- Today’s main news: Ron Suber joins MoneyLion board. Prosper reports full year results. Orca launches P2P investment platform. Santander, Ripple partner on money transfer app. Cash Suvidha raises $1M. China opens payment market to foreign companies.
- Today’s main analysis: The cost of bankruptcy.
- Today’s thought-provoking articles: LendingTree studies the cost of bankruptcy. Liwwa creates big impact in MENA. The lowdown on synthetic identity fraud. Digital lending venture success secrets.
- Ron Suber joins MoneyLion board. AT: “This is a great match. Suber brings a ton of experience and knowledge of the industry to a company with a lot of great growth potential.”
- Prosper reports full year results. AT: “Prosper is looking better. Loan originations are up, net loss is down.”
- Citigroup to open nationwide digital bank. AT: “More competition is good.”
- The cost of bankruptcy. “Mortgage borrowers with scores between 720 and 739 three years after bankruptcy were offered similar APRs to those without bankruptcy, indicating a strong credit score can counteract the effects of a prior bankruptcy.”
- More on Marcus. AT: “Not much new for regular readers.”
- Interview with Blinker’s Rod Buscher. AT: “Lend Academy podcast.”
- Synthetic identity fraud. AT: “An excellent read with case studies.”
- Candex raises $3.5M.
- Hawaii has highest average debt-to-income ratio.
- How transparency can help a fund position itself for growth.
- Orca launches P2P investment platform. AT: “A great addition to the P2P ecosystem.”
- OakNorth is expanding and will eventually launch in China.
- IFISAs generate market-beating returns.
- Santander to launch international money transfer app with Ripple. AT: “Ripple keeps making small strides toward mainstream acceptance. Here is another one.”
- Peoples Trust Company selects Finastra for end-to-end lending solution.
- FintruX raises $25M.
- Cash Suvidha raises $1M.
- State Bank of India to create blockchain-based exchange for non-performing assets.
- Digital lending venture success secrets.
- United States
- Ron Suber Joins Board of Fintech MoneyLion (Crowdfund Insider), Rated: AAA
- Prosper Reports Full Year Results (Business Wire), Rated: AAA
- Citigroup to Again Be a Nationwide Bank, but in Digital Form (Wall Street Journal), Rated: AAA
- LendingTree Study: The Cost of Bankruptcy (PR Newswire), Rated: AAA
- With Marcus, Goldman Sachs takes on consumer banking (Bankrate), Rated: A
- Rod Buscher of Blinker (Lend Academy), Rated: A
- Synthetic Identity Fraud: The Perfect Crime (Lendit), Rated: AAA
- Candex Raises $ 3.5M in Seed Funding (Finsmes), Rated: A
- Hawaii is state with highest average debt-to-income ratio, study says (Pacific Business News), Rated: A
- Transparency Can Help Position a Fund for Growth (Lendit), Rated: A
- United Kingdom
- Orca Launches Investment Platform to Drive Mainstream Adoption of P2P Investing (Crowdfund Insider), Rated: AAA
- UK digital bank that beat peers to an annual profit ‘will go into’ China — eventually (CNBC), Rated: A
- Look to the Innovative Finance Isa for market-beating returns on your tax- free savings (City a.m.), Rated: A
- China opens its payments market to foreign companies (The Paypers), Rated: AAA
- European Union
- Banco BNI Europa launches online account opening system through videoconference (Fintech Finance), Rated: AAA
- Santander is set to launch an international money transfer app with Ripple (Business Insider), Rated: AAA
- Peoples Trust Company selects Finastra to fulfill end-to-end lending vision (PR Newswire), Rated: A
- FintruX raises $ 25 million in their token sale to build P2P lending platform for small businesses and startups (Tech Startups), Rated: A
- Lending platform Cash Suvidha raises $ 1 million in pre-series A (Financial Express), Rated: AAA
- SBI To Create Blockchain-Based Exchange For Recovering NPA’s (Inc42), Rated: A
- Digital lending venture success secrets for the new-age CIOs (CIOL), Rated: AAA
- Facing regulatory bar at home, QARASoft robo adviser heads overseas (Korean Herald), Rated: A
- Continuous learning for SME executives (The Star Online), Rated: B
- Creating big impact with a small help (Khaleej Times), Rated: AAA
Ron Suber Joins Board of Fintech MoneyLion (Crowdfund Insider), Rated: AAA
Ron Suber, President Emeritus of Prosper and a prominent Fintech advocate, has joined the board of directors of MoneyLion.
Prosper Reports Full Year Results (Business Wire), Rated: AAA
Prosper today reported full year results for 2017. Loan originations and transaction fee revenue were up 31% and 37% year-over-year to $2.9 billion and $130 million, respectively. Prosper also generated cash from operations for three consecutive quarters, starting in Q2 2017.
Summary of Key 2017 Financial Highlights:
- Surpassed $11 billion in cumulative personal loan originations through the platform since inception
- Increased loan originations 31% and transaction fee revenue 37% year-over-year
- Net loss of $115 million included $89 million of non-cash charges related to warrants to purchase preferred stock that were issued to a consortium of investors and a third party in connection with a settlement agreement
- Adjusted EBITDA(1) of $5 million increased $43 million year-over-year
- Generated cash from operations for three consecutive quarters, starting in Q2 2017
- Closed $50 million Series G funding, ending 2017 with approximately $100 million of liquidity
Citigroup to Again Be a Nationwide Bank, but in Digital Form (Wall Street Journal), Rated: AAA
After years of Citigroup Inc. shrinking its U.S. retail banking franchise to focus on affluent customers and a handful of big cities, the global bank is ready to become a national player once again.
This time, however, it doesn’t plan on gobbling up rivals or opening any new branches. Instead, Citigroup says it will use an expanded mobile app to fully serve new customers.
LendingTree Study: The Cost of Bankruptcy (PR Newswire), Rated: AAA
LendingTree today released the findings of its study on the cost of bankruptcy. The findings show that while a prior bankruptcy can make it more expensive to borrow, it’s certainly not impossible to qualify for credit. If borrowers wait to apply for new loans even just a few years after bankruptcy, they may find rates that aren’t too far off from what other borrowers are being offered.
- Forty-three percent of people with a bankruptcy on their credit file have a credit score of 640 or higher within a year of the bankruptcy. Within two years of bankruptcy, 65 percent have a credit score above 640.
- A typical $15,000 auto loan incurs an extra $2,171 in borrowing costs for those seeking offers less than a year after bankruptcy, but just $799 for those who wait at least two years after bankruptcy.
- Borrowers who have a 3-year-old bankruptcy and apply for a mortgage see an offered APR that is 19 basis points higher than those without a bankruptcy. The higher the APR, the higher borrowing costs will be.
- Mortgage borrowers with scores between 720 and 739 three years after bankruptcy were offered similar APRs to those without bankruptcy, indicating a strong credit score can counteract the effects of a prior bankruptcy.
With Marcus, Goldman Sachs takes on consumer banking (Bankrate), Rated: A
Despite becoming a bank holding company, Goldman’s business remained focused on corporations and the wealthy. That changed a few years ago as it began plotting new strategies, says Omer Ismail, chief commercial officer for Marcus. The Wall Street Journal recently published an in-depth account of the creation of Marcus, including juicy tidbits like conversations over lunch in the Hamptons.
Goldman decided to tackle the unsecured personal loan space first.
Marcus has found its particular angle in making its loans highly customizable. Rather than setting traditional loan terms, like three years or five years, it asks you how much you can afford to pay each month in addition to asking you how much you need to borrow. So, you might end up with a 31-month installment loan, which is not a conventional loan term.
Rod Buscher of Blinker (Lend Academy), Rated: A
In this podcast you will learn:
- How Rod first made a name for himself in the car business.
- The idea behind Blinker and why Rod decided to start the company.
- How the buying and selling process works at Blinker.
- The patents they have received to help identify any car in the U.S.
- How they are able to make a safe environment for conducting a car transaction.
- The percentage of car buyers at Blinker who opt for financing instead of paying cash.
- How their financing process works.
- The limits on the kinds of cars they finance.
- The data they are using to make an underwriting decision.
- The spectrum of the different credit profiles of their car buyers.
- How they are getting the word out to find these buyers and sellers.
- How they are funding their loans today.
- Their move into auto refinancing and how they have built this business.
- How they approach licensing in the states they operate.
- The total number of transactions that have taken place on Blinker to date.
- The other services they are providing to Blinker customers.
- Rod’s vision for the future of Blinker.
Synthetic Identity Fraud: The Perfect Crime (Lendit), Rated: AAA
Synthetic identity fraud usually involves creating an entirely new identity composed of information with no ties to a known consumer. This identity is then used to apply for credit and services. Synthetic identities are one of the most difficult fraud threats institutions face today and their prevalence has exploded over the past several years. Synthetic identity fraud is arguably the perfect crime because there is no consumer victim.
Put yourself in the shoes of a fraudster. As you consider your many nefarious options for committing a crime and getting away with it, you decide that the best crime is one where there is no clear victim. Sure, robbing a bank using a synthetic identity victimizes the enterprise, its shareholders, its employees and taxes its customers. However, no one individual is intentionally, directly hurt. Therefore, the non-existent victim does not alert authorities and the fact that a crime has been committed is lost to history. There is a “credit loss” and the debtholder is impossible to locate. The debt is written off, or sold, and the fraud is perpetuated yet again. Like I said, the perfect crime.
Candex Raises $ 3.5M in Seed Funding (Finsmes), Rated: A
Candex, a San Francisco, CA-based fintech startup, raised $3.5m in seed funding.
Backers included Edenred Capital Partners, Partech Ventures, Advisors.Fund, Camp One Ventures, NFX, Tekton Ventures, Big Sur Ventures and fintech angel Mark Goines.
Hawaii is state with highest average debt-to-income ratio, study says (Pacific Business News), Rated: A
The average borrower in Hawaii spends 36.2 percent of their monthly paycheck on credit card, student loan, and housing payments, according to a study by Credible.com, making Hawaii the state with the highest average debt-to-income ratio.
According to the online lender marketplace, the average monthly credit card payment for a Hawaii resident is $238, the average monthly student loan payment is $385, and the average monthly housing payment is $1,091, for a total of $1,714.
With average annual income in Hawaii at $56,889, the state’s average debt-to-income ratio is 43 percent more than residents of Michigan, the state with the lowest debt-to-income ratio.
On average, Michigan residents in the dataset spent 25.3 percent of their monthly income on credit card, student loan and housing payments.
Nationwide, the study found the average American in the dataset paid $207 on credit card debt, $370 on student loans and $906 on housing each month, while taking home an average salary of $60,671.
Transparency Can Help Position a Fund for Growth (Lendit), Rated: A
When fund managers choose experienced service providers, including custodians, auditors, accountants, attorneys and administrators, they can increase transparency in the fund, which can in turn promote investor confidence. Service providers can be much more than just an added expense; they can be valuable partners that can help position the fund for success.
Orca Launches Investment Platform to Drive Mainstream Adoption of P2P Investing (Crowdfund Insider), Rated: AAA
Orca, an independent data, research and analysis provider targeting the the UK peer-to-peer (P2P) lending market, has launched its premier investment platform. The new platform will allow investors to easily diversify across multiple P2P lending platforms from a single P2P investment portfolio.
Orca seeks to provide their new service to the retail investor market.
Total cumulative lending is £13 billion since the asset class was created in 2005. Orca’s secondary service, Orca Analytics, has 2016 to 2017 growth at 18%, with £4 billion lent in 2017 alone. The estimated customer-base stands at approximately 200,000-250,000 retail investors.
The Orca Investment Platform Features include exposure to both consumer, business and property lenders. Investors may expect a return of 5% net of Orca’s cut which is a 0.65% fee.
UK digital bank that beat peers to an annual profit ‘will go into’ China — eventually (CNBC), Rated: A
OakNorth, a start-up bank based in London, recorded a pre-tax profit of £10.6 million ($15 million) in 2017 and is considered to be the first U.K. digital-orientated bank to reach such a milestone.
Khosla said his firm is already in “open conversations” with multiple countries about its global expansion plans, including the U.S., Canada, Spain, Italy, Germany, Singapore, South Africa and Australia. The company has already established offices in some of those countries, he added.
OakNorth is expanding abroad by licensing its technology platform, ACORN, to banks in other countries. The platform uses big data and machine learning to optimize credit for small-to-medium sized enterprises (SMEs).
OakNorth offers loans between £500 and £30 million to SMEs. It was granted a banking license by U.K. regulators in 2015.
‘No firm views’ on IPO
OakNorth is currently valued at $1.4 billion, which puts it in the ranks of the U.K.’s “unicorn” companies — firms valued at $1 billion or more.
It raised a total of £244 million last year in a combination of investments — the “largest U.K. fintech financing to date,” according CEO Khosla. Singaporean sovereign wealth fund GIC took a 10 percent equity stake in the firm.
Look to the Innovative Finance Isa for market-beating returns on your tax- free savings (City a.m.), Rated: A
IFISAs are also a way for investors to do something interesting with their savings. For example, Oaksmore has recently launched an Isa which allows investors to capitalise on historic renovation.
This particular IFISA, specialising in historical building renovation, offers a tax-free return of up to 7.5 per cent each year.
Another lender trying to do some- thing different is Folk2Folk, a peer-to- peer platform for rural and local businesses. It is offering an IFISA which gives lenders the opportunity to earn 6.5 per cent interest a year, while supporting British businesses within their local area.
China opens its payments market to foreign companies (The Paypers), Rated: AAA
China has decided to open up its payments market, allowing companies to apply for a payments license.
The People’s Bank of China said in a statement that foreign players who apply for payment licenses will receive the same treatment as local companies.
Applicants must set up local units, establish payment infrastructure — including disaster recovery systems — and store client information domestically, the central bank added.
Banco BNI Europa launches online account opening system through videoconference (Fintech Finance), Rated: AAA
Banco BNI Europa launched an online account opening process through videoconference. This new process also introduces an innovative system of documents signature with a qualified digital certificate and is available for Portuguese citizens who want to open an individual current account. The process is simple, fast and intuitive, without the usual bureaucracies associated with account opening.
This product is offered in partnership with DigitalSign, a Portuguese Certifying Entity specialized in the issuance of qualified digital certificates, registered in the National Security Office as an accredited entity. The partnership with Digital Sign allows, in addition to the online account opening, the issue of a digital certificate, with similar strength to a physical signature, which may be used by the client in the context of other contractual relations with the Bank.
Santander is set to launch an international money transfer app with Ripple (Business Insider), Rated: AAA
Santander is on track to launch an international money transfer app in partnership with fintech startup Ripple in the next few months, the bank’s UK CEO has confirmed.
Nathan Bostock told the International Fintech conference in London on Thursday: “This spring, if not one beats us to it, we will be the first large retail bank to carry out cross-border payments at scale with blockchain technology.”
Peoples Trust Company selects Finastra to fulfill end-to-end lending vision (PR Newswire), Rated: A
Peoples Trust Company of Saint Albans has selected Finastra to provide a single, end-to-end lending solution for commercial and consumer lending. Using Finastra’s Total Lending solution, which packages the power of the Fusion LaserPro, Fusion DecisionPro and Fusion CreditQuest products, the bank will be able to manage its lending process from origination through to booking and thus increase efficiency and customer service.
FintruX raises $ 25 million in their token sale to build P2P lending platform for small businesses and startups (Tech Startups), Rated: A
FintruXNetwork is a global P2P lending blockchain-based ecosystem, powered by Ethereum. FintruX Network aims to connect borrowers, lenders, and rated service agencies. FintruX facilitates marketplace lending in a true peer-to-peer network to ease the cash-flow issues of small businesses and startups. The startup announced today it has successfully raised over 22,000 ETH ($25 million) in token sale from contributors around the world. The proceeds of the sale will be used to build an Ethereum-based platform that will fundamentally enhance the P2P loan experience for small businesses and startups.
Lending platform Cash Suvidha raises $ 1 million in pre-series A (Financial Express), Rated: AAA
Delhi-based fintech startup, Cash Suvidha, has raised $1 million in its pre-series A round of investment from Initia Holdings Ltd., Vipin Agarwal, Partner in India Industrial Growth Fund and others. The company plans to use the newly secured funds to increase customer base and to further strengthen its technological infrastructure.
The company claims to receive 15,000 loan applications every month and disbursement of loans in another 2 working days. The company has raised a total of $5.2 million and claims to have disbursed over Rs 152 crore.
Further, Cash Suvidha has disbursed loans to over 35,000 borrowers with an average ticket size between Rs 20,000 – Rs 5,00,000.
SBI To Create Blockchain-Based Exchange For Recovering NPA’s (Inc42), Rated: A
Reportedly, India’s largest public sector bank, State Bank of India is looking to create a blockchain-based exchange for Non-Performing Assets (NPA’s).
To be launched in association with 30 banks, this platform will assist the banks in data-driven price discovery.
SBI is said to have assets over $460 Bn and offers services in areas such as retail, corporate banking, financing, and insurance. The Indian banks are said to have to battle with NPA’s worth $210 Bn of which $30 Bn resides with SBI alone.
Digital lending venture success secrets for the new-age CIOs (CIOL), Rated: AAA
Broadly, there are three types of software systems that enterprises employ. These include:
a)Systems that help in running a business process
b)Those that help companies to grow their businesses
c)Systems that transform businesses
In the year 2013, China reported an eight-fold rise in the total number of borrowers that touched 1,49,300. The growth continued through 2014, with total borrowers reaching 630,000 by the year’s end.
Traditionally, lenders considered credit score as the key parameter in defining a borrower’s creditworthiness. In case of digital lending, a borrower’s risk profile is defined based on aspects such as Aadhaar for identification, salary slips for working professionals, and the applicant’s financial behavioral patterns determined based on information curated from online sources such as social media channels.
Boston Consulting Group estimates that by 2020, 48% of India’s internet users will be rural and of that, 21% will be women.
Facing regulatory bar at home, QARASoft robo adviser heads overseas (Korean Herald), Rated: A
QARASoft’s now-defunct platform, called “QARA,” connected individual asset managers with funds pooled — or borrowed — from peer-to-peer investors, in part by making use of the venture firm’s artificial intelligence-powered robo adviser.
The “decentralized” platform collected some 100 retail investor loans in the first two weeks. But they were retrieved after the Financial Supervisory Service banned its operation, despite a patent earned the previous year for the pooling scheme of the fund and the platform’s three-year operation of its beta version.
The service will primarily target retail investors in overseas markets in the United States, the United Kingdom and Singapore, and the English version will be launched prior to a Korean version.
Continuous learning for SME executives (The Star Online), Rated: B
SMALL business executives who took part in the AmBank BizRACE gained a new perspective in managing their operations, allowing them to bring the business further.
The top 15 finalists in the programme recently completed two, out of four, executive development programmes at Menara AmBank.
Peoplender Sdn Bhd chief executive officer Kristine Ng, a participant in the programme, said she was inspired with a new structure for her business after the first day itself. Ng recalled one of the trainers talking about constraints that one would face in growing businesses – if it doesn’t fit the business model, then change must occur.
Creating big impact with a small help (Khaleej Times), Rated: AAA
According to the World Bank, 63 per cent of Mena SMEs do not have access to capital.
In Jordan, SMEs represent 97 per cent of companies and create 70 per cent of new jobs in the kingdom, according to Oxford Business Group, Jordan: Finding Financing for SMEs.
Liwwa is a peer-to-peer lending platform in the Mena region that provides SMEs with trade and asset financing. Liwwa’s target audience is divided into borrowers and investors, also referred to as lenders. To date, liwwa has maintained a solid portfolio and delivered annual returns of 10.6 per cent.
The liwwa index delivered 9.45 per cent over the last 12 months, which is attractive.
Liwwa has raised $5.55 million from investors and $6 million in debt to date. Their investors include Silicon Badia, Bank Al Etihad, DASH Ventures and Mena Venture Investments. Their debt partners include Bank Al Etihad, Capital Bank, Arab Bank and the Dutch Good Growth Fund.