- Today’s main news: SoFi Ventures to support financial services startups. Prosper’s valuation dives 70%. Fundrise drops minimum investment to $500 for New Starter Portfolio Offering. UK P2P lenders asked to reveal past defaults. Hargreaves Lansdown cancels special dividend. FinMason expands into Prague. PledgeMe close to profitability.
- Today’s main analysis: LendingClub is looking beleaguered. Australian fintech update.
- Today’s thought-provoking articles: Surge in fintech financings, PeerIQ closes Series A. Prosper in talks on deal that will slash its value. Analog regulations for traditional banking don’t foster financial services innovation.
- SoFi Ventures to support financial services startups. AT: “With SoFi’s name attached, they should see a long line of potential funding opportunities.”
- Surge in fintech financings, PeerIQ closes Series A. AT: “A few thoughts from PeerIQ’s POV.”
- LendingClub is looking beleaguered. AT: “The future is looking bright, however.”
- Prosper’s valuation dives 70%.
- Fundrise drops minimum investment to $500 in New Starter Portfolio offering.
- Prosper in talks on deal that would slash its value.
- Small Change completes first RECF offer under Reg CF. AT: “I’m anxious to see how RECF opportunities expand for non-accredited investors.”
- SoFi to finally file for IPO? AT: This is the question everyone is asking after the publication of Mike Cagney’s recent letter to investors.”
- PolicyGenius vs. Lemonade on renters insurance.
- Fluid strikes strategic partnership with Nomad Credit.
- How startups get funded before they’re ready for VC.
- Helping finance startups sell in New York.
- Make Delaware the fintech capital.
- Is an online business loan your best option?
- P2P lenders to be asked to reveal past defaults.
- Hargreaves Landsdown cancels special dividend.
- Distribution still keeping the wheels of credit turning.
- LendInvest closes retail bond offer early.
- Kantox raises 4.6M GBP.
- LendingCrowd offers cashback incentive.
- Regulator confirms P2P business lenders exempt from APR rules.
- Can P2P lending kill non-banking financial companies?
- Should you go with the crowd?
- Hexindai, China UnionPay partner on in-app mobile payments.
- Huge internet finance firms heading for assessment.
- Inclusive finance will lift fintechs.
- FinMason expands into Prague.
- Vendorly adds three new companies to vendor oversight platform.
- iFunded tackles large project with bond issue.
- Moneyfarm expects to be profitable by 2019.
- Kildare businesses raise over 1M Euro through Linked Finance.
- Analog regulations built for traditional banking not conducive to fostering innovation. AT: “A report well worth the read.”
- Fintech and investment banking.
- Alt-lending enjoys sudden investment revival.
- PledgeMe getting close to profitability.
- Australian fintech update (infographic).
- Non-bank loans gain momentum.
- Will property crowdfunding take off?
- Wadhawan Global invests Rs 175 crore in Neyber.
- Why PPF is a safety jacket for P2P lending investors.
- MAS consultation on robo-advisors in Singapore.
- MAS establishes payments council.
- Green Packet an emerging fintech play.
- Hyperintelligent banking in fickle era of social media.
- Fintech invests in Gibraltar Stock Exchange.
- United States
- SoFi Ventures to support financial services startups (Pitchbook), Rated: AAA
- Surge in FinTech Financings; PeerIQ Closes Series A (PeerIQ), Rated: AAA
- Lending Club Is Looking Beleaguered Heading Into Q2’s Do-Or-Die Earnings (Seeking Alpha), Rated: AAA
- Fintech lender Prosper’s valuation dives 70% in latest funding round (Biz Journals), Rated: AAA
- Fundrise Drops Minimum Investment to $ 500 in New Starter Portfolio Offering (Crowdfund Insider), Rated: AAA
- Online Lender Prosper in Talks on Deal That Would Slash Its Value (WSJ), Rated: AAA
- Small Change Completes First Real Estate Crowdfunding Offer Under Reg CF (Crowdfund Insider), Rated: A
- WSFS Introduces Private Student Lending Solutions (WSFS), Rated: A
- SoFi to finally file for IPO? (Housingwire), Rated: A
- Renters Insurance: PolicyGenius vs. Lemonade (Coverager), Rated: A
- Fluid Strikes Strategic Partnership with Nomad Credit (LendIt), Rated: B
- Here’s how start-ups get funded before they’re ready for venture capital (CNBC), Rated: B
- Countering West Coast Pull, by Helping Finance Start-Ups Sell in New York (The New York Times), Rated: A
- Make Delaware the financial technology capital (Delaware Online), Rated: A
- Is an Online Business Loan Your Best Option? (Nav), Rated: B
- United Kingdom
- UK’s peer-to-peer lenders to be asked to reveal past defaults (Financial Times), Rated: AAA
- Hargreaves Lansdown Cancels Special Dividend After Regulator Warns on Capital (The New York Times), Rated: AAA
- Distribution still keeping the wheels of credit turning (Computer Weekly), Rated: A
- LendInvest closes retail bond offer early (P2P Finance News), Rated: A
- Kantox raises £4.6 million from investors as it targets profitability (Business Insider), Rated: A
- LendingCrowd offers cashback incentive (P2P Finance News), Rated: A
- Competition regulator confirms P2P business lenders exempt from APR rules (P2P Finance News), Rated: A
- Can P2P Lending Kill NBFCs? (TechBullion), Rated: A
- Should you go with the crowd? (MoneyWeek), Rated: B
- Hexindai Partners with China UnionPay to Launch a Mobile Payment Function to Its App (PR Newswire), Rated: AAA
- Huge Internet finance firms to be assessed (Shanghai Daily), Rated: A
- Inclusive finance to lift fintech firms (China Daily), Rated: A
- European Union
- FinMason Announces International Expansion: Opens Operations in Prague (Crowdfund Insider), Rated: AAA
- Vendorly Adds Three New Companies to Vendor Oversight Platform (Markets Insider), Rated: AAA
- iFunded Tackles Large Project With Bond Issue (Crowdfund Insider), Rated: A
- Robo-adviser Moneyfarm expects profitability by 2019 (Citywire), Rated: A
- Kildare businesses raise over €1m through Linked Finance (Leinster Leader), Rated: B
- Analog Regulations Built for the Traditional Banking Space are not Conducive to Fostering Innovation in Financial Services (Crowdfund Insider), Rated: AAA
- FinTech and the world of investment banking (Brave New Coin), Rated: A
- Alt-Lending Enjoys Sudden Investment Revival (PYMNTS), Rated: A
- Australia/New Zealand
- PledgeMe closes in on profitability in 2017, weighs up new product development (NZ Herald), Rated: AAA
- Fintech Australia Shares 2017 Australian Fintech Update (Infographic) (Crowdfund Insider), Rated: AAA
- Non-bank loans gain momentum in tough lending regime (The Sydney Morning Herald), Rated: A
- Will property crowdfunding take off in Australia? (Your Investment Property), Rated: A
- Wadhawan Global takes second UK bet, invests Rs 175 crore (India Times), Rated: A
- Why PPF is like a safety jacket for investors of P2P lending (India Times), Rated: A
- Consultation by MAS on the provision of robo-advisory services in Singapore (Lexology), Rated: AAA
- MAS Establishes Payments Council (LATTICE80 Email), Rated: A
- Green Packet an emerging fintech play (The Star), Rated: A
- Hyperintelligent banking in the fickle era of social media (Inquirer.net), Rated: A
- Fintech Buys Stake in Exchange (finews), Rated: B
- The role of financial advisers in raising national savings levels (Biz Community), Rated: A
- Carilend seeing ‘phenomenal’ growth (Loop News Barbados), Rated: AAA
SoFi Ventures to support financial services startups (Pitchbook), Rated: AAA
SoFi, a provider of online lending and wealth management services, has launched a strategic VC arm led by Logan Allin, an advisor at the company since 2012. Axios previously reported that SoFi would seek outside LP commitments and commit capital to the fund itself.
Surge in FinTech Financings; PeerIQ Closes Series A (PeerIQ), Rated: AAA
This past week featured a slate of fintech venture financings. Kabbage (Series F: $250M), Dianrong (Series D: $220M), Bread (Series B: $126M), and Juvo (Series B: $40M) all announced major financings.
And last, but not least, PeerIQ announced our $12M Series A round, led by TransUnion, Hearst Financial Venture Fund, and Macquarie Group.
For PeerIQ, it means continuing to execute upon the vision we shared at our seed financing just over two years ago. This fall, we will be launching our first products uniting TransUnion’s dataset with the PeerIQ analytics platform.
Along with its investment, Hearst brings several major holding companies, including auto data provider, BlackBook, and Fitch Ratings, the global ratings provider, which opens up many new value propositions for our customers. Finally, we are working hand in hand with Macquarie, a major provider of capital to the fintech space, to improve tools for warehouse lenders and their borrowers alike.
Lending Club Is Looking Beleaguered Heading Into Q2’s Do-Or-Die Earnings (Seeking Alpha), Rated: AAA
Fast forward to Monday. That’s when Lending Club is expected to log another progressive quarter, cranking revenue up to $136.2 million, and whittle the per-share loss back to only one cent; the company lost nine cents per share on $103.4 million in sales for the same quarter a year earlier. Not only is revenue expected to keep growing beyond that, Lending Club is expected to swing back to a profit in Q3, of two cents per share.
Fintech lender Prosper’s valuation dives 70% in latest funding round (Biz Journals), Rated: AAA
Fundrise Drops Minimum Investment to $ 500 in New Starter Portfolio Offering (Crowdfund Insider), Rated: AAA
The Fundrise Starter Portfolio starts with a $500 minimum and includes a 9.25% annual dividend yield and zero advisory fees through the end of the year. If you want to try it out the Starter Portfolio comes with a 90 day guarantee. If you have a change of heart, Fundrise will purchase your investment back at the original investment amount. Not a bad deal to test the waters.
Online Lender Prosper in Talks on Deal That Would Slash Its Value (WSJ), Rated: AAA
Prosper Marketplace Inc. is in talks to sell a roughly 10% stake to a Chinese conglomerate in a deal that could reduce the online lender’s valuation by more than two-thirds, according to people familiar with the matter.
Under the terms of the proposed transaction, Linca would invest $50 million in Prosper at a valuation of about $550 million. No deal has been finalized, however, and there was no guarantee the parties would come to an agreement, the people said.
David Kimball, who took over as Prosper’s CEO last December, has been focused on making the company profitable. In February, to ensure a funding source for the company’s loans, Mr. Kimball agreed to sell $5 billion worth of Prosper’s loans to a consortium of investors over the next two years along with warrants to purchase shares representing 35% of the company, The Wall Street Journal previously reported.
Small Change Completes First Real Estate Crowdfunding Offer Under Reg CF (Crowdfund Insider), Rated: A
Real estate investment crowdfunding site Small Change has closed its first real estate offering available to everyone – not just accredited investors.
Small Change reports that investors have funded projects via their platform in cities including Pittsburgh, Los Angeles, New Orleans, and Washington D.C. These projects are as diverse as the cities in which they’ve been built. They include Pittsburgh’s first tiny house, a historic main street mixed-use conversion, and affordable housing in Washington, D.C. with the largest residential solar install in the country.
Small Change has now completed its first offering open to all investors — a Starter Home Two project by architect Jonathan Tate.
WSFS Introduces Private Student Lending Solutions (WSFS), Rated: A
WSFS Financial Corporation (Nasdaq:WSFS), the parent company of WSFS Bank, today announced that it is now offering Private Student Lending Solutions, expanding its consumer lending product line to bridge the funding gap that exists between the actual cost of higher education and the federal aid, grants and scholarships available.
WSFS is partnering with LendKey.
SoFi to finally file for IPO? (Housingwire), Rated: A
Social Finance, better known as SoFi, first teased it would file for an initial public offering nearly three years ago.
SoFi CEO Mike Cagney appears to be interested in filing for an IPO again.
If SoFi did file for an IPO, it would mark the second major IPO for a housing-related company after a dry spell the last few years.
According to an article in Reuters by Lisa Lambert, “Last year IPOs in the United States fell by more than a third from 2015, and many of those 102 share offerings ended up trading below their debut price.”
Renters Insurance: PolicyGenius vs. Lemonade (Coverager), Rated: A
Yesterday, NYC-based digital broker PolicyGenius announced its expansion to renters insurance. The product is delivered in collaboration with Stillwater.
Another thing happened yesterday. Lemonade announced its renters and homeowner’s insurance is now available to folks in NJ, joining those residing in CA, IL and NY.
Fluid Strikes Strategic Partnership with Nomad Credit (LendIt), Rated: B
Fintech and adtech startup Fluid announced a strategic partnership with Nomad Credit, a financial marketplace for international students in the US; the partnership looks to offer better credit options to this underserved market; together the companies will deliver better financial literacy, credit building tools and more cost effective financial products.
Fledgling businesses rarely command seed or venture funding right out of the gate. But they still need cash to get started.
In reality, there’s a big difference between securing a loan for your business and winning over backers on a site like Kickstarter. Meanwhile, equity crowdfunding, enabled by sites like AngelList, CircleUp and SeedInvest, is generally for businesses that are further along.
Here are the real ways that most entrepreneurs get money at the very start.
- Personal savings
- Credit cards
Countering West Coast Pull, by Helping Finance Start-Ups Sell in New York (The New York Times), Rated: A
Nine of the 15 United States financial technology “unicorns” — companies worth $1 billion or more, as tracked by CB Insights — are in the San Francisco area. These Bay Area companies, which are not public, include the online payments processor Stripe, the online lender Social Finance and the finance website Credit Karma.
For the last seven years, a New York business-backed program — the FinTech Innovation Lab — has been working to stem that West Coast tide by helping financial services start-ups sell their services in New York in an industry where the city clearly dominates: big banks and other finance companies.
Make Delaware the financial technology capital (Delaware Online), Rated: A
One such “industry of the future” that Delaware should be working to attract is the financial technology sector, or what some affectionately call “FinTech. Empowered by mobile computing, these companies use technology to bring better, cheaper, more efficient financial services to citizens. Mobile apps that allow you to send money quickly to friends or family are examples of FinTech products.
Second, banks, of which many call Delaware home, are leading the way in partnering with startups large and small to develop new solutions and businesses in the space.
Third, Delaware’s nimble government and business community make it a flexible, attractive place for innovation.
Is an Online Business Loan Your Best Option? (Nav), Rated: B
There should be no surprise that with the growth of the internet and online banking that online lending would be close to follow. Over time, banks began to accept loan applications online and eventually began to offer full-service lending through the web.
While online loans may be tempting, it is important to consider every option when borrowing a large sum. Comparison shopping is your friend. There are more than 44 different kinds of business financing — that’s a large ocean to navigate before finding the lowest-cost option that fits your business profile and approval chances.
Nonbank lenders typically lend from their own funds or look to the financial markets to raise millions or billions of dollars to lend in smaller increments.
Here are some questions to ask yourself to get started:
- How much money do you need to borrow?
- Do you need an in-person experience or are you comfortable online?
- What are the best interest rates available today?
- What origination fees are you willing to pay?
UK’s peer-to-peer lenders to be asked to reveal past defaults (Financial Times), Rated: AAA
The FCA is expected to announce new measures later this year, including forcing P2P groups to give extra information on the past performance of loans and on how much due diligence they have done on the borrowers’ past performance.
P2P lenders — which had collectively facilitated loans of £7.3bn in the UK by the end of last year, according to research from the Peer-to-Peer Finance Association (P2PFA) — have had plenty of time to prepare for tighter regulation.
The FCA’s latest review is the second in two years, and any measures are unlikely to come in before mid-2018, since the industry will be given between three and six months to respond to the proposals the authority puts forward later this year.
Hargreaves Lansdown Cancels Special Dividend After Regulator Warns on Capital (The New York Times), Rated: AAA
Fund supermarket Hargreaves Lansdown cancelled a planned special dividend on Friday after Britain’s financial regulator said the company needed to shore up its capital base, sending its shares lower.
The company plans to launch its HL Savings product later in the year, a cash deposit service supported by marketplace lending, and this year also launched Lifetime ISAs, or individual savings accounts eligible for a government bonus.
Distribution still keeping the wheels of credit turning (Computer Weekly), Rated: A
A recent survey revealed a third of SMEs in the IT sector have missed out on business opportunities because of a lack of finance. Distributors have long been a major source of credit for SME resellers but with consolidation taking place in distribution through mergers and acquisitions, the sources of credit available to resellers are being reduced.
One distributor that has publicly taken the initiative on credit is Exertis. The company recently introduced a programme called Credit Xtra with the intention of doubling the credit limit for more than 1,650 of its SMB accounts. There is also the option to increase the limit further if resellers remain within the distributor’s credit terms.
Dow believes that it is especially important to offer extra credit at this time of year, when resellers are targeting the peak summertime buying period in education.
LendInvest closes retail bond offer early (P2P Finance News), Rated: A
LENDINVEST has closed its bond offer early, due to strong demand from both retail and institutional investors.
The online mortgage lender launched the five-year notes on 19 July and the offer was scheduled to close at noon on Friday. However, it closed the offer at 11.30am on Thursday.
It said estimated net proceeds from the offer would be just under £49m and confirmed that the issue date will be 10 August.
Kantox raises £4.6 million from investors as it targets profitability (Business Insider), Rated: A
Foreign exchange fintech company Kantox has raised £4.6 million from its existing investors as it aims for profitability.
Filings with Companies House show Kantox raised the sum at the end of July.
Kantox, founded in 2011, made an operating loss of £258,538 on revenues of £2.3 million in 2015, the most recent year accounts are available for.
LendingCrowd offers cashback incentive (P2P Finance News), Rated: A
LENDINGCROWD has launched a £150 cashback offer to investors when adding £2,500 or more amid surging demand from borrowers for business loans.
The offer, which runs until 31 August, is available to new and existing investors and can be used in its Innovative Finance ISA (IFISA.)
Competition regulator confirms P2P business lenders exempt from APR rules (P2P Finance News), Rated: A
NEW pricing rules on business loans will not apply to peer-to-peer lenders, the Competition and Markets Authority (CMA) has confirmed.
From today, all providers of unsecured loans and overdrafts worth up to £25,000 to small- and medium-sized enterprises (SMEs), will have to publish and clearly display the annual percentage rates (APRs.)
It had previously been unclear if this would apply to P2P and alternative finance lenders but the CMA confirmed to Peer2Peer Finance News this morning that it would not.
Can P2P Lending Kill NBFCs? (TechBullion), Rated: A
NBFCs, on the other hand, are the Non-Banking Financial Companies.
Does P2P lending offer such a serious threatto NBFCs and can P2P lending kill NBFCs? We write an informative review to let you know!
While NBFCs mostly deal with the unbanked population, P2P concentrate on the businesses that are usually locked out by traditional lenders and also on the tech-savvy individuals.
While P2P platforms have embraced the use of modern technology, NBFCs have failed in the use of technology. This has really affected their growth as they cannot really compete efficiently in the modern world.
Should you go with the crowd? (MoneyWeek), Rated: B
The returns available to investors aren’t as high as they used to be, but they’re still much, much more than you’d get putting your money in a deposit account. But there’s a very good reason for that. It’s an awful lot riskier too. You’re not covered by the financial services compensation scheme – which safeguards up to £85,000 of your savings if your bank goes bust. That means you cold lose everything.
Hexindai Partners with China UnionPay to Launch a Mobile Payment Function to Its App (PR Newswire), Rated: AAA
Hexindai Inc. (“Hexindai” or “the Company”), a fast-growing consumer lending marketplace in China, today announced that it has partnered with China UnionPay to launch its “Quick Pass” app on Hexindai’s mobile platform. The app will allow investors on the Company’s platform to use surplus funds that have not been lent out to pay for goods and services provided by stores partnered with China UnionPay by scanning a QR code created by the app.
Huge Internet finance firms to be assessed (Shanghai Daily), Rated: A
CHINA will explore methods to include large Internet financial businesses of systemic importance in its macro prudential assessment, said a central bank report issued late Friday.
The first peer-to-peer lending platform opened in 2007, and exploded in popularity, with the number of such platforms increasing 18-fold between 2012 and 2015 and the combined transaction volume jumping about 40 times over the period, said the State Information Center.
Inclusive finance to lift fintech firms (China Daily), Rated: A
Financial technology or fintech companies, particularly those focused on credit analysis, will greatly reduce cost of lending and also reduce credit risks. So, they are likely to experience fast growth on market demand as commercial banks are joining the inclusive finance market.
That market is currently dominated by smaller, private financial institutions, such as peer-to-peer or P2P lending platforms and consumer finance platforms.
In China, only 30 percent of citizens are covered by existing credit reporting system, while in mature markets the percentage could be 70 percent or higher.
By the end of July, the five biggest banks in China-Industrial & Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of Communications and Bank of China－had launched inclusive finance arms, just two months after the authorities concerned called for better financial services for a wider group of people across China.
FinMason Announces International Expansion: Opens Operations in Prague (Crowdfund Insider), Rated: AAA
Boston-based fintech and investment analytics firm, FinMason, announced its international expansion plans and the opening of a new operations center based in Prague. The company stated the initial expansion will include the hiring of twenty software engineers to keep pace with the rapid growth and development needs of the company.
The company shared that FinMason Europe, s.r.o., opened August 1st and the first employees have already started.
Vendorly Adds Three New Companies to Vendor Oversight Platform (Markets Insider), Rated: AAA
Vendorly, an innovative vendor oversight platform for financial institutions, today announced the continued expansion of its platform through the addition of three new third-party oversight integrations available on the Vendorly™ platform. These additions further enable our customers to enhance their compliance management framework and help them maintain the high oversight standards required in today’s marketplace.
Continuing this momentum, the new vendor oversight additions to the Vendorly platform include:
- Dun & Bradstreet (NYSE: DNB)— Vendorly customers now have access to Dun & Bradstreet data to help make smarter decisions about their current and prospective vendor network.
- The ID Co. — With DirectID, Vendorly customers now have the ability to conduct bank verification for current and prospective vendors in their network, to reduce fraud and misrepresentation prior to payment.
- TINCheck — Vendorly customers now have the ability to validate the tax ID of all organizations in their current and prospective vendor network.
iFunded Tackles Large Project With Bond Issue (Crowdfund Insider), Rated: A
A new entrant in German online real estate lending, iFunded wants to address the market of larger property development projects that lie beyond the scope of real estate crowdfunding. Partnering with umbrella investment bank NFS Netfonds Financial Service, the platform is launching its first €10 million real estate bond issue, to be listed on the open market of the Frankfurt Stock Exchange. With this, iFunded leads, for the real estate online funding segment, the Fintech startup trend that consists in moving from exemption/sandbox status to a fully regulated financial environment.
According to Crowdfunding.de, in the first half of 2017, German online real estate crowdlending platforms raised €58 million, 45% more than in the entire year of 2016.
In July 2017, iFunded launched its first public bond offering, what motivated you as a company to add the classical fundraising channel to your online real estate platform?
Real estate crowdfunding in Germany has grown very significantly recently and will reach between €100 and €120 million by the end of 2017. However, it still is small.
Our first project Eisenzahnstrasse Berlin is a €10 million bond issue (ISIN: DE000A2E4FQ5) with a 3.5-year maturity and 5.5% interest rate. It is destined to transform an exi property into 281 flats, including a penthouse, and 2,400 sqm commercial space. The total estimated budget is €49.6 million and the expected income €67 million.
Robo-adviser Moneyfarm expects profitability by 2019 (Citywire), Rated: A
European robo-adviser Moneyfarm expects to become profitable by 2019 as it looks to bring to market new products in the coming months.
The Italian firm filed its 2016 financial statements this morning, announcing expansion to 10,000 customers in the UK and £260 million in global assets under management (AUM), which renders it the second largest robo-adviser in Europe.
The firm has reported total losses of £6.4 million in 2016, but claims this was in line with its agreed targets.
Kildare businesses raise over €1m through Linked Finance (Leinster Leader), Rated: B
Linked Finance, Ireland’s leading peer-to-peer (P2P) lending company has raised over €1m for Kildare-based businesses.
36 Kildare businesses including well-known businesses Kelly’s Mountain Brew, Celbridge Playzone, and The Academy Barber, have used the Linked Finance platform to raise funds and facilitate business growth.
Analog Regulations Built for the Traditional Banking Space are not Conducive to Fostering Innovation in Financial Services (Crowdfund Insider), Rated: AAA
Mueller notes that Singapore and the UK were the early leaders in Fintech innovation as the respective governments determined it was of strategic importance. With government backing, Fintech flourished.
But there are many challenges for this transformation that is occurring at a breakneck speed. And as Mueller says;
“analog regulations built for the traditional banking space are not conducive to fostering innovation in a financial services industry turned digital.”
Mueller bullets out intrinsic challenges to the existing regulatory ecosystem:
- Fear of failure has resulted in some regulators taking a go slow approach instead of being proactive. When things go wrong – who gets the blame?
- Complexity in Fintech requires new skills. Regulatory agencies are typically populated with people entrenched in well defined processes. There is a lack of proper skills and staffing.
- Internal culture may not be willing to adapt. Changing processes is always a challenge. A cohesive policy strategy is missing.
- Fintech innovators may struggle to engage and communicate with a regulator. Fear of engagement harms us all
Yes, some countries are blazing trails in Fintech and the list of countries pursuing a Fintech Hub status is growing. Without acknowledging the elephant in the room that the US is not at the top of this list (even though it is the leading global financial center) is telling about the regulatory morass elected officials have allowed to persist.
Read the full report here.
FinTech and the world of investment banking (Brave New Coin), Rated: A
Global banks and investment banks are far more complex creatures than their high street counterparts, which is why we’ve seen far less disruption in corporate, commercial and wholesale banking that we are seeing in retail, but don’t be complacent or closed here. There are things happening in the more complex areas too.
While fintech covers a diverse array of companies, business models, and technologies, companies generally fall into several key verticals, including:
Lending tech: Lending companies on the list include primarily peer-to-peer lending platforms as well as underwriter and lending platforms using machine learning technologies and algorithms to assess creditworthiness.
Payments/billing tech: Payments and billing tech companies span from solutions to facilitate payments processing to payment card developers to subscription billing software tools.
Personal finance/wealth management: Tech companies that help individuals manage their personal bills, accounts and/or credit, as well as manage their personal assets and investments.
Money transfer/remittance: Money transfer companies include primarily peer-to-peer platforms to transfer money between individuals across countries.
Blockchain/bitcoin: Companies here span key software or technology firms in the distributed ledger space, ranging from bitcoin wallets to security providers to sidechains.
Institutional/capital markets tech: Companies either providing tools to financial institutions such as banks, hedge funds, mutual funds, or other institutional investors. These range from alternative trading systems to financial modelling and analysis software.
Equity crowdfunding: Platforms that allow a collection of individuals to provide monetary contributions for projects or companies provisioned in the form of equity.
Insurance tech: Companies creating new underwriting, claims, distribution and brokerage platforms, enhanced customer experience offerings, and software-as-a-service to help insurers deal with legacy IT issues
Meantime, rather than ignoring these changes, the biggest banks are investing in them. Since 2012, the ten largest US banks by assets participated in 72 rounds of investment totalling $3.6 billion in 56 FinTech companies whilst, in Europe, Banco Santander leads with the most number of unique investments to FinTech startups. The firm has made 13 investments to 12 unique fintech startups. The largest investment was a $135 million in Q3 2015 to small business lender Kabbage, that also included participation from ING among other investors.
Alt-Lending Enjoys Sudden Investment Revival (PYMNTS), Rated: A
This week alone saw two examples of those concerns in action: One U.S. lawmaker, Rep. Emanuel Cleaver II (D-Mo.) sent a letter to five alternative small business lenders operating in the country, inquiring about their business practices.
This week also saw one alternative lender in the U.K., DueCourse, fall into administration.
All of this makes it even more surprising that alternative lending startups, by far, secured the greatest amount of investment this week – pushing half a billion dollars, in fact.
PYMNTS breaks down the major AltFin investment rounds, plus covers the other B2B FinTechs that were able to secure new funding.
PledgeMe closes in on profitability in 2017, weighs up new product development (NZ Herald), Rated: AAA
PledgeMe came within cooee of turning a profit in the 2017 financial year, boosting revenue from fees to use its equity crowdfunding and peer-to-peer lending platform while also clamping down on costs, and is considering adding another string to its bow which that could need another capital injection.
The Wellington-based company narrowed its annual loss to $11,228 in the 12 months ended March 31 from $398,611 a year earlier as revenue climbed 55 per cent to $268,473 and operating costs were slashed 48 per cent to $288,502.
Fintech Australia Shares 2017 Australian Fintech Update (Infographic) (Crowdfund Insider), Rated: AAA
On Saturday, Fintech Australia released a new infographic that revealed more details about the Australian fintech industry’s successes so far this year.
Non-bank loans gain momentum in tough lending regime (The Sydney Morning Herald), Rated: A
We have seen demand for construction loans between $10 million and $30 million spike 20 per cent per cent over the last six months as Tier 1 banks are quickly tightening both pre-sales thresholds and loan-to-valuation ratios on new developments.
One area of the greatest demand for non-bank finance is coming from Chinese property developers, who do not have the track record or Australian assets to provide comfort to the major lenders.
Peer-to-peer lending models, like that of Chifley Securities, allow us to access investor funds to progress these developments, as we are applying different, more nuanced assessment of the risks associated with these loans.
Will property crowdfunding take off in Australia? (Your Investment Property), Rated: A
A new study conducted by the University of South Australia (UniSA) in partnership with DomaCom, suggests that crowdfunding could become a viable new vehicle for investors trying to make headway into the country’s increasingly challenging property market.
Braam Lowies, the study’s lead researcher, noted that while the concept was relatively new in Australia, it had been successful in the United States and United Kingdom for approximately seven years.
Wadhawan Global takes second UK bet, invests Rs 175 crore (India Times), Rated: A
Wadhawan Global Capital (WGC), which owns 38% of Dewan Housing FinanceBSE 0.07 %, has invested Rs 175 crore in London-based mortgage financer Neyber, marking it’s second investment through the newly set up UK arm as it seeks to expand its global footprint.
Why PPF is like a safety jacket for investors of P2P lending (India Times), Rated: A
Those who do not back the idea of PPF believe investors should carry the risk of loss as the principal idea of P2P Lending is to offer investors an “alternative investment route”. The P2P Lending platform, at best, can try to strengthen the risk-assessment processes by making the optimal use of technological innovations.
While the other camp which is in favour of PPF opines that it is not a luxury but a necessity at the moment as it will only instill confidence among the investors. And, it’s not about disbelieving one’s capabilities.
Consultation by MAS on the provision of robo-advisory services in Singapore (Lexology), Rated: AAA
A summary of the proposals put forward by MAS in the Consultation Paper is set out below.
- Expansion of licensing exemptions
(a) Expansion of licensing exemption for dealings in securities other than CIS
(b) Expansion of licensing exemption for provision of fund management services incidental to advisory activities
- Dispensation with prior client approval for each and every rebalancing transaction
- Case-by-case exemption from collecting full information on the financial circumstances of clients
- Relaxation of criteria for CMS licences in fund management for digital advisers
- Development, monitoring and testing of client-facing tools
- Provision of information on algorithms and conflicts of interest
- Responsibility of the board and senior management
MAS Establishes Payments Council (LATTICE80 Email), Rated: A
The Monetary Authority of Singapore (MAS) announced on 2 August that it will establish a Payments Council, comprising 20 leaders from banks, payment service providers, businesses,and trade associations. Members are appointed for a two-year term and chaired by Mr Ravi Menon, Managing Director, MAS. The Payment Council marks the vision of an e-payments society, fostering collaboration between providers and users of payment services in Singapore.
Green Packet an emerging fintech play (The Star), Rated: A
Communication and technology services company Green Packet Bhd is eyeing an expansion into a new growth area – the mobile payment solutions segment, an area poised for disruptions through technology.
According to the 2016 Visa Consumer Payment Attitudes survey, 74% of Malaysians prefer to make electronic payments instead of cash, an increase of 8% compared with 2015. In fact, Visa indicated in a separate study that seven in ten Malaysians are willing to use mobile wallets.
Hyperintelligent banking in the fickle era of social media (Inquirer.net), Rated: A
Such is the case of American banking giant Citi, which sees itself as a technology company with a banking license, having introduced video banking recently in India.
Video banking is seen suitable especially in wealth management, which is part of the regional consumer business led by Selva. This is a segment where customers need trust and constant advice.
Citi receives 70 million calls a year, almost half of which are answered by a phone agent. The bank usually spends about 30 to 45 seconds validating the call, asking the client his or her mother’s maiden name, date of birth and details about the last transaction.
In the Philippines, Citi now implements voice-enabled biometrics for easier client verification. Citi is likewise moving toward facial recognition.
Fintech Buys Stake in Exchange (finews), Rated: B
GSX, which owns and operates the Gibraltar Stock Exchange, said on Friday that Cyberhub Fintech Holdings Limited is a new strategic shareholder. Cyberhub is a unit of Broctagon, a derivatives trading technology provider.
The stock exchange also wants to become the world’s first to fully integrate blockchain technology.
The role of financial advisers in raising national savings levels (Biz Community), Rated: A
According to the 2017 Old Mutual Savings & Investment Monitor, working South Africans allocate only 15% of their incometowards savings.
Naidoo explained that these statistics emphasise the extent of the national savings deficit and the large gap that exists between targeted economic growth of 5.4% per year, as per the NDP, and the ability of the South African economy to fund that growth.
Naidoo believes that financial services providers and advisers have a vital responsibility to promote a savings culture via collaborative advice and financial literacy efforts.
Carilend seeing ‘phenomenal’ growth (Loop News Barbados), Rated: AAA
Just three months in and Barbados’ sole peer-to-peer lending company, Carilend, is seeing tremendous success with 100 percent of its loans.
With over 900 registered users on the site to date, the team at Carilend has been amazed at the response they have received.
Carilend reported their “average” Borrower is borrowing $8,617 for 43 months at an average interest rate of 11.34%. Whilst all applications receive an answer in one working day, Carilend recently approved a brand new Borrower in 2 hours; 22 minutes from receipt of their initial application.