- Today’s main news: LendingTree launches free credit monitoring. Paytm gets into P2P lending. EquityMultiple stops promoting Reg D 506c offerings. Trusted Quid customer info stolen in data breach. PPDai grows revenue as stock rises.
- Today’s main analysis: Why China Rapid Finance’s ownership structure is important.
- Today’s thought-provoking articles: Are Amazon, Costco, and Target inching into wealth management? Open banking causes alt lenders to reassess partnerships. Digital banks raise the bar on customer experience.
- LendingTree launches free credit monitoring. AT: “In partnership with TransUnion. This is a great way to attract new customers, but they have to compete with Credit Karma and the dozens of other companies out there doing the same thing.”
- EquityMultiple stops promoting Reg D 506c. AT: “Opting instead for 506b rules.”
- Amazon, Costco, Target: wealth managers? AT: “This is all speculation, but it’s worth thinking about. If WalMart can get into online marketing, why not?”
- Savvy ways to invest $10K in 2018. AT: “Worth a read for those new to online lending.”
- SMB polls reveals value of tech investments.
- Startups tell investors to diversify.
- Buyers acquire taste for deposit-rich banks.
- New York surveys online lenders.
- Alt lenders reassess partnerships in the wake of open banking.
- Open banking shows mixed results.
- Trusted Quid had 66K customer details stolen with data breach.
- HouseSimple on home sales.
- LoanBit showcase.
- IFISA investments offer 5 to 10 percent.
- Is Ping An China’s most valuable insurer?
- PPDai sees shares rise as revenue grows.
- Why China Rapid Finance’s ownership structure is important. AT: A great read.”
- China toughens third-party payment supervision.
- Denmark: basisbank to implement Fico Blaze Advisor.
- Europe: How digital banks raise the bar for customer experience.
- India: Paytm wants a piece of P2P lending. AT: “They’ve already built an outstanding presence in payments, so why not slide into P2P lending? There is a lot of competition, but they can leverage their payments reputation to compete with Faircent and other top lenders moving ahead of the smaller players.”
- United States
- LendingTree Launches Free Credit Monitoring Service (LendingTree), Rated: AAA
- Real Estate Investment Platform EquityMultiple Gives up on Reg D 506c (Crowdfund Insider), Rated: AAA
- Amazon in wealth management? What about Costco or Target? (Financial Planning), Rated: AAA
- 5 Savvy Ways To Invest $ 10,000 In 2018 (Forbes), Rated: A
- Poll of SMBs Reveal Plans to Make Tech Investments Amid Strong Sales Growth (WWD), Rated: A
- Hundreds of Start-Ups Tell Investors: Diversify, or Keep Your Money (New York Times), Rated: A
- Buyers acquire taste for deposit-rich banks (American Banker), Rated: A
- NYDFS sends survey request to online lenders (National Law Review), Rated: B
- United Kingdom
- Open Banking prompts UK fintechs to reassess collaboration partners (P2P Finance News), Rated: AAA
- Early Returns From Open Banking Show a Mixed Picture (Lend Academy), Rated: A
- Payday lender Trusted Quid admits 66,000 customers details were stolen in data breach (The Sun), Rated: AAA
- Feature: Is London cooling? (Mortgage Strategy), Rated: A
- BUSINESS SHOWCASE : LOANBIT (Irish Tech News), Rated: A
- ISAs 2018: Innovative Finance Isa can offer rates from 5 to 10 per cent (Express), Rated: A
- Is Ping An China’s Most Valuable Insurer or a Tech-Investing Fad? (The Wall Street Journal), Rated: AAA
- Shares Rise as PPDai Reports Revenue Growth, Stock Buyback (Capital Watch), Rated: AAA
- Why China Rapid Finance Limited’s (NYSE:XRF) Ownership Structure Is Important (Simply Wall St News), Rated: AAA
- China toughens supervision on third party payment (xinhuane), Rated: B
- European Union
- Danish online lender basisbank to implement Fico Blaze Advisor (Finextra), Rated: B
- How digital banks are raising the bar for customer experience (Tearsheet), Rated: AAA
- Digital payments player paytm wants slice of P2P lending (The Economic Times), Rated:AAA
LendingTree Launches Free Credit Monitoring Service (LendingTree), Rated: AAA
LendingTree, the nation’s leading online loan marketplace, today announced the launch of a free credit monitoring service within the My LendingTree platform. In partnership with TransUnion, LendingTree monitors users’ credit profiles daily and sends alerts of any changes or potential suspicious activity within 30 minutes of the credit report being updated.
Real Estate Investment Platform EquityMultiple Gives up on Reg D 506c (Crowdfund Insider), Rated: AAA
No longer will EquityMultiple publicly promote its real estate offerings online and elsewhere. Previously, EquityMultiple has leveraged Reg D 506c – a new securities exemption created by the JOBS Act of 2012. This rule allowed issuers and platforms to promote offerings on the internet – via social media and elsewhere – in contrast to old Reg D (506b) that was barred from any advertising. And why on earth would EquityMultiple not want to promote unique and compelling investment opportunities? Because of the broken nature regarding the general solicitation rule.
Amazon in wealth management? What about Costco or Target? (Financial Planning), Rated: AAA
With Amazon inching closer to financial services, industry observers say its a worthy exercise to think about other potential retail competitors.
“People may roll their eyes in the land of wealth management and financial services, but it’s no longer a place for just banks. They don’t own it anymore,” said Doug Fritz, CEO and founder of F2 Strategy, a technology and marketing consulting firm to the wealth management industry based in the San Francisco Bay area.
Costco seems like the most obvious candidate to get into the wealth management space, said Fritz.
Incumbents such as Charles Schwab have already boxed in robos with products and are not being shy about advertising them, he adds.
5 Savvy Ways To Invest $ 10,000 In 2018 (Forbes), Rated: A
Online Real Estate Investing
Fundrise.com is an investing platform that lets you invest in private real estate assets without dealing with the minutiae that comes with owning traditional rental real estate.
Another option within the online real estate investing is RealtyShares. Realty Shares has been featured in the Wall Street Journal, Bloomberg, and Forbes, and is already being used by 120,000 investors nationwide. RealtyShares CEO Nav Athwal credits the company’s success to their ability to help accredited investors invest into real estate opportunities nationwide without a huge initial investment. Not only can investors browse opportunities by asset type, but they can buy in for as little as $5,000.
As an investor in Lending Club, you can spread your investment across hundreds or even thousands of loans in increments as low as $25. Lending Club has offered a historical return of 4-6% per year after accounting for defaults, although you can score a higher rate of return if you make riskier loans.You only need $1,000 to get started as an investor with Lending Club, and you can automate your investments based on a pre-selected strategy or manually select loans that meet your criteria.
Prosper is another peer-to-peer lender that work similarly. With Prosper, you can invest your cash into loans taken out by individuals and earn a healthy rate of return. Prosper says their investors have earned an average return of 6.59% thus far, making them a top contender in the peer-to-peer lending space.
In a recent poll of small- to medium-sized businesses, financial and technology firm Kabbage Inc. found high expectations for sales growth this year as well as plans to make investments aimed at automation.
Kabbage, which offers lines of credit of up to $250,000 and cites retail as its top vertical, said more than 67 percent of the brick-and-mortar retailers polled expect revenue growth of over 20 percent this year. More than 73 percent of the online retailer respondents expect the same. The survey was based on responses from 800 businesses.
Regarding automation technology, nearly 44 percent of physical store retailers have plans to make investments in this area compared with 60 percent of online retailers. With cyber security and similar fraud prevention technologies, about 44 percent of both online and physical store retailers have plans to make investments in these solutions.
Hundreds of Start-Ups Tell Investors: Diversify, or Keep Your Money (New York Times), Rated: A
The American venture capital industry, which invested $84 billion in more than 8,000 companies last year, has long faced little to no impetus to alter its demographics. Venture firms are usually small private companies made up of former tech executives or financial types, who are mostly male and white. And because venture firms operate with long-term horizons — their funds generally invest over a 10-year period — the industry’s pace of change is often glacial.
In 2016, 11 percent of venture capital firms’ investment partners were women, according to a survey by the National Venture Capital Association and Deloitte. The survey found no black investment partners at venture firms, while 2 percent of investment partners were Latino.
Buyers acquire taste for deposit-rich banks (American Banker), Rated: A
Total loans at banks with less than $10 billion in assets rose by nearly 17% between 2012 and 2017, surpassing the roughly 5% increase in deposits over that time, according to data from the Federal Deposit Insurance Corp.
NYDFS sends survey request to online lenders (National Law Review), Rated: B
The New York Department of Financial Services has sent a letter directed to businesses that the DFS “understands…may be involved in online lending in the State of New York” and that asks recipients to complete a “New York Marketplace Lending Survey” that they can access online.
The letter states that the DFS is conducting the survey to gather information for a public report that it is required to issue by July 1, 2018 and which must include information about online lenders operating in New York and their business practices, including lending practices, interest rates and costs charged, and consumer complaints and investigations about the industry.
Open Banking prompts UK fintechs to reassess collaboration partners (P2P Finance News), Rated: AAA
A report from accountancy firm EY, released on Thursday, found that 59 per cent of UK fintech firms see Open Banking as an opportunity to review their collaboration strategies.
The survey of 31 UK fintech firms also found that 74 per cent of respondents believe that new competitors such as tech firms will become increasingly important over time.
The new data rules, which mandate high street banks to share anonymised customer data with approved third parties, came into effect in January 2018. Peer-to-peer lenders such as Zopa and Lending Works have already announced their plans to capitalise on the new initiative.
94 per cent of fintech firms said they were focused on enhancing their current products and services and 81 per cent said they are planning to use Open Banking to build new services.
Early Returns From Open Banking Show a Mixed Picture (Lend Academy), Rated: A
Banks have not really stepped into the new world until recently as HSBC has stated they will be set to go live with a product by early May, RaboBank is creating a mobile ecosystem and RBS has explained they are working on solutions which includes a stand alone digital bank.
Digital banks Monzo and Starling Bank have already established themselves as early leaders in the market with their open APIs. Both have created financial marketplaces to allow for easy integration and access to different banking services.
Payday lender Trusted Quid admits 66,000 customers details were stolen in data breach (The Sun), Rated: AAA
Details of 66,000 customers including phone numbers, dates of birth, addresses, loan details, employment status and bank account information, were all taken from the website.
In a statement the company said: “There has been a theft of data from unauthorised access to the Trusted Quid website.”
“The incident relates to data directly entered by people applying for a loan only on the Trusted Quid website between 1 July 2016 and 17 February 2018.”
Trusted Quid say they have made three previous attempts to contact customers affected by the data breach.
Feature: Is London cooling? (Mortgage Strategy), Rated: A
Research from online estate agent HouseSimple in January showed only 387 properties for sale in zones 1–2 below the magic £300,000 level, rising to just 1,235 in zone 3. For homes valued at £300,001–£500,000, there were just 7,687 in zones 1-3 that were eligible for a stamp duty cut.
BUSINESS SHOWCASE : LOANBIT (Irish Tech News), Rated: A
LoanBit is a multi-currency platform that supports everything from fiat currencies to the latest cryptocurrencies. It allows you to send money in an encrypted format and secure it with state-of-the art security measures.
LoanBit offers an armor of a protection for the lenders. It safeguards the interests of the lenders in the community by covering up to 75% of the loan.
With LoanBit you can:
- Keep money in a multi-currency wallet,
- Trade on the integrated exchange,
- Invest money in cryptocurrencies, and
- Get a loan in the currency of your choice
ISAs 2018: Innovative Finance Isa can offer rates from 5 to 10 per cent (Express), Rated: A
The Innovative Finance Isa, or Ifisa, was announced by the Government in April 2016, giving ordinary savers the opportunity to invest in growing British businesses free of tax through the growing peer-to-peer (P2P) lending market, sometimes called crowdlending.
Is Ping An China’s Most Valuable Insurer or a Tech-Investing Fad? (The Wall Street Journal), Rated: AAA
The $100 billion question for the world’s second-largest insurer: is it an insurance firm or is it a technology firm?
Shares of China’s Ping An Insurance—the biggest insurer by market value after Warren Buffett’s Berkshire Hathaway—have more than doubled in the past year, far outpacing peers. The increase in its market capitalization—of more than $100 billion—is partly due to the fast growth of its life- and health-insurance business. The value of new business last year grew 33% from 2016.
Shares Rise as PPDai Reports Revenue Growth, Stock Buyback (Capital Watch), Rated: AAA
PPDai Group Inc., an online peer-to-peer lending platform in China, reported today that its operating revenues for the fourth quarter increased more than 85 percent compared with a year earlier.
The Shanghai-based company, which completed its initial public offering in November, said during the quarter, it had a net loss attributable to ordinary shareholders of $200.4 million, or 89 cents per American depositary share. That was in contrast to income of $2.8 million a year earlier. Revenue for the three months ended Dec. 31 was $140.2 million, up from $75.7 million in the year-earlier period.
Why China Rapid Finance Limited’s (NYSE:XRF) Ownership Structure Is Important (Simply Wall St News), Rated: AAA
I am going to take a deep dive into China Rapid Finance Limited’s (NYSE:XRF) most recent ownership structure, not a frequent subject of discussion among individual investors. When it comes to ownership structure of a company, the impact has been observed in both the long-and short-term performance of shares. The same amount of capital coming from an activist institution and a passive mutual fund has different implications on corporate governance, which is a decisive factor for a long-term investor. It also impacts the trading environment of company shares, which is more of a concern for short-term investors. Therefore, I will take a look at XRF’s shareholders in more detail.
In XRF’s case, institutional ownership stands at 18.79%, significant enough to cause considerable price moves in the case of large institutional transactions, especially when there is a low level of public shares available on the market to trade.
Another important group of shareholders are company insiders. Insider ownership has to do more with how the company is managed and less to do with the direct impact of the magnitude of shares trading on the market.
General Public Ownership
The general public holds a substantial 42.76% stake in XRF, making it a highly popular stock among retail investors.
Private Equity Ownership
Private equity firms hold a 16.12% stake in XRF.
Private Company Ownership
Potential investors in XRF should also look at another important group of investors: private companies, with a stake of 5.44%, who are primarily invested because of strategic and capital gain interests.
China toughens supervision on third party payment (xinhuane), Rated: B
Agricultural Bank of China announced in a recent notice that it would cut off the payment channel for Internet finance businesses such as peer-to-peer lending, the Xinhua-run Economic Information Daily reported.
The move followed a series of penalties levied at banks and online payment companies, which analysts said were aimed at curbing risks arising from direct clearance agreements between them.
Danish online lender basisbank to implement Fico Blaze Advisor (Finextra), Rated: B
With FICO Blaze Advisor decision rules management system, Basisbank risk analysts will be able to quickly make changes to credit strategies for unsecured consumer loans and point-of-sale financing in order to increase profitability and reduce the risk of loans going unpaid. Basisbank receives more than 75 percent of its credit applications from mobile devices.
How digital banks are raising the bar for customer experience (Tearsheet), Rated: AAA
Challenger bank N26 raised $160 million in Series C funding this week to fuel its expansion to the U.S., and other markets, later this year. Revolut, another U.K. challenger, has been planning a U.S. launch this year too and Monzo is rumored to follow.
Digital-only challenger banks have changed customer expectations, including customer service and how customers want to use financial products. Big banks are taking notice, with companies developing sub-brands to hook younger, digital-savvy customers or others — the most recent of which is rumored to be the Royal Bank of Scotland.
For Monzo, which just crossed 500,000 current account holders, the absence of physical branches doesn’t mean a lack of interaction with customers. Monzo’s approach is to release early versions of products to a group of customers and get customer feedback from within the app and through an online forum. It’s an approach that gives customers a sense of ownership and excitement about the brand. For Monzo’s marketplace beta, it sought out feedback from 3,000 customers.
Digital payments player paytm wants slice of P2P lending (The Economic Times), Rated:AAA
Paytm, the country’s largest digital payments company, is trying to enter the lending space and is seeking a licence from RBI to become a peer-to-peer lending platform.
According to documents sourced by ET from the Ministry of Corporate Affairs, the company moved a board resolution on February 7 saying it intends to “carry on the business of non-banking financial company — peer-to-peer”.