- Today’s main news: LendingClub completes 2nd self-sponsored loan securitization with $323M deal. Funding Circle restates IPO ambitions. Robo.cash tops 2M Euro, 1000th investor. AutoGravity surpasses $1B USD in finance amount requested. Singapore banks closing cryptocurrency, payments accounts.
- Today’s main analysis: Risk evaluation of commercial PACE securitizations differs from residential deals. Goldman Sachs’ aggressive push into consumer banking.
- Today’s thought-provoking articles: Orchard updates Lendscape graphic. Top sources of small business financing based on approval rates. Funding Circle’s winning strategy. More Chinese fintech firms to seek Hong Kong IPO. Why ZhongAn is successful. Is this the end of fintech?
- LendingClub completes 2nd self-sponsored loan securitization.
- Orchard updates Lendscape graphic. AT: We can see a growing number of institutional investors and originating banks, not to mention a push into new areas of lending with expanding categories of originators.”
- Risk evaluation of commercial PACE securitizations differs from residential deals.
- Top sources of small business financing based on approval rates. AT: “It looks like the year goes to institutional investors and big banks. Credit unions and alternative lenders are in decline. I guess this means you can innovate all you want, money still talks.”
- AutoGravity surpasses $1B USD in finance amount requested. AT: “AutoGravity, by far, is doing the most interesting thing in the area of auto finance. This is a huge milestone. Congratulations, with the expectation to see more great achievements from this young startup.”
- ID-verification firms capitalize on Equifax’s failure. AT: “This is a natural consequence, and I expect to see more alternative ID verification products hit the market in the coming year. Companies that take their time and do it right have a greater chance at success, long-term.”
- OCC Fintech Charter undermines our authority, says NY Department of Financial Services. AT: “The struggle for control over regulation between the states and the federal government continues to heat up. Of course, states have no authority not granted by the Constitution, and that authority is subservient to the federal government in most cases. I suspect the federal government will win this battle, though it will take a few years.”
- Stockpile raises $30M.
- Chime raises $18M for no-fee mobile banking.
- Shinola uses Affirm’s installment plan.
- Is marketplace lending maturing?
- Fintechs march to their own drum.
- McHenry, Booker introduce bill to automate income verification.
- Plug and Play selects winter 2017 batches.
- Wunder makes Rich Mauro director of capital markets.
- Funding Circle CEO restates IPO ambitions.
- Funding Circle is onto winning strategy.
- Funding Circle post year-end highlights.
- Ranger Direct Lending fund expecting nearly 50% dividend cut.
- LendInvest wins most valuable tech company award.
- Onfido raises $30M for regtech startup.
- Wonga records 65M GBP loss. AT: “This is less than the loss in the previous year.”
- How fintech is disrupting traditional banking models.
- Finance Innovation Lab appoints new trustees.
- How and where to get crowdlending funds for your business.
- More Chinese fintech firms expected to pursue Hong Kong IPO. AT: “No doubt. If it worked for one company, it could work for another. Cattle follow the lead bull.”
- Why ZhongAn Insurance is successful.
- KKR invests in Shenzhen Suishou Technology.
- Robo.Cash tops 2M Euro with 1000th investor. AT: “Congratulations.”
- The end of fintech is nigh, says Twino founder/CEO.
- Goldman Sachs’ entry into consumer banking is aggressive.
- Goldmoney adds bitcoin, ethereum.
- High net worth individuals would use Amazon for wealth management. AT: “I find this quite interesting. Around the globe, HNWs would use Google, Apple, Facebook, and Amazon (GAFA) for wealth management. This sounds like an invitation for the Big 4 to intro their own robo-advisors. Who knows? It could happen.”
- Study Loans targets students of vocational training.
- Monefly launches free money management platform with Envestnet/Yodlee financial data.
- United States
- LendingClub Completes 2nd Self Sponsored Loan Securitization with $ 323 Million Deal (Crowdfund Insider), Rated: AAA
- Orchard’s Online Lending Ecosystem Update: “Lendscape” (Crowdfund Insider), Rated: AAA
- Risk Evaluation of Commercial PACE Securitizations Differs From Residential Deals (Morningstar), Rated: AAA
- The Top Sources Of Small Business Financing Based On Approval Rates (Forbes), Rated: AAA
- AutoGravity Surpasses $ 1 Billion USD In Finance Amount Requested, Launches Real-Time Dealership Inventory Nationwide (PR Newswire), Rated: AAA
- ID-verification firms seize on Equifax moment (American Banker), Rated: A
- DFS to Court: OCC Fintech Charter ‘Undermines’ Its Authority (New York Law Journal), Rated: A
- Stockpile Raises $ 30 Million to Make Stock Investing Easy for Everyone (PR Newswire), Rated: A
- Chime raises $ 18 million for mobile banking without the fees (TechCrunch), Rated: A
- Shinola’s new pitch: the installment plan (Crain’s Detroit Business), Rated: A
- Is marketplace lending maturing? (Banking Exchange), Rated: A
- ‘Fintechs tend to march to their own rules’: former SEC chair Levitt (American Banker), Rated: A
- McHenry and Booker Introduce Fintech Bill to Automate Income Verification (House.gov), Rated: B
- Plug and Play Selects Their Winter 2017 Batches (PR Newswire), Rated: B
- Wunder Brings on Rich Mauro as Director of Capital Markets (Wunder Capital), Rated: B
- United Kingdom
- Funding Circle hits £50 million in revenue as CEO restates IPO ambitions (Business Insider), Rated: AAA
- Funding Circle is onto a winning strategy (Business Insider), Rated: AAA
- Funding Circle posts 59% revenue rise (Bridging&Commercial), Rated: A
- Ranger Direct Lending fund expecting substantial dividend cut (AltFi), Rated: A
- ‘Oscars of the start-up world’ has an exciting new winner looking to disrupt property finance (CNBC), Rated: A
- These 20-something Oxford grads just raised $ 30 million for their fintech startup (Business Insider), Rated: A
- Payday lender Wonga records £65m loss amid overhaul (BBC), Rated: A
- How Fintech Is Disrupting Traditional Banking Models (Minute Hack), Rated: A
- New trustees join Finance Innovation Lab’s board (P2P Finance News), Rated: B
- How and where to get Crowdlending to fund your Business (TechBullion), Rated: B
- More Chinese fintech firms to eye Hong Kong IPOs, says JP Morgan (SCMP), Rated: AAA
- ZhongAn Insurance Starts Trading on the Hong Kong Stock Exchange (Lend Academy), Rated: AAA
- KKR Invests in Shenzhen Suishou Technology (BusinessWire), Rated: A
- European Union
- Robo.Cash Tops €2 million with 1000th Investor (Crowdfund Insider), Rated: AAA
- The End of Fintech Is Nigh (FiNews), Rated: AAA
- Goldman Sachs’ foray into consumer banking is getting aggressive (Tearsheet), Rated: AAA
- Goldmoney Inc. Adds Bitcoin and Ethereum to the Goldmoney Holding (Globe Newswire), Rated: A
- HNWs Would Use Amazon for Wealth Management (Financial Advisor IQ), Rated: A
- New fintech “Study Loans” aims to help cash-strapped students (Mozo), Rated: AAA
- MONEFLY LAUNCHES FREE FINTECH PLATFORM WITH ENVESTNET | YODLEE FINANCIAL DATA (Yodlee), Rated: A
- MyAdvo Ties Up with Online Loan Advisor Square Capital for Loan Services (newKerala), Rated: AAA
- Indians are warming up to robo-advisers (livemint), Rated: A
- Singapore Cryptocurrency Firms Facing Bank Account Closures (Bloomberg), Rated: AAA
- How technology drives a new Taiwanese banking landscape (The Asset), Rated: A
LendingClub Completes 2nd Self Sponsored Loan Securitization with $ 323 Million Deal (Crowdfund Insider), Rated: AAA
LendingClub (NYSE: LC) has sponsored and contributed to its second securitization deal following the the last successful self sponsored deal this past June. The “Consumer Loan Underlying Bond” (CLUB) Credit Trust 2017-P1 (CLUB 2017-P1) issued $323.1 million in prime notes backed by consumer loan assets originated via the LendingClub platform. This is the sixth securitization supported or sponsored by LendingClub, and the fourth rated securitization of LendingClub facilitated loans overall. LendingClub described the deal as further expanding investor access.
LendingClub reported the transaction was backed by approximately $350 million of collateral and includes $217.3 million of Class A notes rated “A-(sf)”, $51.0 million of Class B notes rated “BBB (sf)” and $54.7 million of Class C notes rated “BB (sf)”.
Orchard’s Online Lending Ecosystem Update: “Lendscape” (Crowdfund Insider), Rated: AAA
Orchard Platform, the nexus of loan originators and institutional investing, has updated their ongoing graphical view of the online lending world or “Lendscape”. As the online lending universe has moved from peer to peer lending, to marketplace lending to all forms of online lending, the Lendscape has changed and grown. New lending platforms have been launched, new verticals targeted, and a growing number of ancillary services have joined the space. Orchard points to the addition of lenders like LendingPoint, Liberty Lending, Lendmart, Allegro Credit, UpLift, ArtMoney, Ascend, OppLoans, and Lendistry.
Perhaps the most important shift in online lending is the growing participation by traditional finance firms.
Risk Evaluation of Commercial PACE Securitizations Differs From Residential Deals (Morningstar), Rated: AAA
Morningstar Credit Ratings, LLC believes the next iteration of property assessed clean energy securitizations will be in the commercial sector. While securitization of residential PACE assessments tops $3 billion, there have been no public transactions consisting primarily of commercial liens.
Evaluating Property Income Generated to Pay Debts In analyzing the credit risk of transactions backed by commercial assessments, Morningstar considers the debt service coverage ratio, because PACE lending is tied to the property rather than the owner’s creditworthiness.
Evaluating Property Income Generated to Pay Debts
Morningstar evaluates a property’s net operating income in relation to its annual debt-service payments. Among securitized commercial mortgages, the average DSCR is approximately 2.14x, according to Morningstar. C-PACE lenders and aggregators typically require a minimum total DSCR in the 1.00x to 1.15x range. Although, in some cases, the DSCR has dipped below 1.00x, especially if total debtto-value is low when operating expenses are higher than revenue. Factors possibly mitigating a lower DSCR, which include county support, property ownership affiliations within a network, liquidity account and equity position require case-by-case analysis. In addition, DSCR of the lien is more important than the DSCR of the overall debt.
Evaluating Divergent Leverage Metrics
The lien-to-value ratio is another leverage metric that Morningstar analyzes. Although a PACE assessment raises a property’s lien-to-value ratio, the increased risk to the underlying mortgage is likely minimal, as the obligation is usually small in comparison to the mortgage.
It can be more challenging to calculate the lien-to-value ratio for C-PACE levies, because the properties can run the gamut from hotels, farmlands, nursing homes, and gas stations to nonprofit buildings such as churches. Across residential PACE deals, we have seen lien-to-value ratios around 6.7% and combined PACE-lien-plus-mortgage-tovalue ratios at around 62.7%. In C-PACE, lien-to-value ratios hover around 25.0%, not including mortgage debt.
While we scrutinize total debt-to-value, the distribution of leverage offers insight into the financial health of the property. For example, we view a property with a 90% debt-to-value ratio that is composed of an 89% mortgage loan and a 1% PACE assessment more favorably than a property whose debt is composed of an 89% PACE obligation and a 1% mortgage because of higher subordination levels.
Growing Market Size
C-PACE financing has grown to about $482 million as of Sept. 1, encompassing 1,097 commercial projects, according to PACENation. More than 2,500 municipalities have C-PACE programs.
Compared with residential programs, C-PACE is in its infancy, as R-PACE financing totaled about $3.67 billion and R-PACE securitizations totaled around $3.40 billion. A sliver of
commercial assets was included in one of those securitizations, GoodGreen 2016-1, with commercial PACE levies representing approximately 4.8% of the pool’s assets.
Get the full report here.
The Top Sources Of Small Business Financing Based On Approval Rates (Forbes), Rated: AAA
According to the latest Biz2Credit Small Business Lending Index™, the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Loan approval percentages of institutional investors have continuously reached new heights this year in terms of approval rates. In August Institutional lenders’ loan approval rates in August reached 63.9%.
Alternative lenders’ approval percentages continue to decline; in August the rate dipped to 57.1%. Approval percentages have dropped every month for more than a year.
Approval percentages at small banks rose one-tenth of a percent in August to 49.0% from July’s 48.9% figure. It is conceivable that the number may cross the 50% benchmark.
Big banks improved one-tenth of a percent to 24.6% in August, setting a new high for the Biz2Credit Index, which has tracked loan approvals since January 2011. The number is creeping up to one-in-four. It’s a good time for bank lending.
Loan approval rates at credit unions dipped to 40.3% in August, falling to a new low for this category of lenders on Biz2Credit’s index.
AutoGravity Surpasses $ 1 Billion USD In Finance Amount Requested, Launches Real-Time Dealership Inventory Nationwide (PR Newswire), Rated: AAA
AutoGravity, a FinTech pioneer on a mission to transform car shopping and financing, today announced that it has reached $1 billion USD in finance amount requested on the AutoGravity platform. Additionally, AutoGravity has announced the launch of real-time inventory for new and used cars from partner dealership groups across the nation. Car shoppers can browse real vehicle inventory on dealership lots, find the specific car that’s right for them and secure up to four finance offers in minutes on the AutoGravity smartphone app.
More over 750,000 car shoppers have downloaded AutoGravity, collectively requesting over $1 billion USD in financing. These users can now search inventory by car brand and model year – as well as characteristics such as body type, drivetrain and color. Car shoppers can find their desired car waiting for them on the showroom lot for the payment they want. With car selected and offers in hand, users can pick up their car and drive off the lot with the confidence of knowing they have secured a fair deal.
AutoGravity partnered closely with the largest dealer groups in the country to design a seamless process by which dealers can easily load inventory feeds, including vehicle details and pictures, to AutoGravity’s secure platform. Inventory is updated and shown to users in real time.
ID-verification firms seize on Equifax moment (American Banker), Rated: A
The Equifax hack, combined with the rise of online lending, may have turned 2017 into a golden age for companies with new ideas for ID.
The software company Mitek plans to roll out a product in the coming year called Mobile Verify for Lending, which offers lenders a five-step process to quickly verify customer identities. Borrowers first share their online bank account information with lenders. They then submit four pictures taken from their smartphones: the front and back of their driver’s licenses, a selfie and a pay stub.
Other players are offering digital lending solutions to make it easier for banks to keep pace with speedy fintech competitors. Upstart, for example, is marketing software, called Powered by Upstart, to banks wanting to get into digital lending.
DFS to Court: OCC Fintech Charter ‘Undermines’ Its Authority (New York Law Journal), Rated: A
The U.S. Office of the Comptroller of the Currency’s plan to offer a special-purpose bank charter for financial technology companies “undermines” the Department of Financial Services’ regulatory authority in New York, the state agency argued in court documents.
“The Fintech Charter Decision is an unlawful assertion of power that usurps New York consumer protection laws and would preempt plaintiff’s ability to regulate any number of the over 600 nondepository institutions she currently regulates,” wrote Matthew Levine, the executive deputy superintendent for enforcement at the department.
Stockpile Raises $ 30 Million to Make Stock Investing Easy for Everyone (PR Newswire), Rated: A
Stockpile, a brokerage popular with millennials that is pioneering fractional share stock investing, announced today that it has raised $30 million in Series B funding led by Fidelity backed Eight Roads Ventures, with participation by Mayfield, Arbor Ventures, Hanna Ventures, Wang Ventures, and others.
This latest investment brings the total raised by Stockpile to more than $45 million. Mayfield led Stockpile’s $15 millionSeries A in October 2015, with participation by Arbor Ventures, Stanford University, and actor Ashton Kutcher. Stockpile will use the new funds to bring stock investing to more millennial customers and expand its unique features, Lele said.
Chime raises $ 18 million for mobile banking without the fees (TechCrunch), Rated: A
Chime is raising $18 million in Series B financing for its mobile-first approach to banking. Cathay Innovation led the round with participation from Northwestern Mutual Future Ventures, Crosslink Capital, Forerunner Ventures, Homebrew and others.
It’s a bank account and debit card built for the digital age.
Without monthly fees or overdraft charges, Chime tries to appeal to the millennial generation, touting its affordability and easy-to-use app. Since launching in 2014, Chime has signed up 500,000 customers, who are typically in their late 20s and making between $50,000 and $70,000 per year.
Shinola’s new pitch: the installment plan (Crain’s Detroit Business), Rated: A
Shinola/Detroit LLC is targeting millennials by adding an option to pay for its watches and other luxury goods in an old-fashioned way: the installment plan.
The average order value for Affirm customers is 70 percent higher than the sitewide average, Kopitz said. And about half of those using the service with Shinola are 18-34 years old, the release said.
Around 1,000 retailers now accept payment through Affirm.
Is marketplace lending maturing? (Banking Exchange), Rated: A
As new as fintech and marketplace lending—once known as “peer to peer lending”—may still seem, Noreika suggested that the online lending fraternity may be moving toward maturity.
Noreika said the sweat that went into those ideas has hit $40 billion in consumer and small business credit, with volumes doubling every year since 2010. He noted that some project that at that rate, marketplace lending will hit $1 trillion by 2025—versus the $3.7 trillion in unsecured consumer lending as of yearend 2016.
Noreika pointed out that marketplace lenders have been seeing cracks in their credit since the fourth quarter of 2015.
‘Fintechs tend to march to their own rules’: former SEC chair Levitt (American Banker), Rated: A
“Hardly a day goes by where there isn’t a recording of some scandal or another,” Levitt said. “I think that’s generally true of emerging cultures and emerging standards and cultures. That makes the odds of winning much less than in well established companies with better established cultures.”
His fellow fintech panelists, Sarah Friar, chief financial officer at Square, and Scott Sanborn, CEO of Lending Club, both pointed out that established companies have had their own share of scandals.
Levitt said it’s difficult for startups to attract the kind of quality board members that larger, more mature companies are able to attract.
“Regulators are always playing catch up,” he said. “Regulation today trails the fintech world and often presents impediments and costs that are unnecessary. Regulators are constantly protecting their space so they don’t get caught up in a scandal they’re held accountable for, so there’s a tendency to over-regulate.”
McHenry and Booker Introduce Fintech Bill to Automate Income Verification (House.gov), Rated: B
Today, Chief Deputy Whip Patrick McHenry (R, NC-10), the Vice Chairman of the House Financial Services Committee, and Senator Cory Booker (D-NJ) introduced the IRS Data Verification Modernization Act of 2017. This bipartisan bill will require the Internal Revenue Service (IRS) to automate the Income Verification Express Services process by creating an Application Programming Interface (API) allowing small businesses and consumers to access accurate credit assessments more efficiently. Joining McHenry as an original cosponsor of H.R. 3860 is Congressman Earl Blumenauer (D, OR-03), a senior member of the House Committee on Ways and Means.
Plug and Play Selects Their Winter 2017 Batches (PR Newswire), Rated: B
Plug and Play formally announces the startups accepted into their Winter 2017 batches. Plug and Play will run five programs this quarter focused on Health & Wellness, Insurtech, Internet of Things, Mobility, and Travel & Hospitality.
Wunder Brings on Rich Mauro as Director of Capital Markets (Wunder Capital), Rated: B
We’re incredibly excited to welcome the newest member of Wunder Capital’s team, Rich Mauro. As Director of Capital Markets, Rich will lead Wunder’s institutional fundraising activities, bolstering our capital stack and helping us scale Wunder’s platform to the next level.
Funding Circle hits £50 million in revenue as CEO restates IPO ambitions (Business Insider), Rated: AAA
Accounts for 2016 filed with Companies House this week show:
- Revenue rose 59% to £50.9 million;
- Operating expenses rose by 43% to £103.1 million;
- Losses dipped by 3% to £35.7 million thanks partly to a foreign exchange boost;
- £1 billion lent last year;
- Loans outstanding rose by 61% to £1.37 billion;
‘It goes without saying that international is really hard’
While Desai is bullish on international expansion, the accounts show Funding Circle stopped operations in Spain at the start of the year, a market it entered through the acquisition of Zencap in 2015.
International revenues grew slower than UK revenues last year and Funding Circle parted ways with the head of its continental Europe operations in the middle of last year.
Funding Circle remains a loss-making business (accumulated losses stand at £116.6 million to date) but Desai says it is on a long-term path to profitability.
Funding Circle is onto a winning strategy (Business Insider), Rated: AAA
Funding Circle, however, has remained a firm market leader, and its annual results for 2016 show it continues to do well.
Its losses narrowed 3% from £37 million ($50 million) in 2015 to £36 million ($48 million) in 2016, as revenue grew 59% year-over-year (YoY) from £32 million ($43 million) to £51 million ($68 million), and originations saw a 61% boost from £846 million ($1.1 billion) to £1.4 billion ($1.9 billion).
Funding Circle posts 59% revenue rise (Bridging&Commercial), Rated: A
Post year-end highlights:
- January 2017 – Funding Circle raised £82m equity capital
- April 2017 – Funding Circles’ SME income fund – which purchases loans through the platform – raised net proceeds of £140m through a C share issue
- August 2017 – Funding Circle and Aegon announced £160m investment in UK small business loans
- August 2017 – Funding Circle launched new brand identity and rolled out a substantial advertising campaign in the UK.
Ranger Direct Lending fund expecting substantial dividend cut (AltFi), Rated: A
The £220m Ranger Direct Lending fund could see its dividend pay-out for the second half of 2017 fall to nearly half of that in the first six months of the year, according to a statement by Ranger.
It is expecting NAV returns in H2 2017 to average 0.4 per cent-0.5 per cent per month (c.5-6 per cent pa), and then recover to 0.6 per cent-0.7 per cent per month (c.7 per cent-9 per cent pa) in 2018, assuming the resolution of Princeton this year.
As a result aggregate dividends of c.25p are expected for H2 2017, compared to 46p in H1.
‘Oscars of the start-up world’ has an exciting new winner looking to disrupt property finance (CNBC), Rated: A
LendInvest, an online marketplace platform for property lending and investing, was named the most valuable tech company at the prestigious Investor Allstars event in London on Wednesday evening.
These 20-something Oxford grads just raised $ 30 million for their fintech startup (Business Insider), Rated: A
A “RegTech” — regulation technology — company founded by three Oxford grads all under 30 has raised $30 million (£22.4 million) from investors including Microsoft’s venture capital arm.
Onfido, an identity verification startup, has raised the “Series C” fundraising from Crane Venture Partners, Microsoft Ventures, and Salesforce Ventures, as well as existing investors. It takes the total raised by the London startup to over $60 million.
Onfido’s latest $30 million funding injection follows a $25 million investment last April. Kassai says the latest funding will go towards technology investment and global expansion.
Payday lender Wonga records £65m loss amid overhaul (BBC), Rated: A
Wonga – Britain’s biggest payday lender – posted pre-tax losses of nearly £65m in 2016, but claims its business has been “transformed”.
The lender, which operates in the UK, South Africa, Poland and Spain, saw its losses shrink from £80m in 2015 to £65m in 2016.
How Fintech Is Disrupting Traditional Banking Models (Minute Hack), Rated: A
One of the biggest changes in the financial sector in the UK has been the introduction of challenger banks.
Crucially, these banks have not been mired by the many recent scandals and still rely on customer deposits to build their balance sheets. That’s why fledgling banks such as Metro Bank, Aldermore, Tesco Bank and United Bank UK and currently dominating the best buy tables.
Retail banking is the area that has seen the biggest change as a result of the FinTech sector, but that’s not to say there hasn’t also been a significant impact in the commercial banking sector.
A perfect example is Barclay’s mobile payments service Pingit, designed to compete with Apple Pay, while other banks have launched new mobile banking businesses away from their legacy businesses in an attempt to compete in a digital age.
Bringing financial services to small businesses
One example is peer-to-peer lending, a sector that has sprung up from nothing ten years ago to lend a total of £2.9bn in 2016. This is now filling the capital void for many growing businesses and lending at lower rates than many firms would be able to access elsewhere.
New trustees join Finance Innovation Lab’s board (P2P Finance News), Rated: B
SIX new trustees have been appointed to the board of the Finance Innovation Lab.
The new trustees include Caroline Ellis, a social and organisational change consultant who is taking on the role of chair of the board, and Kate Ormiston Smith, director of finance and operations at The B Team, who is taking up the post of treasurer.
The other new members of the board are: Hanna McCloskey, founder and chief executive officer of Fearless Futures; Toyin Ogundana – investment manager at CAF Venturesome; Paul Riseborough – chief commercial officer at Metro Bank and Julian Thompson, social innovation and fundraising strategist.
How and where to get Crowdlending to fund your Business (TechBullion), Rated: B
When considering your initial application for funding, crowdlending platforms will review your business plan, financial information and other details about your company. In other words, the platforms will review your company’s financial information as well as your personal information in much the same way as banks will do before offering you a loan. Therefore, it is imperative to ensure that your business plan is engaging, comprehensive and well thought out.
Investors will usually seek to get more information about you and your business from social networks like Facebook, Twitterand LinkedIn. It will serve you well to ensure that you have an online presence before you seek for funds through crowdlending.
Going by the FundingKnightresearch, most UK investors have a love for the community and would want to give back to some UK SME to ensure its prosperity.
More Chinese fintech firms to eye Hong Kong IPOs, says JP Morgan (SCMP), Rated: AAA
More Chinese fintech firms vying to go public could choose Hong Kong as their listing venue, after the city’s first fintech IPO received a hot response from investors, and that Hong Kong has unique advantages compared with other global financial hubs, said JP Morgan’s head of global investment banking in China.
Zhong An Online Property and Casualty Insurance, China’s first online-only insurer, closed nine per cent up from its IPO price on Thursday in its Hong Kong debut. With an oversubscription of nearly 400 times from retail investors, the company had priced its IPO at the top end of the expected range, raising US$1.5 billion in the city’s biggest ever fintech offering.
“The next Zhong An could show up in online payment, P2P lending, [financial] product distribution, or online insurance.”
In particular, revenue from online payment is estimated to increase to 202 billion yuan by 2020. Revenue from online distribution of financial products could grow to 52 billion yuan by then, while that for online lending and online insurance may reach 142 billion yuan and 60 billion yuan respectively.
ZhongAn Insurance Starts Trading on the Hong Kong Stock Exchange (Lend Academy), Rated: AAA
ZhongAn’s IPO will likely make the company the 4th most valuable fintech company in the world with a market cap of about US$10.4 billion, following the top three fintechs, which are Paypal ($78bn), Ant Financial ($68bn) and Lufax ($18bn).
Peter Renton interviewed the CEO of ZhongAn Insurance, Jeffrey Chen, on the Lend Academy Podcast over the summer. Jeffrey said in the interview that ZhongAn has 492 million insurance customers as of December 31, 2016. That is more than four times that of insurance giant AXA’s customer base (107 million, as of December 31, 2016). By this measure, ZhongAn truly is the world’s largest insurance company. And this is just a four-year old company!
Why ZhongAn is So Succesful
For the technology part, ZhongAn has been using artificial intelligence and big data analytics in each step of the insurance value chain, from marketing, underwriting, pricing to claims processing.
Another example is that ZhongAn has partnered with a Chinese automaker to develop internet of things (IoTs) and telematics solutions. Telematics devices can capture drivers’ behavioral data, which can be fed to algorithms using big data techniques to tailor product pricing to observed risk levels.
In ZhongAn’s early days, the revenue generated by shipping return policies accounted for almost 90% of the total revenue. This product would not have been such a success were it not for its partnership with Alibaba. Ant Financial, the financial affiliate of Alibaba, is also the single biggest shareholder (16.04%) of ZhongAn.
KKR Invests in Shenzhen Suishou Technology (BusinessWire), Rated: A
Shenzhen Suishou Technology Co. (“Suishou” or the “Company”), a leading personal finance management platform in China, and global investment firm KKR today announced the signing of a definitive agreement under which KKR will invest in Suishou’s Series C funding round to support the Company’s expansion across China.
Robo.Cash Tops €2 million with 1000th Investor (Crowdfund Insider), Rated: AAA
Emerging peer to peer lender Robo.Cashhas topped €2 million in loans with the advent of the 1000th investor. According to Robo.Cash, investors are spread across most of Europe with lenders now coming from 28 different countries. The short term loans are coming from Spain and Kazakhstan.
The total sum of earned interests has amounted to more than €50,000 since the start of the platform’s work.
The End of Fintech Is Nigh (FiNews), Rated: AAA
Switzerland is one of the major global fintech centers and the industry is booming: Swisscom counted fewer than a hundred fintech startups in 2015, today there are 208 companies active in wealth management, comparative consulting, crypto finance, data management, payment services and lending (see illustration below).
Blurred Dividing Line
And this may also spell the end of fintech as we know it, in Switzerland, and abroad. That’s at least what Armands Broks (pictured below) believes. The founder and CEO of Twino, a peer-to-peer lending platform, thinks that the fine line between finance industry and fintech is about to be blurred and that fintech eventually will disappear.
The only way forward for fintech is through cooperation agreements and in doing so, «the fintech industry is signing its own death sentence,» Broks said.
PWC consultants said that about 60 percent of Swiss banks have links to fintechs. Four out of five banks are eyeing partnerships in the near future or are planning to expand existing ones.
Goldman Sachs’ foray into consumer banking is getting aggressive (Tearsheet), Rated: AAA
The same year it launched GS Bank, it began building a digital-only consumer loan product, Marcus, that was fully developed and on the market 12 months later. Without having the legacy infrastructure under previously existing consumer products and services, the overhaul other major banks have been experiencing don’t exist for Goldman.
“[The] platform approach has not been an obvious approach on Wall Street. Our competitors are generally structured in deep vertical silos and we have a different architecture: these shallower silos built on top of many layers of software, tech infrastructure, cybersecurity, enterprise platforms and increasingly, client platforms,” Marty Chavez, an engineer and Goldman Sachs CIO-turned-CFO this year, said in a keynote at Harvard University earlier this year.
46 percent of Goldman jobs are in technology
CB Insights analyzed more than 2,000 open Goldman Sachs job listings by division and business unit to confirm it’s focused on building its technology and digital finance units.
Many of the jobs are in digital finance. Earlier this month it reportedly poached 20 employees from New York-based online lending startup Bond Street — engineers, product developers, and risk and marketing specialists — presumably to build out a lending product.
According to the research, published Tuesday, 46 percent of all of the firm’s jobs as of Sept. 14 are in technology, with the highest amount for core platform roles, followed by operations engineering and then equities technology.
Marcus is expanding in the U.K.
Marcus, the online lending startup built inside the investment bank, has been growing tremendously in the eight months since it launched in October 2016. It has one product: a customizable personal loan for Prime borrowers, with at least a 660 credit score, of up to $30,000. It promises no fees and straightforward repayment terms. It recently passed $1 billion in loan originations with expectations to originate $2 billion by the end of this year. By comparison: SoFi, which launched in 2011, reached its first billion after 14 months; Avant, founded in 2012, took 28 months; 10-year-old Lending Club took 65 months; and Prosper, launched in 2006, passed $1 billion in 98 months.
Goldmoney Inc. Adds Bitcoin and Ethereum to the Goldmoney Holding (Globe Newswire), Rated: A
Goldmoney Inc. (TSX:XAU) (“Goldmoney”) (the “Company”), a precious metal financial service and technology company, today unveiled the addition of vaulted Bitcoin and Ethereum as secure and fully-reserved offline investable assets within the Goldmoney® Holding, a major enhancement that allows qualified clients to buy, sell, and exchange cryptocurrencies with nine global currencies as well as gold, silver, platinum and palladium bullion. With today’s launch, Goldmoney becomes the world’s first publicly traded and regulated financial service to offer insurable, auditable, and Anti-Money Laundering (“AML”) compliant exposure to cryptocurrencies.
- Buying and selling of digital assets that are safely secured in vaulted cold storage. Cryptocurrency offerings currently include Bitcoin and Ethereum; additional leading digital assets will be added over time.
- Funding of Goldmoney Holdings with 50 types of cryptocurrency, enabling wallet holders to sell a variety of cryptocurrencies and fund their Goldmoney Holding with fiat currency to access precious metals and other Goldmoney service offerings.
- Will seek the establishment of peer-to-peer (“P2P”) lending capabilities on digital assets in partnership with Lend and Borrow Trust, allowing owners of Bitcoin and other assets to safely borrow against their positions.
HNWs Would Use Amazon for Wealth Management (Financial Advisor IQ), Rated: A
If one of the four tech giants were to enter the advice space, 56.2% of wealthy individuals would entrust them with their money, according to a Capgemini survey of 2,500 individuals with a net worth of $1 million or more in North America, Latin America, Europe and Asia-Pacific cited by the news service. And among people under 40, more than 81% would use one of the four tech firms, according to the survey.
New fintech “Study Loans” aims to help cash-strapped students (Mozo), Rated: AAA
It’s called Study Loans and is said to be the first online platform dedicated to providing loans to students for both vocational and higher education.
Working closely with education providers, the fintech will track student performance and provide funds as you study through ‘tranches’ – which are based on the number of units you do and when they are completed.
Think of tranches as a ‘pay as you go’ kind of deal. So whether you pass one unit or four, Study Loans will release the funds according to your course progression.
Study Loans has raised $5 million debt equity so far, which is ready to be distributed as the first tranche to Aussie students who have already applied through the platform.
Financing options for students:
- Student loans – Student personal loans are designed to help fund your education. They often have a more lenient application criteria and have lower interest rates than standard personal loans. But you are expected to make monthly repayments – so you’ll need to make sure your budget can handle the amount.
- Peer-to-peer lending
- HECS-HELP – This is a Government funded scheme for students enrolled in Commonwealth supported institutions with no real interest charged on the loan. You won’t have to pay your student fees upfront, however, you are expected to make repayments once you start earning a salary of $54,869.
Monefly is an innovative new Fintech platform in Australia, focused on providing tools and resources that empower its members to grow income, reduce expenses, build assets, eliminate debt and protect themselves from risk. Some of these exciting tools include free property valuations, automated budgeting, credit scores, bank account consolidation and much more.
Monefly has partnered with Envestnet | Yodlee to help its members access comprehensive financial data available across banking and wealth management from over 15,500 data sources globally.
The data being integrated into Monefly includes superannuation, cash, credit cards, personal debts, mortgages, assets, shares, real estate, credit scores and other investment data.
MyAdvo Ties Up with Online Loan Advisor Square Capital for Loan Services (newKerala), Rated: AAA
MyAdvo, India’s leading Legal Tech Startup has entered into an agreement with Square Capital, the digital lending arm of India’s largest real estate transaction platform Square Yards to enable loan facilitation for lawyers on its panel.
Square Capital currently facilitates USD 30- 40Mn(INR 200cr – INR 260cr) of loan disbursals every month, contributed majorly by secured mortgages spread across 50+ banking partners for their different products in home loan, loan against property and business loan.
This exclusive tie-up will benefit MyAdvo registered lawyers in receiving immediate loan solutions without any hassle.
Indians are warming up to robo-advisers (livemint), Rated: A
Robo-advisers, or automated services based on computer algorithms, are catching on in the Indian market due to the relatively lower penetration of financial products in India compared to developed markets.
According to a Business Insider Intelligence forecast, robo-advisers (with some element of automation) will manage investment products worth $1 trillion by 2020, which will go up to $4.6 trillion by as early as 2022.
Scepticism notwithstanding, financial institutions in the country are realising the benefits of robo-advisory services by either building the product in-house or partnering with fintech companies to develop robo-advisers. Take the case of FundsIndia.com, which has a robo-advisory service for which it is forging partnerships with financial biggies. “We have a partnership with Axis Securities and one more company. There is a growing acceptance from the industry, and we are trying to enable better product design,” said Srikant Meenakshi, co-founder, FundsIndia.com. According to him, 15% of his company’s overall portfolio comprises robo-advisory services. Similarly, 5nance has an agreement with HDFC Mutual Fund for its robo-advisor.
Robo-advisory start-up ArthaYantra uses a patented methodology called the Personal Financial Lifecycle Management on its online platform, Arthos. Since its launch in 2008, the site claims to have helped 120,000 customers across more 650 cities and 30 countries.
Singapore Cryptocurrency Firms Facing Bank Account Closures (Bloomberg), Rated: AAA
Singapore banks have closed accounts of several companies which specialize in providing cryptocurrency and payments services, according to two local bodies which represent financial-technology firms.
Chia Hock Lai, president of the Singapore Fintech Association, which has broader membership than Access, said some of his organization’s members also experienced account closures, though he didn’t provide figures.
Access has 106 members and the Fintech Association has 185, though the two organizations said some companies belong to both groups.
How technology drives a new Taiwanese banking landscape (The Asset), Rated: A
According to Joseph Huang, president of E.Sun Bank, speaking in an interview with The Asset, payments is one area that every bank is looking to explore, although it does not generate huge profits for most banks.
Banks are also more frequently working with technology companies. E.Sun Bank partnered with IBM Taiwan in building its digital branch, which opened in February 2017, making it the first digital branch in Taiwan. Similarly, CTBC partnered with LINE Pay to help merge its banking services with communication apps and social media.
Taishin Bank’s e-banking application, Richart, which attracted over 120,000 subscribers, is targeting young Taiwanese users, while Cathay United Bank is also providing its products to retail customers through its platform My MobiBank.