- Today’s main news: SoFi launches SoFi Money. Robinhood in talks with regulators about bank products. Orca Money plans to double in size this year. Monzo, TransferWise partner. Banco BNI Europa drops 50M Euro into Linked Finance.
- Today’s main analysis: FREED 2018-1 Deep Dive.
- Today’s thought-provoking articles: What financial service firms can learn from direct-to-consumer companies. Graduate degrees with the highest debt-to-income ratio. Alternative lending unicorns. How FINT is changing lending in Nigeria.
- SoFi launches SoFi Money. Long anticipated, it’s finally here, with 20 times higher interest than the average bank checking account.
- Yield curve and FREED 2018-1. This is an awesome read, with the best charts of the day.
- Robinhood is discussing bank products with regulators. This looks like the new way for fintech companies of all stripes to compete. While most of the companies researching banking services have yet to pull the trigger, I think it’s only a matter of time before we start to see new banking models that consumers are ready to test beyond toes dipping in the water. Robinhood could be one of them.
- What financial services firms can learn from direct-to-consumer companies. A very good read.
- Grad degrees with the highest debt-to-income ratios. A real, deep look. Very interesting.
- KeyBank acquires Bolstr.
- Capital One co-founder joins LendUp board.
- Orca Money wants to double in size this year.
- P2PFA accused of reducing transparency.
- Royal London Asset Management warns investors about P2P lending pension investing.
- How Ayo Adesina invests in P2P lending.
- BWB Compliance recruits P2p lending advisor.
- Monzo partners with TransferWise. This looks like an awesome partnership.
- Linked Finance secures 50 million Euro from Banco BNI Europa.
- Bitcoin lending has arrived.
- Top alternative lenders who made the Fintech 50 list.
- Fintech and insurtech unicorns. Out of 34 unicorns, at least 12 of them are involved in alternative lending, credit, or digital banking.
- ETHLend adds MyBit token.
- China: FinUp Finance Technology to go public in Hong Kong.
- China: PINTEC launches installment financing.
- India: PaisaDukan to open two new branches
- Australia: RateSetter makes a new hire.
- Korea: P2P lending bills still pending.
- Southeast Asia: 86% of banks are developing open banking initiatives.
- Africa: FINT is changing lending in Nigeria.
- United States
- SoFi’s Latest Product Called “SoFi Money” is Here (Lend Academy) Rated: AAA
- Continued Yield Curve Flattening, FREED 2018-1 Deep Dive (PeerIQ), Rated: AAA
- Robinhood is said to discuss bank products with regulators (American Banker) Rated: AAA
- KeyBank Acquires Digital Lending Platform For Small Businesses Bolstr (Crowdfund Insider) Rated: A
- Capital One Co-Founder Is Making a Bet on Risky Borrowers (Bloomberg) Rated: A
- What Financial Services Can Learn from Direct-to-Consumer Companies (Crowdfund Insider) Rated: AAA
- Which Graduate Degrees Deliver More Debt than Income? (Credible) Rated: AAA
- United Kingdom
- Scottish fintech Orca Money hopes to double in size (Insider), Rated: AAA
- P2PFA accused of reducing transparency after loanbook changes (Peer2Peer Finance) Rated: A
- Asset management giant warns on ‘exotic’ peer-to-peer lending pension investing (AltFi News) Rated: A
- How I invest: Ayo Adesina, a software engineer with £32,000 in peer-to-peer (iNews), Rated: A
- Who’s switching jobs at BWB Compliance (City A.M.), Rated: B
- Online lender seeks small-scale borrowers (The Standard) Rated: AAA
- Chinese Fintech PINTEC Launches Installment Financing on E-Commerce Platforms (Crowdfund Insider) Rated: A
- European Union
- Monzo partners with TransferWise for international payments (TechCrunch) Rated: AAA
- LINKED FINANCE SECURES €50M FUNDING FOR IRISH SMES FROM BANCO BNI EUROPA (Irish Tech News) Rated: AAA
- HAVE YOUR CAKE AND ‘HODL’ TOO: TAKING OUT A LOAN WITH BITCOIN (Bitcoinist), Rated: A
- The FinTech50 2018 (The FinTech 50) Rated: B
- 34 Fintech and Insurtech Unicorns (Inside Bitcoins), Rated: AAA
- ETHLend Blockchain Lending Platform Adds MyBit Token (MYB) in Partnership (Bitcoin Exchange Guide) Rated: B
- RateSetter to ‘accelerate’ broker strategy with new appointment (The Adviser) Rated: A
- P2P lending marketplace ‘PaisaDukan’ to open branches in Noida and Bangalore (Knowledge & News Network) Rated: AAA
- Bills on P2P lending, cryptocurrency pending in National Assembly (The Korea Herald) Rated: AAA
- Open Banking: no leisurely walk in the DX park (Enterprise Innovation) Rated: A
- FINT is changing the narratives in the Nigerian lending space (Nairametrics), Rated: AAA
SoFi’s Latest Product Called “SoFi Money” is Here (Lend Academy) Rated: AAA
At time of writing, SoFi is paying 1.1% on their account which is a competitive rate when you consider that it is a hybrid account. Other banks who continuously offer the highest rates available on the market such as Goldman Sachs’ Marcus are currently paying around 1.7% on savings accounts. The largest banks in the US such as Bank of America, Citi and JP Morgan Chase pay between 0.01% and 0.1% on savings accounts which varies depending on deposit amounts and current promotions.
Continued Yield Curve Flattening, FREED 2018-1 Deep Dive (PeerIQ), Rated: AAA
The yield curve continued its unrelenting flattening after last week’s Fed meeting. The spread between 10-year and 2-year treasury yields now stands at 36 bps (about 1 to 2 rate hikes from inversion). An inverted yield curve and lower-long term yields have presaged economic slowdown or recessions in the past. You can read our analysis of the Fed’s interest rate decision here.
FREED 2018-1 Deep Dive
FREED 2018-1’s collateral pool consists of 2 types of loans – 61.6% Freedom Plus (F+) and 38.4% Consolidation Plus (C+).
F+ Loans: F+ loans are unsecured consumer loans to near prime and prime borrowers. F+ collateral has a WA age of 8 months and WA remaining term of 41 months. The WA current FICO score of the pool is 723 and the WA interest rate is 14.8%.
C+ Loans: C+ loans are offered to select qualified debt settlement clients as an option to shorten the duration of their debt settlement program by making funds immediately available to fund settlements reached by Freedom Debt Relief. C+ collateral has a WA age of 8 months and WA remaining term of 44 months. The WA current FICO score of the pool is 654 and the WA interest rate is 22.9%.
There’s plenty more. See the rest of the charts here.
Robinhood is said to discuss bank products with regulators (American Banker) Rated: AAA
Robinhood Markets has more than 4 million U.S. consumers using its free stock-trading platform. Now, it’s in talks to offer them other banking services like savings accounts, according to people familiar with the matter.
KeyBank Acquires Digital Lending Platform For Small Businesses Bolstr (Crowdfund Insider) Rated: A
On Wednesday, KeyBank announced it has acquired digital lending platform for small businesses Bolstr. According to Key, the fintech software, which is expected to be implemented later this year, will enable the banking group to provide faster and easier access both to SBA loans and to traditional capital for business owners. The acquisition comes just after the OCC recently called on banks to issue more SME loans.
Capital One Co-Founder Is Making a Bet on Risky Borrowers (Bloomberg) Rated: A
The co-founder of Capital One Financial Corp. is betting now’s a good time to lend to the riskiest borrowers.
Nigel Morris, Richard Fairbank’s partner in creating the company that became Capital One, is joining the board of LendUp Global Inc. and boosting his investment in the firm, which uses machine learning to look beyond traditional credit scores in the subprime market.
What Financial Services Can Learn from Direct-to-Consumer Companies (Crowdfund Insider) Rated: AAA
A 2016 Bain study found that nearly a third of customers globally would change their bank if they could do so easily. With dissatisfaction that high, traditional financial institutions should look to emulate the branding strategies of direct-to-consumer retailers, rather than leaning on their well-established names, to engage with millennial and Gen Z consumers.
Research from BCG found that brands that create personalized customer experiences with technology and data can increase revenue by six to ten percent, and direct-to-consumer brands have capitalized on the benefits of personalization.
Many fintech companies’ value proposition is to leverage technology to provide less expensive financial advice, lower interest rates on student loans, or more fair and reflective insurance rates. For example, robo-advisor Betterment charges only 25 basis points for wealth management services and no minimum to enroll, as opposed to traditional financial advisors that charge one to two percent on assets under management and often require high minimum investments to qualify for on-boarding.
A recent PricewaterhouseCoopers study found that 75 percent of bank customers base their purchasing decisions on whether or not they’ve had a positive customer experience at the bank.
Which Graduate Degrees Deliver More Debt than Income? (Credible) Rated: AAA
Credible’s analysis of student loan debt levels and salaries across 16 graduate school majors shows that the most important consideration isn’t how much debt you’ll take on to obtain an advanced degree — or how much you’ll earn after graduation — but achieving the right balance between the two.
Scottish fintech Orca Money hopes to double in size (Insider), Rated: AAA
Scottish fintech firm Orca Money hopes to double its staff to ten over the next year following its second funding round.
The Edinburgh-based company raised £280,000 seed capital last January and is now talking to investors about follow-on funding.
P2PFA accused of reducing transparency after loanbook changes (Peer2Peer Finance) Rated: A
THE PEER-TO-PEER Finance Association (P2PFA) has been accused of reducing transparency and hindering efforts to enhance investor protection after changing the rules governing how firms publish their loanbook.
Previously, members of the self-regulated trade body were obliged to publish their full loanbook, showing information about all the loans on their platform.
But at the start of June, the P2PFA announced that members now have the option to “either continue to publish their entire loan book, or provide a detailed breakdown of loans in their overall loan book to enable a consumer to be informed about the nature and number of loans of different descriptions presently originated through the platform according to standards to be approved by the P2PFA board.”
Asset management giant warns on ‘exotic’ peer-to-peer lending pension investing (AltFi News) Rated: A
Pension investors should avoid high yielding assets such as peer-to-peer loans, according to new research by UK-based Royal London Asset Management.
The firm, which manages £114bn of assets, says investors looking generate income in retirement should beware for high risk, higher yielding investments.
Online lender seeks small-scale borrowers (The Standard) Rated: AAA
China’s FinUp Finance Technology Group, which operates a technology-enabled finance platform with a focus on marketplace lending, aims to widen its market in the country by going public in Hong Kong.
The fintech firm also provides a variety of other personal credit services including point of sale instalment services to automobile financing services.
Chinese Fintech PINTEC Launches Installment Financing on E-Commerce Platforms (Crowdfund Insider) Rated: A
Chinese fintech Pintec Technology Holdings Limited (PINTEC) announced on Wednesday it has launched installment financing on its e-commerce platforms. This news comes just a couple of weeks after PINTEC secured $103 million through its latest financing round, which as led by Mandra Capital and SINA Corp.
Monzo partners with TransferWise for international payments (TechCrunch) Rated: AAA
The partnership, which TechCrunch outed nearly three weeks ago, will see TransferWise power international payments for the U.K. challenger bank’s 750,000 customers. It is the second new bank partnership that TransferWise has unveiled this month, after the fintech unicorn announced that it has begun working with France’s second largest bank BPCE Groupe.
Asked why Monzo has chosen to work with TransferWise, Blomfield reiterates the challenger bank’s goal of becoming a “hub or control centre” for your money. This won’t necessarily all be done by Monzo, he says, “but with partner organisations who plug into this hub”. TransferWise is the first of these.
LINKED FINANCE SECURES €50M FUNDING FOR IRISH SMES FROM BANCO BNI EUROPA (Irish Tech News) Rated: AAA
Linked Finance, Ireland’s leading peer-to-peer (P2P) lending platform, has secured backing from Portugal’s fastest growing digital bank, Banco BNI Europa, who will deploy up to €50m over a 2-year period, to lend to Irish SMEs.
As part of a wider strategy to identify the best P2P lending platforms in key European markets, Banco BNI Europa will deploy its capital alongside Linked Finance’s existing lenders. Linked Finance, connects Irish SMEs who need loans with an online lending community of more than 19,000 users.
HAVE YOUR CAKE AND ‘HODL’ TOO: TAKING OUT A LOAN WITH BITCOIN (Bitcoinist), Rated: A
P2P lending platform InLock wants to change this by enabling cryptocurrency to be used as collateral for a loan in fiat — effectively solving the short-term spendability problem. At the same time, borrowers can remain ‘hodlers‘ with the option to get their cryptocurrency back in full after the loan is paid off, regardless of any changes in price.
Csaba: When we looked at the Bitcoin blockchain, we found that 40% of all bitcoins existing today had not been moved at all in the past year. Looking back at 2017, there were plenty of reasons to move them: hard forks, the mempool crisis, regulation problems, an amazing bull run, followed by a 70% correction.
The FinTech50 2018 (The FinTech 50) Rated: B
- Starling Bank
34 Fintech and Insurtech Unicorns (Inside Bitcoins), Rated: AAA
According to data compiled from CB Insights and Crunchbase, they are currently 34 fintech unicorns, or startups valued at over $1 billion.
32. Funding Circle — $1 billion
Value: $1 billion | Raised: $413 million
Founded: 2009 | | HQ: London
What it does: Peer-to-peer marketplace for business loans.
Why it’s hot:Over £3 billion has been lent across the platform and the company is tipped for a blockbuster European float later this year.
31. Kabbage — $1 billion
Value: $1 billion | Raised: $500 million
Founded: 2009 | | HQ: Atlanta
What it does: Fast online small business loans.
Why it’s hot: The company has written over $4 billion-worth of loans and has partnered with Spanish bank Santander.
24. ACORN OakNorth — $1.2 billion
Value: $1.2 billion | Raised: $486 million
What it does: A fintech firm focused on unlocking the potential in bespoke SME lending globally using its data and technology platform, ACORN machine.
Why it’s hot: ACORN machine is a fintech platform that helps automate the way banks penetrate this underserved and underestimated market. It does this by leveraging process excellence, machine learning and technology to fuel data-driven decision making across the loan lifecycle.
22. Tuandaiwang — $1.46 billion
Value: $1.46 billion | Raised: $380 million
Founded: 2012 | HQ: Dongguan
What it does: Peer-to-peer lending platform.
Why it’s hot: The company has helped individuals and companies borrow $11.4 billion and helped lenders make $335 million in returns.
17. NuBank — $2 billion
Value: $2 billion | Raised: $527 million
What it does: Brazilian app-only bank.
Why it’s hot: The bank has 3 million customers and has raised money from Sequoia Capital, Goldman Sachs, Tiger Global, and more.
16. Affirm — $2 billion
Value: $2 billion | Raised: $720 million
What it does: A hire-purchase provider, letting people buy products and pay them off in installments.
Why it’s hot: The company works with over 1,200 retailers in the US and its technology helps retailers increase average order sizes by 51%. Morgan Stanley and Singapore’s GIC are both investors.
15. Avant — $2 billion
Value: $2 billion | Raised: $1.8 billion
What it does: Online personal loans.
Why it’s hot: The company has lent over $1 billion and is backed by the likes of Tiger Global, KKR, and Jefferies.
13. Klarna — $2.5 billion
Value: $2.5 billion | Raised: $636 million
What it does: User-friendly payment systems for mobile and web that lets people buy now and pay later.
Why it’s hot: The company processes 800,000 transactions a day and has been used by 60 million people globally. Sequoia Capital, the Silicon Valley fund that backed PayPal, is an investor.
9. GreenSky — $3.6 billion
Value: $3.6 billion | Raised: $350 million
What it does: Provides technology to banks that is used in processing loan applications.
Why it’s hot: Steven McLaughlin, a former Goldman Sachs banker whose firm advised GreenSky on a funding deal, told Bloomberg in 2016 that GreenSky “is the single best fintech company created in the last 10 years, by far.”
8. Credit Karma — $3.5 billion
Value: $3.5 billion | Raised: $868 million
What it does: Provides free online credit reports, offsetting the cost of paying for them with targeted advertising of financial products.
Why it’s hot: Over 75 million people in the US and Canada have used the service. Google Capital is an investor.
7. SoFi — $4 billion
Value: $4 billion | Raised: $2.1 billion
What it does: Peer-to-peer student loan refinancing, mortgages, and other types of personal loans.
Why it’s hot: Like Zenefits, SoFi struggled with a slew of setbacks in 2017. Allegations of sexual misconduct and loan misstatements forced out founder Mike Cagney. Former Twitter CFO and ex-Goldman banker Anthony Noto is now leading a turnaround of the business.
3. Lu.com — $18.5 billion
Value: $18.5 billion | Raised: $1.7 billion
Founded: 2011 | HQ: Shanghai
What it does: Chinese peer-to-peer loans and financing platform.
Why it’s hot:, also known as Lufax, is one of China’s largest online lenders and is tipped for an IPO this year.
ETHLend Blockchain Lending Platform Adds MyBit Token (MYB) in Partnership (Bitcoin Exchange Guide) Rated: B
MyBit is an Ethereum-powered ecosystem that aims to connect the global Internet of Things (IoT) industry. ETHLend works with the Ethereum blockchain as well and is a marketplace for peer-to-peer lending services that use smart contracts. The company provides low interest rates and a transparent technology for processing transactions.
Currently, it allows users to lend with Ethereum, but it may be ready to introduce new altcoins at the end of this year, including MYB.
RateSetter to ‘accelerate’ broker strategy with new appointment (The Adviser) Rated: A
Last week, The Adviser broke the story that Mark Woolnough had left his role at ING after 18 years at the lender to join the fintech RateSetter.
It has now been confirmed by RateSetter that Mr Woolnough has joined its ranks as head of third-party distribution.
P2P lending marketplace ‘PaisaDukan’ to open branches in Noida and Bangalore (Knowledge & News Network) Rated: AAA
PaisaDukan, a P2P lending platform fully owned by Mumbai based fintech startup BigWin Infotech, has decided to launch 2 branches in Noida & Bangalore as a part of its PAN India expansion and growth plans by the end of next month.
This will enable the company to have better control over their operations and widen its reach.
Bills on P2P lending, cryptocurrency pending in National Assembly (The Korea Herald) Rated: AAA
Rep. Min Byung-doo of the ruling Democratic Party and Rep. Kim Su-min of the minor opposition Bareunmirae Party filed two separate bills to regulate P2P lending firms in July last year and in February, respectively.
With the bills still pending in the National Assembly, financial authorities have been struggling to tackle abusive and deceptive P2P lending practices.
Open Banking: no leisurely walk in the DX park (Enterprise Innovation) Rated: A
The 2018 Global Payments Insight Survey: Retail Banking report by ACI Worldwide and OVUM claimed that 86% of banks in Asia are developing their open banking strategy.
Ovum’s 2017 Payments Insight Survey said 87% of surveyed banks report having a clear strategy for developing open APIs, up from 59% in 2017.
FINT is changing the narratives in the Nigerian lending space (Nairametrics), Rated: AAA
In a recent report by the International Finance Corporation (IFC) and the Central Bank of Nigeria (CBN), less than a third of MSMEs have successfully obtained loans from financial institutions, and that is not for a lack of trying.
Nigeria currently has over 35 million MSMEs and if approximately only 10 million MSMEs have been able to get loans from financial institutions, hence, a credit gap of about 25 million in the country.
What exactly is FINT?
FINT is an online lending marketplace, basically we connect verifiable income borrowers looking for access to affordable credit with lenders who are looking to fund the loans for attractive returns. We have consumer loans i.e. loans between N60,000 and N2 million at rates as low as 8% for 3 – 12 months, with retail and institutional lenders (banks and asset managers).
For lenders, they can lend in the multiples of N20,000 grows at 26-39% for one-year loan tenures, for 6 months 15-22% for 3 months it is 8-14%.