- Today’s main news: Is Amazon about to partner with JP Morgan Chase? Elevate saves customers $3B over payday loan alternatives. LendInvest hosts a roadshow. Folk2Folk lenders provide 200M GBP to UK rural businesses. China issues first personal credit rating license.
- Today’s main analysis: Credit card losses surge at small banks.
- Today’s thought-provoking articles: FT Partners’ CEO monthly alternative lending market analysis. An interview with Peter Renton. How today’s online lenders can fight global financial crime.
- How Amazon could facilitate online shopping for the unbanked. AT: “Pundits have been saying for over a year now that Amazon will get into banking. The most likely course for that is through a bank like JPMorgan Chase, which can provide Amazon credibility in the banking sector without regulatory red tape. Amazon can offer banking services without being a bank.”
- Will Amazon pitch financial advice to millennials?
- Consumers would use an Amazon cryptocurrency, evidently.
- Elevate saves customers over $3B more than payday loan alternatives. AT: “This is a great differentiator and gives Elevate a huge competitive advantage.”
- Alternative lending market analysis for March 2018.
- An interview with Peter Renton. AT: “Renton has interesting things to say about online lending, but he goes beyond alternative lending into cryptocurrency and says some interesting things about that too.”
- Credit card losse surge at small banks. AT: “Small banks can’t afford losses at this time. If it continues, we could see smaller banks getting gobbled up by larger banks, and maybe even fintechs.”
- tZero acquires VerifyInvestor for $12M.
- Lend Academy interview with Gina Harman of Accion.
- LendingPoint launches Merchant Solutions Platform.
- Grameen America eyes banks to expand microlending.
- Great Plains Lending hit with RICO lawsuit.
- The SEC subpoena explained.
- How Stash Invest reaches the underserved.
- Core upgrade for Orion’s dynamic reporting on private assets.
- Does the U.S. have a sandbox in its future?
- Shinnecock Partners publishes ‘how to’ for private investors on direct lending.
- Fintechs buying up Manhattan office space.
- Albuquerque among top 10 best places for small businesses.
- LendInvest’s roadshow announcement.
- Folk2Folk lenders provide 200M GBP to rural businesses.
- LendingBlock boosts crypto development.
- Tales of failed P2P lenders.
- FOS tells advisors to pay client over 30K GBP loss through unsecured SIPP loan.
- P2P lending high up the respectability scale.
- Archover converts a critic.
- Beauty marketplace founder joins Blend Network.
- Metro Loans presents unsecured business startup lending for unemployed.
- United States
- Amazon wants to make it easier to shop its website without a credit card (CNBC), Rated: AAA
- Will Amazon Pitch Financial Advice To Millennials? (Financial Advisor), Rated: A
- Consumers interested in idea of Amazon-created cryptocurrency, survey reveals (The Block), Rated: A
- Elevate Milestone: Customers Have Saved More Than $ 3 Billion Over PayDay Loan Alternatives (Crowdfund Insider), Rated: AAA
- FT Partners’ CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA
- A Dialogue with Peter Renton: Cryptocurrency and Beyond (deBanked), Rated: AAA
- Credit-Card Losses Surge at Small Banks (WSJ), Rated: AAA
- tZero Has Acquired VerifyInvestor for $12 Million in Cash (Crowdfund Insider), Rated: A
- Gina Harman of Accion (Lend Academy), Rated: A
- LendingPoint Launches Merchant Solutions Platform (BusinessWire), Rated: A
- Grameen America eyes banks in ambitious push to expand microlending effort (American Banker), Rated: A
- RICO suit filed against Great Plains Lending over allegations of predatory online lending scheme (Legal NewLine), Rated: A
- THE SEC’S ICO SUBPOENA EXPLAINED (Irish Tech News), Rated: A
- How Stash Invest is trying to reach the underserved (Tearsheet), Rated: A
- Core Upgrade Brings Orion’s Dynamic, Time-Saving Reporting to Private Assets (BusinessWire), Rated: A
- Is there a sandbox in the US’s future? (Euromoney), Rated: A
- Shinnecock Partners Publishes “How to” for Private Investors on Direct Lending (PRWeb), Rated: B
- Fintech firms are gobbling up Manhattan office space (The Real Deal), Rated: B
- Albuquerque ranks among 10 best places for new small businesses (Biz Journals), Rated: B
- United Kingdom
- Roadshow Announcement (London South East), Rated: AAA
- Folk2Folk Lenders Provide £200 Million to Rural Businesses in the UK (Crowdfund Insider), Rated: AAA
- Exchange Platform LendingBlock Boosts the Development of the Crypto Sphere (Coinspeaker), Rated: A
- Tales of failed peer-to-peer lenders (AltFi), Rated: A
- FOS tells adviser to pay client over £30k loss through unsecured Sipp loan (Money Marketing), Rated: A
- P2P lending “high up the scale of respectability” for non-standard investments (AltFi), Rated: A
- Archover announces new non-exec director, nears profitability (AltFi), Rated: A
- Beauty marketplace founder joins Blend Network management team (P2P Finance News), Rated: A
- Metro Loans Presents Unsecured Business Start up Loans for Unemployed in UK (MENAFN), Rated: B
- China Issues its First Personal Credit Rating License (Crowdfund Insider), Rated: AAA
- Marketplace lending platform Maliyya scores EUR1.3 million in seed funding (Finextra), Rated: AAA
- How can today’s generation of lenders fight global financial crime? (LendIt), Rated: AAA
- Crypto’s missing pieces: Building a sustainable financial ecosystem (International Business Times), Rated: AAA
- Profile Software’s innovative solutions for banking and wealth industry (Hubbis), Rated: B
Amazon wants to make it easier to shop its website without a credit card (CNBC), Rated: AAA
Amazon is in early talks with financial institutions including J.P. Morgan Chase to help launch checking account-like products, aimed at younger customers and those without bank accounts, The Wall Street Journalreported Monday.
More than a quarter of U.S. households have no or limited access to checking and savings accounts. Unbanked doesn’t necessarily mean unconnected, about 6 in 10 unbanked consumers have a smartphone, according to the Pew Charitable Trusts.
New prime subscriptions flattened in the third quarter of 2017, according to analysts at Morgan Stanley. Another survey by Piper Jaffray in June said that 82 percent of U.S. households with more than $112,000 in annual income are already Prime members. Its reach is the lowest among those that make less than $41,000 a year.
In November, it announced that shoppers at 7-Eleven stores nationwide could deposit as little as $15 and as much as $500 into an Amazon account through its “Amazon cash” program. Shoppers can then use that cash to shop on Amazon. Nearly one-half of the U.S. population lives within one mile of a 7-Eleven store.
Will Amazon Pitch Financial Advice To Millennials? (Financial Advisor), Rated: A
If Amazon is successful in creating a banking relationship with its vast customer base of millennials, can an investment advice platform be far behind?
Stich predicts that Amazon, a company with a $700 billion market cap, will offer three levels of investment accounts to millennials and interested customers: It could offer do-it-yourself accounts and robo-advisory accounts; and for those who want a personal advisor, Amazon could create and refer customers to a state-by-state network of select investment professionals.
Consumers interested in idea of Amazon-created cryptocurrency, survey reveals (The Block), Rated: A
More than half of consumers would be open to using an Amazon-created cryptocurrency, with Amazon Prime users even keener, according to poll findings from student loan marketplace LendEDU.
The study, which polled 1,000 consumers who had purchased a product from Amazon in the past 30 days, found 51.7% would be interested in an ‘Amazon Coin’, with the number increasing to 58.27% for Prime members, and only one in five (21.9%) saying no.
Only 17% of those polled said they would trust Amazon more than a traditional bank, compared with 23% who disagreed and 38% who said levels of trust would be about the same. Nine in 10 respondents however said that overall, they trusted Amazon to have their best interests in mind, with 52.49% answering ‘yes, very much so’ and 37.56% opting for ‘somewhat.’
Elevate Milestone: Customers Have Saved More Than $ 3 Billion Over PayDay Loan Alternatives (Crowdfund Insider), Rated: AAA
Elevate Credit, Inc. (Elevate), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, announced on Monday its customers have saved more than $3 billion to date, versus what they would have paid for payday loans. $1.3 billion was saved in 2017 alone.
FT Partners’ CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA
This month’s report features an exclusive interview with Keith Smith, Co-founder and CEO of Payability, a platform that provides friction-free financing to sellers operating on digital marketplaces. In our conversation with Keith, he delves into the vision behind founding Payability and the unique opportunities and strategies of lending to online marketplace sellers.
* Swift Financial Sells to PayPal (FT Partners Advised)
* Breeze (Now Canvas) Sells to Ford Motor Co. (FT Partners Advised)
* Navient Acquires Earnest for $155 million
* Warburg Pincus Acquires Majority Stake in Fiserv’s Lending Solutions Business
* GreenSky Raises $200 million in Financing from PIMCO (FT Partners Advised)
* INSIKT Raises $50 million in Series D Financing Led by Grupo Coppel (FT Partners Advised)
* Credit Sesame Raises $42 million in Equity and Venture Debt (FT Partners Advised)
* defi SOLUTIONS Raises $55 million in Series C Financing Led by Bain Capital Ventures (FT Partners Advised)
* Prosper Raises $50 million in Series G Financing (FT Partners Advised)
Download and read the full report here.
A Dialogue with Peter Renton: Cryptocurrency and Beyond (deBanked), Rated: AAA
deBanked: Why did you decide to rebrand LendIt as LendItFintech?
Renton: The main reason is that we have moved beyond the online lending space.
deBanked: What about online lending? The industry has gone through a lot of changes in its relatively short history. How do you expect to see the competitive landscape change in the next year or so? What about farther out?
Renton: The online lending space has gone through a lot of changes in its short history. I feel like the biggest trend we’re seeing right now is banks launching their own platforms. Take Goldman Sachs with the Marcus online lending platform, for example. More than anything else that has happened in the history of online lending that is among the most telling for the future, I think.
deBanked: What do you see as the biggest risks for online lenders today? How can they best overcome these challenges?
Renton: As an industry, we have to focus on profitability.
Credit-Card Losses Surge at Small Banks (WSJ), Rated: AAA
Missed payments on credit cards at small banks have risen sharply over the past year, a sign that their cardholders are taking on more debt than they can handle. Their charge-off rate, or the share of outstanding card balances written off as a loss after consumers failed to pay, hit 7.2% in the fourth quarter, up from 4.5% a year ago, according to Federal Reserve data.
But they’ve especially surged at smaller banks, those outside the 100 largest by assets that have less than around $10.4 billion in assets. There, the average charge-off rate is near an eight-year high, while the 3.5% loss rate at large banks remains well below the 10.6% seen in 2010.
tZero Has Acquired VerifyInvestor for Million in Cash (Crowdfund Insider), Rated: A
Buried within the tZero Offering Memorandum for its ongoing initial coin offering were several interesting items of note. The first was the fact the SEC was in the process of reviewing the offering. Another interesting bit of information was the fact tZero has acquired a majority stake in VerifyInvestor.
Gina Harman of Accion (Lend Academy), Rated: A
My next guest on the Lend Academy Podcast is Gina Harman, the CEO of the U.S. Network for Accion. They are a non-profit lender with 14 regional offices around the country focused on providing funding to underserved businesses. Accion has a very consultative approach to lending so their work often involves face to face meetings with the potential borrowers. But they are also serving the entire country through online means today.
LendingPoint Launches Merchant Solutions Platform (BusinessWire), Rated: A
LendingPoint, the company working to revolutionize access to consumer credit, today unveiled LendingPoint Merchant Solutions to provide merchants and other service providers a fully integrated one-stop retail financing platform to convert more consumers at the point of sale.
LendingPoint Merchant Solutions combines the LoanHero merchant onboarding, program management and reporting technology with LendingPoint’s industry-leading credit underwriting, risk management, and customer service expertise.
Grameen America eyes banks in ambitious push to expand microlending effort (American Banker), Rated: A
Grameen America is looking for banks and social impact investors to help fuel significant growth in its microlending effort.
The plan is to double the size of its loan portfolio, and lend a cumulative total of $2 billion, over the next five years, David Gough, its chief financial officer, said in an interview.
RICO suit filed against Great Plains Lending over allegations of predatory online lending scheme (Legal NewLine), Rated: A
Vanessa C. Grainger, Beverly Kristina Miller and Lilya J. McAtee, individually and on behalf of all others similarly situated, filed a complaint on Feb. 16 in the U.S. District Court for the Middle District of North Carolina against Great Plains Lending LLC, Kenneth E. Rees, Victory Part Capitol Advisors LLC, et al. over alleged violation of the Racketeer Influenced and Corrupt Organizations Act.
THE SEC’S ICO SUBPOENA EXPLAINED (Irish Tech News), Rated: A
“The SEC typically sends a subpoena for one of two reasons: you are either a direct target of a new or ongoing investigation or you are involved somehow with an entity or individual that is under investigation,” notes William Skelley, Co-founder of William Chris, a Dubai-based consulting firm founded by David Drake and Simon Cocking.
Clayton had stated that most ICOs need to register with SEC because, like other securities that the agency regulates, they trade coins in secondary markets. However, ICO companies have shown reluctance in subjecting themselves to SEC’s oversight despite the fact that up to $8.7 billion has been raised through ICOs, based on CoinDesk data.
How Stash Invest is trying to reach the underserved (Tearsheet), Rated: A
Stash is letting its customers invest in single stocks, the company’s latest major investment product launch beyond theme-based exchange-traded funds.
Stash lets customers buy portions of shares (called fractional shares) with a minimum balance of $5.
Core Upgrade Brings Orion’s Dynamic, Time-Saving Reporting to Private Assets (BusinessWire), Rated: A
Orion Advisor Services, LLC (“Orion”), the premier portfolio accounting service provider for advisors, today announced the release of its Alternative Investment Platform (“AIP”), a tool that lets Orion advisors show their clients’ private assets as easily as their public holdings at no additional cost.
AIP lets financial advisors track and maintain alternative investment data for client assets held in private equity, direct investments, venture capital, hedge funds, private real estate, REITs, and more, with ease and efficiency. AIP lets advisors aggregate and update committed capital amounts, total cash distributions, return of capital, and commitment amounts for alternative investments of all types into client reports alongside publicly-traded assets to create a cohesive picture of the client’s net worth.
Is there a sandbox in the US’s future? (Euromoney), Rated: A
The cooperation between the FCA and the CFTC will cover information sharing, referrals and learning from proofs of concept, trials or innovation competitions.
Various agencies – including the CFTC, SEC and the Financial Industry Regulatory Authority (Finra) – oversee specific segments of the market, and for a US sandbox regime to be successful there would need to be substantial collaboration and coordination between all of these agencies.
Direct lending is a new category that is reshaping the asset management and investment landscape, yet most investors see the arena as a “black box.” Shinnecock Partners, a 28-year old family office boutique with significant expertise in alternative finance and fintech, offers investors insights into the category with its recently published report: High Yield for Investors in Specialty Finance: Exploring Opportunities in Factoring and Merchant Cash Advance. Written and researched by the firm’s founding partner, Alan C. Snyder and co-author Marla Harkness, the 37-page report is a virtual blueprint for investors, RIAs, advisory firms and the new generation of innovators who have started alternative lending companies to serve a vacuum left by large banks and community banks that used to serve small and mid-size business pre-recession.
The paper covers:
- In-depth descriptions of both factoring and merchant cash advance (MCA) loan originators
- Insider lingo, so investors are up to speed when reviewing documents
- Regulatory history and framework
- Detailed investor evaluation checklists
You can access the report here: High Yield For Investors in Specialty Finance.
Fintech firms are gobbling up Manhattan office space (The Real Deal), Rated: B
Fintech firms and units of larger companies accounted for roughly 877,000 square feet of Manhattan office leasing last year, according to JLL data reported by the Wall Street Journal. That’s almost triple the sector’s total for 2014.
Venture capital funding for fintech firms has roughly doubled from 2014 to $2.2 billion in 2017, according to PricewaterhouseCoopers.
Albuquerque ranks among 10 best places for new small businesses (Biz Journals), Rated: B
Albuquerque ranked No. 8 on LendingTree’s list of the best cities for new small businesses released Feb. 27.
Roadshow Announcement (London South East), Rated: AAA
LendInvest Limited, the specialist mortgage provider, announces that it has mandated Peel Hunt to arrange a series of meetings with fixed income investors in the UK and Channel Islands, commencing the week of 5 March 2018, to discuss a possible second issue of sterling denominated bonds.
Folk2Folk Lenders Provide £200 Million to Rural Businesses in the UK (Crowdfund Insider), Rated: AAA
Folk2Folk, a peer-to-peer (P2P0 lending platform for local and rural businesses, announced on Monday it has now lent £200 million, providing a valuable source of capital to hundreds of local businesses across the UK. According to the online lending, this milestone demonstrates the strong demand in the company’s Local Lending Movement as Lenders and Borrowers are attracted by Folk2Folk’s platform, providing a fair exchange that sees no difference between what Borrowers repay and Lenders receive on a monthly basis.
Folk2Folk’s lending milestone was reached thanks to a growing community of local Lenders who have placed £20,000 or above on the lender’s platform. The average lent per Lender now exceeds £65,000. Lenders receive 6.5%pa interest which is paid monthly, helping them achieve their financial goals, whether it be an additional income for retirement or funding a life event like a once in a lifetime holiday.
Exchange Platform LendingBlock Boosts the Development of the Crypto Sphere (Coinspeaker), Rated: A
Lendingblock is an outstanding representative of the “picks and shovel” business of the crypto economy. The recent announcement of an ICO by this company raises an important issue: can these followers of Gold Rush traditions achieve the same success?
Lendingblock is an open exchange platform for both borrowers and lenders of crypto currencies. The platform enables owners of digital assets to earn passive, low risk interest income, while borrowers get an opportunity get assets needed to support trading, hedging and working capital needs.
Tales of failed peer-to-peer lenders (AltFi), Rated: A
A little-known pawnbroking and property-backed peer-to-peer lending platform named Collateral has gone into administration, according to reports. Its investors are in limbo, unable to access their money or even view their accounts.
Be The Lender folded in August 2014. It was a tiny peer-to-peer platform with a focus on lending to small businesses.
GraduRates was a very small peer-to-peer lender specialising in loans to post-graduate students. In 2014, with a new regulatory regime for P2P firms looming, its founder Jonathan Webb decided to close down operations.
TrustBuddy was a peer-to-peer firm specialising in short-term loans for consumers. It is perhaps the best-known example of a P2P blow-up because it was the first big platform to go belly-up.
Finally, the complete comedy that was the Ezubao blow-up. There are many, many examples of failed Chinese P2P platforms, but Ezubao takes the biscuit.
FOS tells adviser to pay client over £30k loss through unsecured Sipp loan (Money Marketing), Rated: A
The Financial Ombudsman Service has told an adviser to compensate a client who they told to make an unsecured loan to a third party with money from their Sipp.
Mr H says O’Rourke Partnership recommended and arranged for him to make an unsecured loan of £29,325 to the third party from funds he held in his Sipp.
The loan was to be over a short-term at a high rate of interest but the loan has not been repaid and Mr H has lost his money.
An investigator reviewed the complaint, thought the advice was unsuitable and recommended that it should be upheld.
BondMason boss warns that recent FSCS fines are likely make SIPP providers extra cautious in reviewing non-standard investments.
An estimated one million people are said to have taken up a SIPP (self-investment pension plan) since the wrapper was first introduced as part of the government’s Pension Freedom Reforms in April 2015. But squeezing non-standard investments into the still relatively-new tax wrapper hasn’t been easy.
Archover announces new non-exec director, nears profitability (AltFi), Rated: A
The peer-to-peer business lender is turning dissenters into directors with its latest hire, after hitting £60m in lending.
ArchOver, the p2p business lending platform, has announced it will be appointing Bill Johnston to its board as a non-executive director. Johnston previously was an outspoken critic of p2p lending and alternative finance in general, but says he has been swayed after seeing ArchOver succeed.
Beauty marketplace founder joins Blend Network management team (P2P Finance News), Rated: A
A FORMER Morgan Stanley banker turned beauty marketplace founder is among two appointments to the board of a new peer-to-peer lending platform aiming to become the “Goldman Sachs of P2P”.
Roxana Mohammadian-Molina, a former Morgan Stanley vice president and founder of Zeebba – which arranges at-home beauty services – has joined asset-backed property lender Blend Network as business development manager.
Metro Loans Presents Unsecured Business Start up Loans for Unemployed in UK (MENAFN), Rated: B
The UK based direct lending company has come up with unsecured business start up loans to build up new entrepreneurs.
China Issues its First Personal Credit Rating License (Crowdfund Insider), Rated: AAA
On February 22, the People’s Bank of China published an announcement about setting up personal credit rating agencies. According to the document, Baihang Credit Rating Co., Ltd., was granted the first personal credit rating license in China, and the qualifications of its management team (including board member, supervisors and senior management) has all received approval.
A New Ransomware Virus Could Steal All Your Alipay Balance
Recently, a ransomware virus called “unicorn 2.1” raged online. It spreads through QQ and other Instant Messengers.
Once the virus hacks the computer, it will lock all the files in the computer and requires the victim to pay ¥3 yuan by scanning with his / her Alipay. As long as the victim scans the QR code, the hacker will be able to get access to the Alipay account and steal all the balance.
Marketplace lending platform Maliyya scores EUR1.3 million in seed funding (Finextra), Rated: AAA
Maliyya, a fintech company engaged in development of a P2P lending and borrowing platform, has just closed the first seed investment round of USD$1.3 million from Ground1 Ventures, a private investment firm based out of UK.
Targeting to become a primary P2P lending and borrowing platform for the Middle East, North African and Asian Region, Maliyya is working on to roll out its MVP in the coming months.
How can today’s generation of lenders fight global financial crime? (LendIt), Rated: AAA
What if you lent money to someone who used it to finance an act of terrorism? Or to disguise the proceeds of drug dealing. How would this make you feel and what would it mean for the reputation of your growing business?
Today’s generation of FinTechs however, face huge technology and operational challenges – they interface with banks and therefore need ‘bank-grade’ solutions for KYC/AML but existing technology solutions struggle to fit with their unique needs. Increasingly, they are looking to new technology to help them comply with global KYC/AML standards, maintain banking relationships and ultimately fight financial crime.
What are the financial crime risks for lenders and FinTechs?
Lenders spend billions of dollars a year on compliance solutions trying to combat their financial crime risk, which broadly fall into two categories: anti-money laundering / terrorist financing (AML/CTF) risk and fraud.
Crypto’s missing pieces: Building a sustainable financial ecosystem (International Business Times), Rated: AAA
Centralized, “off-chain” cryptocurrency exchanges, including Bitfinex and Poloniex, support margin-lending. Although limited to certain customer groups, and a limited number of assets, they generally fit the definition of money markets. The downside is that investors have to trust that the exchange won’t get hacked or abscond with assets. That’s a big risk. The recent $530 million heist from the Japanese exchange, Coincheck, isn’t likely to be the last, and many customers feel that the incremental returns aren’t worth the risk. That may change as exchanges move toward adoption by the existing financial system.
Peer to peer lending protocols, including ETHLend and Lendroid, eliminate the risk of centralization by allowing users to lend to each other directly. But to an outside observer, they hardly resemble money markets with a uniform interest rate.
Peer to peer lending protocols, including ETHLend and Lendroid, eliminate the risk of centralization by allowing users to lend to each other directly. But to an outside observer, they hardly resemble money markets with a uniform interest rate.
Profile Software’s innovative solutions for banking and wealth industry (Hubbis), Rated: B
The company today has a presence in Europe, the Middle East, America, Asia and Africa, throughout those regions delivering innovative solutions to both start-ups and established banking and finance institutions, through direct communication or a reliable partners network.
Profile’s leading platform, Axia is an omnichannel wealth management platform covering all aspects of the investment operations that modularly, and with flexibility, embrace the whole spectrum of portfolio management, with continuous updates on client onboarding, online trading, compliance issues (such as MiFID II), instruments, custodian links and bank interfaces, financial planning, and so forth. The investment management solution also supports operations in insurance firms, private banking, custody, brokerage needs and more, with a successful track record.