- Today’s main news: SoFi named official sponsor of Big Ten. Equifax supports SME lending with new data sharing solution. UK fintech venture investment rises 150%. Klarna partners with London College of Fashion. Revolut ditches Wirecard, takes card issuances in-house.
- Today’s main analysis: The most wanted for anti-money laundering cases in Asia.
- Today’s thought-provoking articles: Banks close 1,700 branches in 12-month period. Funding Circle SME Income Fund’s moving average. Banks divided on credit card crypto purchases.
- SoFi now the official presenting sponsor of Big Ten. AT: “SoFi has stretched itself to build alliances in traditional ways despite being a groundbreaking leader in an unconventional business model. These types of sponsorships will keep them on top, and it puts their name in front of people who may have never heard of them before. It’s also top-of-mind marketing that serves as a strong branding element for an audience that may be familiar with them.”
- Equifax supports SME lending with new data sharing solution. AT: “This looks like another valuable data source for online SME lenders.”
- Banks drop 1,700 branches in 12-month period. AT: “The period ended June 2017. I’ll be anxious to see how many branches close between then and June 2018. From the looks of things, the back half of 2017 wasn’t any kinder to banks than the front half. It’s no wonder banks are entering a consolidation and re-purposing phase where they look for other ways to use their branch space.”
- An Oklahoma bank gets creative with its bank branch space. AT: “I can see a future where community banks are community meeting places and social hangouts for people who want to discuss financial health. A co-working space is unique and creative, but what other ways can banks attract consumers to sell them financial products once they get there? And keep in mind that those financial products could be products offered by alternative lenders in a day when banks are primarily seen as facilitators rather than originators.”
- Why Digit is dropping chatbots. AT: “Interesting. Digit is one of the companies that pioneered chatbots. Now, banks are beginning to adopt them en masse, which is telling in itself. How long will it be before other fintech and alt lending companies realize what Digit has learned?”
- Lendio opens franchise in Seacoast Region.
- 6th Avenue Capital hires three business development executives.
- US states team up on fintech licensing. AT: “An interesting way to achieve a reciprocity agreement.”
- Wela partners with In-Fi on AI-powered insurance bot.
- How the payday lending industry shapes academic research. AT: “And it appears that academic research is beginning to shape the payday lending industry through new regulatory rules.”
- Aspiration’s values-based marketing.
- From the attic to angel investor.
- LendingTree releases monthly mortgage offer report.
- Cities where it’s good to be a home seller but not a buyer.
- CBC National Bank among 10 highest customer-rated mortgage lenders.
- rateGenius among top 3 in auto customer satisfaction.
- M Financial Group partners with Plug and Play Insurtech.
- 5 passive income ideas that still work.
- LendInvest completes 16M GBP development deal in three weeks.
- A deeper look at Funding Circle SME Income Fund’s moving average.
- UK venture investment more than doubles.
- Banks divide on crypto credit card purchases.
- Lloyds Bank cuts 930 jobs.
- Tandem partners with Personetics.
- Do Isa investors have too much cash invested?
- Differences between short-term and payday loans.
- Folk2Folk appoints chapter development manager.
- Klarna partners with London College of Fashion.
- Penta raises 2M Euro in seed funding.
- P2P investors risk losses lending to just one borrower.
- Acquisition of 85% of Telenor Banka fails to win Serbia’s c-bank approval.
- Revolut ditches Wirecard, takes card issuances in-house.
- Asia most wanted Top 10 AML cases. AT: “This is an interesting list of companies and bad actors on the world stage who are wanted in Asia for anti-money laundering. Includes convictions and sentences. Dig in.”
- Podcast: Open banking role models. AT: “What American banks can learn from European banks about open banking.”
- Google accelerator focuses on emerging markets.
- United States
- SoFi Named Official Presenting Sponsor of the Big Ten Men’s Basketball Tournament (BigTen.org), Rated: AAA
- Equifax launches data sharing solution to support SME lending (AltFi), Rated: AAA
- Banks Shutter 1,700 Branches in Fastest Decline on Record (WSJ), Rated: AAA
- What a scrappy Oklahoma bank can teach the industry about branch strategy (Tearsheet), Rated: A
- Why Digit is over chatbots (American Banker), Rated: A
- Lendio Franchise Announced in Seacoast Region (Lendio Email), Rated: B
- 6th Avenue Capital adds trio to executive ranks (Bankless Times), Rated: B
- US states team up to streamline fintech licensing (Finextra), Rated: A
- Wela Partners with In-Fi to Bring AI-Powered Bot to Insurance Agency Platform Website (GlobeNewswire), Rated: A
- How the payday lending industry shapes academic research (American Banker), Rated: A
- Inside Aspiration’s ‘values-based’ marketing strategy (Tearsheet), Rated: A
- A fruitful journey from the attic to an angel investor (domain-b.com), Rated: A
- LendingTree Releases Monthly Mortgage Offer Report for January (Guru Focus), Rated: A
- The hottest cities where it’s good to be a home seller but not so much a buyer (The Washington Post), Rated: A
- CBC National Bank Among LendingTree’s Top 10 Highest Customer-Rated Mortgage Lenders in Fourth Quarter (PR Newswire), Rated: B
- rateGenius Awarded Top 3 in Auto Customer Satisfaction by LendingTree for 7th Consecutive Quarter (PR Newswire), Rated: B
- M Financial Group Partners with Plug and Play Insurtech to Enhance Client Experience in Life Insurance Space (PR Newswire), Rated: B
- 5 Passive Income Ideas That Still Work In 2018 (SavingAdvice), Rated: B
- United Kingdom
- LendInvest completes £16m development deal in three weeks (Mortgage Introducer), Rated: AAA
- Taking a Deeper Look into the Moving Average For Funding Circle Sme Income Fund Limited (Stock Press Daily), Rated: AAA
- Venture investment in UK fintech more than doubles (Financial Times), Rated: AAA
- Banks divided on cryptocurrencies card purchases (Financial Times), Rated: AAA
- Lloyds Bank cutting 930 jobs (Fintech Futures), Rated: B
- Looking beyond traditional banks (Specialist Banking), Rated: A
- Challenger Bank Tandem Partners with Cognitive Banking Company Personetics (Crowdfund Insider), Rated: A
- Are you holding too much cash in your ISA? (WhatInvestmen), Rated: A
- The Differences Between Short Term Loans and Payday Loans (SWNS.com), Rated: A
- Folk2Folk appoints chapter development manager (Bridging&Commercial), Rated: B
- The key to surviving in China’s P2P marketplace? Understanding regulations (Nikkei Asian Review), Rated: AAA
- European Union
- Klarna partners with London College of Fashion (LeapRate), Rated: AAA
- German digital business bank Penta raises €2.2m in seed funding (AltFi), Rated: A
- P2P investors risk losses by lending to just one borrower (P2P Finance News), Rated: A
- Acquisition of 85% of Telenor Banka fails to win Serbia’s c-bank approval (SeeNews), Rated: A
- Revolut ditches Wirecard for in-house card issuing (Fintech Futures), Rated: AAA
- Asia Most Wanted Top Ten AML Cases (Fintech News), Rated: AAA
- Open banking role models: Fidor, Rabobank and BBVA (American Banker), Rated: A
- Google accelerator focuses on emerging markets (IT Web), Rated: A
- Banks are exploiting loyal customers, warns Productivity Commission (The Guardian), Rated: AAA
- Australia gives regulator sweeping powers over bank bosses’ pay (Reuters), Rated: A
- ADGM is region’s 1st Fintech regulator, says Al Sayegh (WAM.ae), Rated: AAA
SoFi Named Official Presenting Sponsor of the Big Ten Men’s Basketball Tournament (BigTen.org), Rated: AAA
The Big Ten Conference and Big Ten Network announced a multi-year agreement naming SoFi as the presenting sponsor of the Big Ten Men’s Basketball Tournament. SoFi, a modern finance company taking an unprecedented approach to lending and wealth management, will not only be the on-site tournament sponsor, but also present the on-air coverage of all 10 tournament games televised on BTN.
Equifax launches data sharing solution to support SME lending (AltFi), Rated: AAA
Information solutions company Equifax has launched a new solution that provides back up for the government’s Commercial Credit Data Sharing (CCDS) initiative, which is seeking to boost the economy by encouraging new entrants into the SME lending sector.
According to the platform, the new solution “gives lenders a comprehensive picture of a business’ financial health to facilitate faster and more informed lending decisions”.
Equifax was designated as a credit reference agency under the CCDS initiative, giving it access to new data sets from leading business banks, including cash flow activity and debit and credit turnover. The data will be provided to lenders through Equifax Business Insights.
Banks Shutter 1,700 Branches in Fastest Decline on Record (WSJ), Rated: AAA
The number of branches in the U.S. shrank by more than 1,700 in the 12 months ended in June 2017, the biggest decline on record, according to a Wall Street Journal analysis of federal data.
Branch numbers fell again in the second half of 2017, according to related data submitted to bank regulators and reviewed by the Journal. That would add to the thousands of locations closed following the financial crisis, and is the longest stretch of closures since the Great Depression.
Many of the closings were in big cities and surrounding suburbs, where branches were consolidated largely because of falling foot traffic. Others were in rural areas, where some large regional lenders are leaving town altogether.
What a scrappy Oklahoma bank can teach the industry about branch strategy (Tearsheet), Rated: A
Citizens Bank of Edmond is trying to get closer to small business customers by providing space, guidance and almost anything else they might need — besides, of course, a loan.
The one-branch community bank in Edmond, Oklahoma once had another branch, 12,000 square feet located one block away from the main space, with a drive-thru window and some executive offices. But recently the bank decided to consolidate it into a single location and has now turned it into a “business social” co-working environment, called Vault 405, for its small business customers that includes wireless charging stations, conference rooms and a podcast studio.
Ideally, by creating an environment that would bring customer and community relationship returns, as well as grow deposits and loan volume. Citizens currently charges monthly rates between $400 and $1,000 for offices and $175 to $275 for desks and shared spaces. It also offers day passes.
Citizens is also addressing cash pickups for small business customers, one of the most compelling cases for banks thinking of repurposing their branches, using as much readily available technology as possible.
Why Digit is over chatbots (American Banker), Rated: A
Now, Ethan Bloch, founder and CEO of the San Francisco startup, believes his company has been offering the wrong primary user interface. “We think [chatbots] haven’t lived up to their promise,” he said. “So we are done believing they will.”
While the premise of Digit is still the same — use the service to automatically transfer funds from checking to savings every few days in amounts its algorithms believe a person can afford — Bloch believed the chatbot model is terribly flawed in its inefficiency to find out information.
Lendio Franchise Announced in Seacoast Region (Lendio Email), Rated: B
Lendio, the nation’s leading marketplace for small business loans, today announced the opening of a new Lendio franchise in New Hampshire’s Seacoast Region. Through the Lendio franchise program, David Hartnett will help local businesses in the community apply for loans, review their options and secure funding, easing the financial hurdles for small business owners.
Lendio is an online service that helps business owners find the working capital they need to grow their business through the company’s network of over 75 lenders. Funding options include SBA loans, startup loans, equipment loans, commercial real estate loans and more. In the last fiscal year alone, Lendio facilitated more than $300 million in funding.
According to Edelman Intelligence, more than 40 percent of small business owners need additional funding for their business each year. Roughly 70 percent of small business owners aren’t aware that alternative lending sources exists.
6th Avenue Capital adds trio to executive ranks (Bankless Times), Rated: B
6th Avenue Capital, a provider of small business financing solutions, announced the appointment of three senior members to their business development team. Mitchell (Mitch) Levy, Marc Seidel and Gary Lockwood were named to lead the sales teams. The new hires follow last year’s appointments of Christine Chang as CEO and Darren Schulman as COO and a $60 million commitment in capital from a large institutional investor.
US states team up to streamline fintech licensing (Finextra), Rated: A
Currently, firms offering services such as money transfers and cryptocurrency trading have to apply individually to operate in each of the 50 US states.
Under the new compact, if one of Georgia, Illinois, Kansas, Massachusetts, Tennessee, Texas and Washington reviews key elements of licensing – IT, cybersecurity, business plan, background check and Bank Secrecy Act compliance – the other six will accept the findings.
Wela Partners with In-Fi to Bring AI-Powered Bot to Insurance Agency Platform Website (GlobeNewswire), Rated: A
Wela, a fintech company that blends artificial intelligence (AI) with human advisors, today announces a partnership with In-Fi, an insurance agency management company specifically for financial institutions. Wela’s AI-powered chatbot, personified as Benjamin, is now fully integrated into In-Fi’s website, with the function of creating a more cohesive and engaging experience for their customers. Integration into In-Fi’s website is a pivotal step for Wela, which aims to place Benjamin at the center of financial decisions for families by integrating across a variety of financial service providers.
LendInvest completes £16m development deal in three weeks (Mortgage Introducer), Rated: AAA
Property finance lender LendInvest has completed a £16m financing deal with established development finance borrower, Yogo Group, in just three weeks.
Taking a Deeper Look into the Moving Average For Funding Circle Sme Income Fund Limited (Stock Press Daily), Rated: AAA
Funding Circle Sme Income Fund Limited (FCIF.L) are in focus today as the charts are revealing that the Mesa Adaptive Moving Average (MAMA) is holding steady above the FAMA, or Fractional Moving Average. This environment typically indicates that there might be a buying opportunity aligning in technicals. When there are crossovers between the FAMA and MAMA, the shares are often widely traded. When the MAMA crosses above the FAMA, it means that the shares are likely to move higher. Conversely the opposite occurs when the MAMA crosses below the FAMA. The Mesa Moving Average was first mentioned by John Ehlers in a paper published in a 2001 edition of Technical Analysis of Stocks and Commodities Magazine.
Venture investment in UK fintech more than doubles (Financial Times), Rated: AAA
Fintech companies, such as TransferWise and OakNorth, raised $1.8bn of venture capital investment last year, up more than 150 per cent from $704m in 2016, the year of the UK’s vote to leave the EU, the data show.
The surge in UK funding contrasted with an 18 per cent drop in global fintech investments to $14.4bn, according to the report by Innovate Finance, the British fintech trade body.
The UK industry was boosted by handful of large fundraisings of more than $90m. The biggest was by TransferWise, a cross-border payments provider, which raised $280m. OakNorth, a digital lender to small businesses, raised $203m.
Banks divided on cryptocurrencies card purchases (Financial Times), Rated: AAA
British banks are debating whether to ban their customers from buying cryptocurrencies using their credit cards after Lloyds Banking Group and Virgin Money said they had imposed such a ban.
Barclays, the UK’s leading credit card issuer through its Barclaycard business, said it was “keeping this matter under close review” after holding a meeting to discuss whether to follow the lead of Lloyds on Monday.
Last week MasterCard said that cross-border volumes on its network were up 22 per cent, driven in part by customers using their credit cards to buy cryptocurrencies.
British banks are also shunning companies that handle cryptocurrencies by refusing to let them open bank accounts or closing their accounts, which has forced many of them to open accounts in Gibraltar, Poland and Bulgaria.
Lloyds Bank cutting 930 jobs (Fintech Futures), Rated: B
Lloyds is axing 930 jobs within its commercial banking, chief information office, community banking, insurance, and wealth and risk management.
Looking beyond traditional banks (Specialist Banking), Rated: A
I recently came across an article headlined: “8 in 10 SMEs still prefer traditional bank loans over alternative finance.”
It noted that 83% of financial directors preferred to go to their bank as their first port of call when seeking a loan, rather than finding an alternative, such as P2P lending or equity crowdfunding.
It claimed that a lack of understanding could be the reason for this, but pointed out that almost three-quarters of finance directors (74%) believed their knowledge of alternative finance was either “average or above average”.
Challenger Bank Tandem Partners with Cognitive Banking Company Personetics (Crowdfund Insider), Rated: A
UK Challenger bank Tandem has announced a partnership with cognitive banking company Personetics to provide users personalised insights on their spending across all of their bank accounts in one place, as well as warning people about unexpected fees and unusual activity on their accounts.
Are you holding too much cash in your ISA? (WhatInvestmen), Rated: A
In a survey of financial advisers by Octopus Investments, three-quarters of respondents said they believe their clients hold too much in their cash ISA relative to the rest of their portfolio.
The majority (83 per cent) feel their clients are put off investing in stock and shares due to the risk of losing money, followed by concerns of an overstretched (49 per cent) and volatile (46 per cent) market.
The Differences Between Short Term Loans and Payday Loans (SWNS.com), Rated: A
If you need to borrow money, a variety of options are available. Two of the most common short term borrowing options are payday loans and short-term personal loans, both of which provide immediate access to cash to help you pay bills, purchase items and run your financial life.
One of these borrowing options — payday lending — has been in the news a lot over the last few years, as new regulations make the industry more borrower friendly.
Short-Term Personal Loans
Most people use short-term loans for purchasing certain items or covering other major expenses.
From a borrower’s perspective, the advantages of short-term loans include lower overall costs than payday loans. However, the credit check process and approval period mean that loans of this type often aren’t instant enough to help borrowers deal with urgent financial needs.
Most payday loans are for relatively small amounts of money, such as £200 to £500, and are aimed at providing cash until you get paid again.
Payday loans form a major part of the UK lending industry, with an estimated market value of approximately £2 billion.
Folk2Folk appoints chapter development manager (Bridging&Commercial), Rated: B
In the newly created role, Claire will be responsible for raising Folk2Folk’s profile across the South West and Three Counties regions and improving awareness of its products to both borrowers and brokers.
The key to surviving in China’s P2P marketplace? Understanding regulations (Nikkei Asian Review), Rated: AAA
China’s increasingly competitive peer-to-peer marketplace requires players to understand government regulations and align their strategies accordingly, said Kevin Guo, co-founder and co-chairman of Dianrong, which specializes in making small loans over the internet.
Klarna partners with London College of Fashion (LeapRate), Rated: AAA
European payments provider, Klarna, has announced a UK partnership with London College of Fashion, UAL, in an exciting initiative to support the next generation of talent at the intersection of fashion and technology.
Fashion is now the UK’s largest online retail market segment, worth around £10.1bn, and this growth is only set to continue. By 2020, fashion will represent 28.8% of UK online spend.
With Klarna research showing 94% of retailers are investing in new technology to meet the needs of younger customers, opportunity for innovation in the sector has never been greater.
German digital business bank Penta raises €2.2m in seed funding (AltFi), Rated: A
Penta, a German digital bank for start-ups and small businesses, has secured €2.2m in seed funding, led by the UK-based and fintech-focused Inception Venture Capital .
Founded in May last year, Penta moved out of its private beta in December to a waitlist of over 3,000 local businesses. The platform has now opened its waitlist up to new users, and hopes to reach 10,000 businesses by the end of 2018.
P2P investors risk losses by lending to just one borrower (P2P Finance News), Rated: A
PEER-TO-PEER analysis firm 4th Way is urging investors to diversify after stress testing revealed the odds of losing money in a severe recession can be 10 times higher in some cases when lending to just one borrower on a P2P platform.
The research, released on Tuesday, applied international banking stress tests to P2P platforms it assesses such as Zopa, Funding Circle and RateSetter, and found when lending to 100 borrowers, investors have just a 0.1 per cent chance of losing 20 per cent or more of their original money.
Acquisition of 85% of Telenor Banka fails to win Serbia’s c-bank approval (SeeNews), Rated: A
Serbian online lender Telenor Banka said on Tuesday that Bulgaria-based investment fund River Styxx Capital has not received the consent of Serbia’s central bank for the acquisition of 85% of its share capital from Norwegian telecommunications group Telenor.
Telenor will support any further step that will contribute to the positive closure of the transaction, Ingeborg Ofsthus, CEO of Telenor Serbia and chair of the Telenor Banka board of directors said in a statement issued by Telenor Banka.
Revolut ditches Wirecard for in-house card issuing (Fintech Futures), Rated: AAA
Asia Most Wanted Top Ten AML Cases (Fintech News), Rated: AAA
Over the last decade, the quantity of money laundered has been steadily increasing. According to The United Nations Office on Drugs and Crime, it is estimated that approximately USD $1.6 trillion or 2.7 percent of global GDP was laundered in 2009.
Even worse, less than 1 percent of this global illicit financial flow is ever seized and frozen, meaning that the criminals are winning.
Effective anti-money laundering (AML) regulations and processes are essential to countering such criminal activity. Yet due to tighter anti-money laundering regulations in the US and Europe, money laundering activity is moving into the Asia Pacific as a way to avoid detection.
In December 2012, Standard Chartered was ordered to pay USD $330m to settle claims by United States government agencies that it had moved hundreds of billions of dollars on behalf of Iran. It was suggested that this practice exposed the international financial system to exploitation by to “terrorists” and “drug kingpins”.
Open banking role models: Fidor, Rabobank and BBVA (American Banker), Rated: A
Google accelerator focuses on emerging markets (IT Web), Rated: A
In its fifth year, Google Launchpad Accelerator is taking place in San Francisco this week. It focuses on start-ups that already have a product, with a good market fit, and are ready to scale.
OneFi has created Paylater, an online provider of digital financial services for the underbanked in West Africa.
Nubank is a financial technology company offering a fully digital and branchless experience, and Viva Real is an online real estate marketplace that connects buyers, sellers and renters with properties in Brazil. There is one other Brazilian start-up, Loggi, which creates new-wave logistics.
Kubo.financiero, a P2P lending platform, from Mexico.
Ayannah from the Philippines enables affordable and accessible digital financial services to be delivered to the world’s emerging middle-class.
Banks are exploiting loyal customers, warns Productivity Commission (The Guardian), Rated: AAA
The Australian financial system is uncompetitive, allowing banks and insurers to boost profits by exploiting loyal customers and adding up to $87 a month to the average mortgage repayment.
That is the conclusion of the Productivity Commission’s highly critical draft report into the sector, which finds it is “unquestionably strong” but calls for greater transparency to compare financial products and for regulators to gain powers to promote competition.
Australia gives regulator sweeping powers over bank bosses’ pay (Reuters), Rated: A
Australia has given its financial regulator sweeping powers to cap bank bosses’ pays, delay their bonuses and even ban them from the industry if found guilty of non-compliance, as it scrambles to restore trust in the scandal-hit sector.
ADGM is region’s 1st Fintech regulator, says Al Sayegh (WAM.ae), Rated: AAA
In the future, Fintech will be the most important aspect of financial services in the world, according to Ahmed Ali Al Sayegh, the Chairman of Abu Dhabi Global Market, ADGM.