. The website admits that the loans, of which £8.5m are still outstanding, should not have cleared its own credit policy.
RateSetter gives investors option to sell out free due to wholesale “interventions” (P2P Finance News), Rated: AAA
RATESETTER is giving all its lenders an option to sell out of their investment free of charges, as part of its wind-down of exposure to its wholesale lending portfolio.
The peer-to-peer platform wrote to investors on Tuesday to outline “interventions” it has made on three former wholesale lending partners.
LandlordInvest reaches £1m lending milestone (P2P Finance News), Rated: AAA
BUY-TO-LET peer-to-peer platform LandlordInvest has passed the £1m lending milestone.
The property lender, which launched in December 2016, has amassed 700 investors and completed six loans over the past seven months.
A vision for a transformed, world-leading industry (The City UK), Rated: AAA
TheCityUK and PwC’s Strategy& have developed a vision for the future of the industry, drawing on extensive engagement with leaders across the industry and a rigorous fact-based assessment. By 2025:
1) The industry will have transformed itself to be highly digitised, innovative and customer-centric. It will be a leader in cyber security, using data in a secure and sophisticated way. This will be alongside new technologies, to drive forward significant improvements in the way services are delivered. Firms will be consistently and relentlessly doing what is right for their customers.
2) London will still be one of the most important and attractive international centres for financial services and global business, retaining the full ecosystem of financial and related professional services. It will continue to play an important domestic role and be a leading FinTech centre that keeps the UK at the forefront of financial innovation.
3) Regional and national financial centres will have become more important within the UK industry. There must be a strong supply of local talent with the relevant skills, competitive costs and high productivity. Banking, insurance and asset management centres outside of London will continue to develop, hosting more headquarters of major companies. While other regional and national hubs will focus on enhancing specialist roles which serve both UK and global markets.
Access the full report here.
China Is Leapfrogging U.S. In Payments Technology, Ex-Ambassador Max Baucus Says (Forbes), Rated: AAA
Former U.S. Ambassador to China Max Baucus on Saturday lauded China’s can-do spirit and cited the country’s rush to online payments as an area where the country was overtaking the United States.
Baucus was speaking at an annual LendIt fintech conference held in Shanghai that attracted more than 2,000 participants.
“Apple Pay is trying to be an accepted mode of payment in the United States but it is catching up very slowly,” he said. “It’s disadvantaged, I think, compared with China and other Asian countries’ emerging payment systems. Why? Because established legacy institutions such as banks and credit card companies, while still useful, will soon be overtaken by the new innovative technology being developed here and in other Asian countries.”
China’s Internet Sector Grows Up (Institutional Investor), Rated: A
Leading investors who specialize in financial technologies and are taking stakes in new technology startups in the country say China is no longer an innovation laggard and in fact is taking a commanding lead in specific areas.
Take online payments. Two Chinese Internet giants, Alibaba Group Holding and Tencent Holdings, already hold strong leads over their U.S. counterparts in this area. Alipay, for instance, is Alibaba’s online escrow payment system that now counts more than 630 million users globally, of which 450 million are in China. Tencent’s messaging app, WeChat, boasts 900 million users, and its WeChat Pay service has about 600 million active users. Both Alipay and WeChat Pay allow their users to make transactions all over the world using their mobile phones, notes Jones, adding that at present not a single U.S. rival can offer a similar global product.
Lufax international platform starts up in Singapore (Xing Ping She), Rated: A
On 17th July, Ping An Insurance announced the affiliate Lufax started a international business platform, Lu International Financial Asset Exchange in Singapore. Lu International was known to have got the capital market service licence(CMS) approved by MAS. It is also the first Chinese fintech company to have a CMS in Singapore, and will start for operation in the third quarter of 2017.
Lu International was registered in Singapore in January 2017, after licensed it will provide a series of wealth management services including securities trading, asset management and custody for investors with overseas bank accounts or assets.
Lu International aim to provide pure online banking services for the Asian middle class, and the investment amount will be among $10 thousand to $1 million,according to Gregory D Gibb, the CEO of LufaxHoldingLtd. The initial product line of Lu International is relatively simple, mainly including monetary fund, fixed income products, bond fund, REITs fund and ETF.
What The SoftBank Vision Fund Means For Tech Investing (CB Insights), Rated: AAA
The SoftBank Vision Fund, first announced in October 2016, has now closed at least $93B of a target $100B to invest in global technology companies – making it the largest tech investment fund in history.
$100B is an unprecedented sum for a single fund, totaling almost exactly the same amount that all VC-backed companies received in 2016 ($100.8B across 8,372 deals globally, per CB Insights data). Yet the fund’s massive size is raising concerns among some investors, who fear that an influx of high-dollar rounds could overinflate the market and prolong exits while crowding out competing investors.
With both Saudi Arabia and the UAE — which have contributed a combined $60M of sovereign capital to the fund — counting on the Vision Fund’s investments to diversify their national economies, the stakes are high. Other high-profile investors are also placing bets with the Vision Fund: The Vision Fund has closed contributions of $1B or less from Apple, Qualcomm, Sharp, Foxconn, and Larry Ellison’s family office. (SoftBank’s own $25B rounds out the $93B secured so far.)
Cyber-attacks significant threat but RBNZ says no need for prescriptive requirements (NBR), Rated: AAA
Cyber-attack poses a significant threat to the global financial system but the Reserve Bank has decided not to introduce more prescriptive requirements at this stage due to the swiftly changing nature of both the threats and the technology, said Reserve Bank head of prudential supervision Toby Fiennes.
Fiennes said the central bank did not believe prescriptive regulations would appreciably improve the outcome, when the technology and threat landscape are both changing so rapidly.
VicSuper launches digital advice suite (Money Management), Rated: A
VicSuper has launched a digital advice suite called Beeline to strengthen member engagement.
The digital advice service would act as an online coach to provide members with access to financial advice 24 hours a day, seven days a week, free of cost to members, with the fund saying it would provide super advice at scale.
Areas of financial advice would include additional contributions and investment asset allocation in their superannuation. The service would also provide general advice to members on retirement adequacy and budgeting goals.
Surging investor confidence in clean energy drives record $ 2 billion investment from CEFC (Mozo), Rated: B
The CEFC assisted in a number of clean energy projects in 2016-17 including the establishment of a green loan marketplacewith peer-to-peer lender RateSetter, 500 new energy efficient homes for low income families in New South Wales and ten large-scale solar projects in regional Queensland, New South Wales and Victoria.
RentoMojo raises $ 10 mn from Bain Capital Ventures, Renaud Laplanche (The Hindu Business Line), Rated: AAA
RentoMojo, a consumer product leasing start-up, has raised $10 million (over Rs. 64 crore) from Bain Capital Ventures and Renaud Laplanche.
The series B funding also saw participation from existing investors, Accel Partners and IDG Ventures, Rentomojo said in a statement today.
The funds raised will be used to further strengthen the product, finish building a stellar leadership team, and expand into new categories and geographies, it added.
Indonesia: P2P app Julo raises seed funding from Skystar Capital, others (Deal Street Asia), Rated: AAA
Indonesian peer-to-peer (P2P) lending startup Julo has raised an undisclosed amount of investment in a seed round led by Skystar Capital, along with East Ventures, Convergence Ventures, according to an announcement. A few notable angel investors also participated in the round.
Julo is focussed on financial inclusion in Indonesia by helping over 100 million people obtain loans for their various personal use.
Loan applicants can carry out the process from their phones through Julo’s app, where they submit pictures of personal documents and then receive their loan within 24 hours upon successful verification.
How Singapore-based P2P lending platform Crowd Genie aims to help underbanked SMEs grow (e27), Rated: A
One of the recipients of the CMS is Singapore-based P2P lending platform Crowd Genie. Like many of its ilk, Crowd Genie was founded by entrepreneurs who saw that certain traditional financial services were rigid and could not serve certain profiles of clients.
Ideally, the profile of borrowers would be SMEs turning over about S$1 million (US$731,000) to S$5 million (US$3.66 million) in revenue yearly, and would have had a bank loan and a corporate bank account; they would also have to be in operation for about two to four years, and need a short-term funding gap that the banks are not able to extend.
In place of just traditional financial metrics, Mehra and his co-director Bikash Saha, who has experience in a credit rating agency and retail banking, leverage a hybrid of machine-based learning algorithms combined with hands-on groundwork to assess the credit risk profile of potential borrowers.
Part of the reason Crowd Genie is still heavily reliant on human input is that its machine-learning algorithm is currently a work-in-progress. Accurate data analytics can only be achieved once there are enough actionable data points.
Mehra says the next review of the algorithm will take place at the end of the year, when Crowd Genie has accumulated about 300 – 400 cases.
Currently, institutional investors are qualified to be lenders on Crowd Genie; retail investors are barred.
Will robots narrow the financial advice gap? (Biz Community), Rated: A
Interestingly, however, a study by international investment house, Legg Mason, personal interaction is still important for these younger investors – 53% of participants in this group indicated that technology can never truly replace personal customer service. This was particularly relevant when it came to retirement and tax planning, but was of less importance when it came to tracking the stock market.
Furthermore, humans can remove irrelevant data from their memory, which allows for increased learning. Robots, however, store all data, which begs the question around the long-term competency of robo-advice.