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Tuesday April 24 2018, Daily News Digest

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United States

SoFi Becomes More Like a Bank without Becoming a Bank (Crowdfund Insider) Rated: AAA

During the Cagney period, SoFi was promoted as an anti-bank solution for retail customer needs. The Fintech acquired a digital only challenger bank, Zenbanx, while initiating the process to provide banking services by applying for industrial loan charter (ILC).

A few months later, Zenbanx was shut down and eventually Cagney departed SoFi and the ILC process was halted.

Today, SoFi is pushing further into bank like services with SoFi Money, a mobile first challenger bank like platform minus the banking charter.

Cities Where Credit Card Debt Has Increased and Decreased the Most (CompareCards), Rated: AAA

The U.S. economy is in a good place, growing at a healthy rate of nearly 3% annually, and the unemployment rate is around 4%. So it’s perhaps surprising that credit card balances are growing in 20 of the 30 largest U.S. metros while declining in nine with one city unchanged.

The changes in credit card balances range from a 9% increase in Miami to a 6% drop in San Francisco.

Miami led the 30 largest metros by far with a 9% annual increase. Pittsburgh was No. 2 at a nearly 6% rise with New York and Chicago both just above 5%.

Average credit card balances range from $7,276 in Washington, D.C. to $5,114 in Riverside, Calif.

Cities with the largest average credit card balance decreases

30. San Francisco — credit card balances declined 6%.

29. Dallas — credit card balances down 5%.

28. Baltimore — credit balances drop by 5%.

credit card balances

Fintech business lenders evolving (Banking Exchange) Rated: AAA

While the merits of the proposed fintech national banking charter continue to be debated in Washington, online nonbank business lenders haven’t been circling in a holding pattern over Reagan National Airport.

Case in point: The business of lending isn’t lending, but getting paid back, said Andrea Gellert, chief revenue officer at OnDeck, the largest online small business lender in the U.S.

Pros and cons of alternative data

One of the criticisms of traditional credit bureaus is that they have typically relied on backward-looking, historical data. One of the elements of fintech lenders has been use of alternative indicators intended to give a glimpse of the future.

“Alternative data sources have been proven to work to predict credit,” said Luke Voiles, director at QuickBooks Capital, which lends to users of Quicken’s accounting software. (Currently the company caps loans as $50,000.) The input the firm can access provides a strong picture of how a business is doing and may be doing in the future. Gellert said that as loans grow larger, OnDeck adds in methodologies derived from behavioral economics.

Why Marketplace Lending Needs Less Transparency, Not More (PYMNTS) Rated: AAA

Marketplace lending platforms — Lending Club, OnDeck, Prosper and the like — have inarguably and fundamentally altered the geography of the lending landscape.  In the last decade, they’ve gone from being a niche product to representing about a third of unsecured consumer loan volume in the United States as of 2016, according to a recent study by Harvard Business School Professor Boris Vallée and University of Washington Professor Yao Zeng.

The really savvy investors, the study noted, aren’t merely savvy because of the knowledge they possess — but because of the technology they leverage. One popular such technology is LendingRobot’s quantitative modeling that takes in the historical data provided by the platforms and uses it to create rules of purchase — and then allows its user set it to literally auto-invest whenever it encounters a loan that meets the rules’ criteria.

Looking at a swath of loans executed by LendingRobot users between January 2014 and January 2017, with a particular focus on $120 million invested in LendingClub and Prosper during that time period, what they found is that those who used LendingRobot bought much better loans — the average default rate for LendingRobot purchases was 20 percent lower than the average default rate on the platform.

What other banks can learn from BB&T’s glitch (American Banker) Rated: A

In February, BB&T Chief Executive Kelly King took to Twitter with a video apology to thousands of irate customers after an equipment malfunction hobbled ATMs, online and mobile banking. “We are committed to making this right,” he said.

On Thursday, during the Winston-Salem, N.C.-based bank’s quarterly earnings call, King revealed the bottom-line cost of the high-profile, three-day system outage: $15 million in lost revenue and an additional $5 million in noninterest expenses tied to fee waivers and other costs.

Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud (The New York Times) Rated: A

Zelle, a service that allows bank customers to instantly send money to their acquaintances, is booming. Thousands of new users sign up every day. Some $75 billion zoomed through Zelle’s network last year. That’s more than twice the amount of money that customers transferred with Venmo, a rival money-transfer app.

But the same features that make Zelle so useful for customers, its speed and ubiquity, have made it irresistible to thieves. Hackers and con artists have used the system to steal from victims — some of whom had never used Zelle or even heard of it until someone used it to clean out their bank accounts.

Steve Polsky of Juvo (Lend Academy) Rated: A

In this podcast you will learn:

  • How Steve’s diverse background as an entrepreneur helped in the launch of Juvo.
  • What Juvo does exactly and what problem they are trying to solve.
  • How Juvo is able to extend credit in tiny amounts to prepaid phone customers.
  • Who Juvo partners with to reach these people.
  • What Juvo brings to the table for the mobile operators.
  • The geographies they have focused on.
  • Why their website leads with “Identity Changes Everything”.
  • How they are verifying identity and approving these people with no credit file.
  • How the mechanics work in getting credit to these people.
  • Why the major value proposition is one of convenience.
  • How they are mitigating against fraud.
  • Why they don’t charge the consumer interest or any fees.
  • Why the big opportunity is moving people up to other financial services.
  • The scale they are at today.
  • What the partnership with Samsung means for Juvo.
  • How the information and data on these people will end up being so valuable.
  • What is next for Juvo.

Boiler Rooms Are Not Brands, Kabbage CEO Says (DeBanked) Rated: A

Speaking at LendIt Fintech 2018 Kabbage CEO Rob Frohwein talked about building a brand in the online lending space; he explained most companies think boiler rooms equal brands, he went on to say you need to spend time and money on building your company’s brand; building relationships is the key, not just credit scores and data, you need to understand what your customer wants and needs by engaging with them on a regular basis.

Only Half of Americans Feel Like Banks Can Help Their Financial Progress (Business Wire) Rated: A

When it comes to getting a loan or credit card from their bank, many Americans are not so confident. A newly released study from Elevate’s Center for the New Middle Class (CNMC) found that non-prime Americans – the 2/3rds of US adults with credit scores under 700 – were significantly less likely to depend on a traditional financial institution for access to credit. Compared to individuals with prime credit scores, non-prime Americans are:

  • 4x as likely to have been denied a loan over the last year
  • 8x as likely to not use a bank
  • 6x as likely to use an online-only financial institution
  • 21% less likely to believe their financial institution has products designed for them
  • 48% less likely to believe they would be approved for a personal loan

The non-prime are often characterized by income volatility, making it all the more necessary they have access to credit. Yet, one in 12 non-prime Americans do not even use a traditional bank for their day-to-day needs. Non-prime Americans often move to an online only bank to meet this void.

Blockchain to Help Millennials Get their Foot on the Housing Ladder (CoinSpeaker) Rated: A

Representatives of the so-called millennial generation are approaching their mid-thirties, being the single largest segment of home buyers in America. This, undoubtedly, represents a huge opportunity for the mortgage industry.

Couple this with the fact that the American housing market (which currently stands at $26 trillion) is the largest asset class in the world – even bigger than the U.S. stock market – and it’s clear  that there is certainly a huge wealth of opportunity within this sector.

Teachers take out more loans than anyone else (Thinknum Media) Rated: AAA

When we solved for job titles, we discovered that teachers take out the most Lending Club loans with 47,761 loans issued. “Manager” and “Owner” follow, but as you’ll see in the chart below, teacher reappears (with a lower-case “t”) with another 8,777 loans issued.

Jobs with the most loans applied for
Source Thinknum Media

This chart shows average monthly income for the teachers requesting loans. It’s widely beleived that teachers aren’t paid as well as they should be.

average monthly income for the teachers
Source: Thinknum Media

Reasons Stellar (XLM) Bulls Will Beat The Bears (Crypto Gazette) Rated: B

Daijo is yet another decentralized P2P lending platform built atop the Stellar blockchain. The Demo version for Daijo mobile app is currently available and running, with the full version expected to be released in a couple of weeks, however QIN tokens are available for presale.

The QIN token is Daijo’s very own multi-purpose asset. QIN will be used for basically everything on the platform, from rewards, to loan requests, to repay of loans. Daijo presents a little update to existing lending platform, with this, our arms are crossed to see how Daijo and the QIN tokens would perform on the big stage.

Harvest Properties and Cerberus Capital Management Acquire DC Station in Daly City, California (Markets Insider) Rated: B

Harvest Properties, a full service commercial real estate investment, development, and management firm (“Harvest”) and an affiliate of Cerberus Capital Management, L.P. (“Cerberus”), a global leader in alternative investing, announced today that they have acquired DC Station, an office property located in Daly City, California. The Leadership in Energy and Environmental Design (LEED) Silver certified project is comprised of a nine-story, multi-tenant office building totaling approximately 383,000 square feet.

Why you should search for direct lenders for online loans (Baltimore Post Examiner) Rated: B

Borrowing online has a number of major benefits, from quick approval – as the online lender can tell you more or less instantly if you’re either approved or not – to lower interest rates (if any) and easier approval because they always use alternative information to evaluate your credit worthiness. You can find information about all types of loans, but make sure you search for it in the right places. For example, expert online loan lenders like Credit Cube provide a review of all types of loans and they make sure you choose a loan that satisfies your requests. For now, let’s see what the differences between the main types of lenders are!

United Kingdom

Finastra’s Blockchain-Based Solution Fusion LenderComm Goes Live (Crowdfund Insider), Rated: AAA

UK fintech Finastra announced on Tuesday its blockchain-based solution, Fusion LenderComm, is now commercially available as an app on R3’s Corda platform for financial institutions operating in the syndicated lending market. The launch was announced at the LSTA Operations Conference in New York. Finastra reported that following a pilot, the solution is proven to streamline information exchange between agent banks and lenders, driving transparency and efficiency in the syndicated loan market. 

Fusion LenderComm is now available as a “low-cost” service for financial services institutions acting as agent banks, using Fusion Loan IQ, a syndicated loan servicing platform. However, the Fusion LenderComm platform is an open utility for all institutions involved in syndicated lending, regardless of the loan servicing software in use. 

Landbay reaches Women in Finance targets (Peer2Peer Finance News) Rated: A

LANDBAY has achieved the targets set last year as part of its commitment to the Treasury’s Women in Finance Charter.

The buy-to-let specialist has confirmed that there is now a minimum of one female representative on every interview panel. It has also drafted a formal maternity and paternity leave plan for all employees.

The peer-to-peer lender’s third target was to ensure that for any additions to executive management or the board of directors, at least one woman must be shortlisted. However, there have been no vacancies at an executive and non-executive level since this promise was made in 2017.

Assetz Capital Joins Positive Lending Panel (Crowdfund Insider) Rated: A

UK-based peer-to-peer lending platform Assetz Capital announced last week it has joined the panel of mortgage packager specialist Positive Lending. This news comes just days after the online lender reached a record number of loans available to investors using its Manual Lending Account (MLA), with well over 200 live loans with loan parts available for immediate investment on the secondary market.

Growth Street joins FCA Register as an Appointed Representative, launches P2P investment opportunity for individuals (Growth Street) Rated: B

Growth Street, an alternative banking service provider for SMEs, announced today that it is now listed as an Appointed Representative (AR) on the Financial Conduct Authority’s (FCA) Financial Services Register. Formerly a peer to peer (P2P) platform purely for incorporated businesses to lend and borrow from each other, this new status allows Growth Street to accept individuals as investors on the platform. By expanding the range of investors, Growth Street aspires to provide more businesses with a GrowthLine, its business overdraft alternative.

Commercial financial partnership launched (The Business Desk) Rated: B

The Business Catalyst Club has agreed a deal with commercial finance brokers ABL Business to create Business Catalyst Finance.

The partnership will provide access to a range of funding options such as commercial property finance, business loans and venture capital along with alternative finance opportunities like asset-based lending and peer-to-peer lending.

European Union

Loans from Linked Finance pass the €50m mark (Independent) Rated: AAA

Loans from Linked Finance to Irish small and medium enterprises (SMEs) have passed the €50m mark.

The milestone co-insides with the Irish peer-to-peer lending platform celebrating five years in business.

ID Finance R&D joins Eastern European tech elite at Belarus’ Hi-Tech Park (ID Finance) Rated: B

ID Finance, the emerging markets fintech company, has been accepted into the Belarus Hi-Tech Park (HTP) in Minsk as it seeks to strengthen its R&D team and take advantage of the favourable business environment on offer to technology companies.

International

 

YayProto ICO (YFN Token): Blockchain Money Transfer System? (Bitcoin Exchange Guide) Rated: A

Billions of dollars are transferred every day and people, collectively, lose out on millions in inefficient systems and high transaction fees. There is a lack of transparency and accountability in the system. Another big problem in the major global financial organizations is that more than 3.5 billion (50% of global population) are still unbanked.

A solution to these problems is a crowd-based banking system that secures its customer’s funds by blockchain technology.

Australia

Robo-advice platform Clover.com.au has entered an agreement to provide proprietary online financial advice and wealth management technology to private wealth firm, Collins House.

Clover chief executive officer and co-founder, Sahil Kaura, said the platform would algorithmically assess information provided by customers to determine if a managed discretionary account (MDA) service was appropriate on a case-by-case basis.

India

Indian lending platform Capital Float raises $ 22M Series C extension from Amazon (Tech Crunch) Rated: AAA

Capital Float, the fintech startup that says it is India’s largest online lender, announced today that it has raised $22 million in new funding from Amazon. At the end of last year, reports surfaced that Amazon was considering an investment in Capital Float as an extension of its $45 million Series C, which was announced last August. The Bangalore-based startup confirmed to TechCrunch that Amazon’s investment is indeed an extension of that round and brings the total equity it has raised over the past 12 months to $67 million.

Over the same period, Capital Float  also raised $80 million of debt from banks and other financial companies, which it combines with its own balance sheet to finance loans to small businesses and other borrowers. Amazon India is among several e-commerce platforms that the company has partnered with to provide loans to sellers, including Snapdeal and Shopclues.

Four NBFCs empowering MSME sector (The Siasat Daily) Rated: A

In this regard, here are four NBFCs that can be explored by and SME and MSME players for financial assistance:

  • Lendingkart-This is a non-deposit taking NBFC, providing SME lending in India.
  • Aye Finance-It is a commercial institution built around the mission to solve these challenges of funding MSMEs and enabling their inclusion into the mainstream of the economy.
  • Faircent-Faircent, a P2P platform has been facilitating loans for number of businesses across the country. Its tech-enabled backbone makes the entire process and hassle free.
  • InCred-It is a new-age financial services group that aspires to be the one stop shop for the customers to fund their financial needs.

Authors:

George Popescu
George Popescu
Allen Taylor
Allen Taylor

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