- Today’s main news: FDIC opens comments on Special Purpose National Bank charters. Plaid raises $250M. P2PFA member lending exceeds 10B GBP. ThinCats raise 200M GBP. Bondora originates almost 8M euro in loans in November. Klarna joins Shopify Plus Partner Program. Nubank launches debit card.
- Today’s main analysis: Trends in credit card debt.
- Today’s thought-provoking articles: Consumer credit market poised for 2019 growth. Single women own more homes than single men. How subprime personal loans will fare under Trump. Payday lending woes in Australia.
- FDIC seeks comments on fintech bank charters. The Trump Administration may have just opened the door wide for OCC bank charters. They want to encourage more bank startups, which is good if they are the right bank startups. More of the same won’t cut it.
- Plaid raises $250 million at $2.65 billion valuation. Congratulations!
- Consumer credit market poised for more growth in 2019. This is welcome news, but how will this play against a recession if pundits’ predictions for an economic slump play out?
- Trends in credit card debt. From Wallet Hub, some excellent insight into credit card debt. Some great charts showing the trends.
- Subprime personal loans are expected to flourish in 2019. Unsecured personal debt is on the rise.
- Cities with highest, lowest credit card debt.
- Single women own more homes than single men.
- Large banks service few mortgages.
- How underwriters view mortgage lending.
- Galaxy Digital leads $30 million funding round for Good Money. Crypto lending is in.
- Investors’ Harbour launche new real estate fund.
- Bloqboard launches new feature for lenders.
- Wyre, bZx partner on decentralized margin lending.
- P2PFA member lending exceeds 10 billion GBP. Excellent milestone. It should continue to go higher.
- ThinCats raises 200 million GBP. Congratulations.
- iwoca partners with Barclay, HSBC on open banking.
- Tide has 1% of SME banking market.
- Challenger banks are more appealing than traditional banks for employees.
- Sancus tightens credit processes.
- OakNorth to launch operation in Manchester.
- Starling Bank dds Onedox to marketplace.
- Bondora originates almost 8 million euro in loans in November. Congratulations. Another great achievement.
- LendIt Fintech Europe 2018 slide presentations.
- Spotcap increases credit lines.
- YouHodler tops the crypto lending market.
- Alt finance is vital to SMEs.
- Brazil: Nubank launches debit card.
- Australia: Payday loan applicants asked to hand over bank account passwords.
- Indonesia: 400 online lending sites shut down.
- South Korea: Toss raises $80 million.
- China Lending intros B2B supply chain financing.
- Singapore: Points helps the unbanked with the blockchain.
- Africa: Experian to acquire Compuscan.
- China: The best and worst of fintech.
- Indonesia: Authorities asked to expose identities of violating online loan services.
- United States
- FDIC Embraces FinTech (PeerIQ), Rated: AAA
- Fintech startup Plaid raises $ 250M at a $ 2.65B valuation (TechCrunch), Rated: AAA
- U.S. Consumer Credit Market Poised for More Growth in 2019 (TransUnion), Rated: AAA
- Credit Card Debt Study: Trends & Insights (Wallet Hub), Rated: AAA
- 2019’s Cities with the Highest & Lowest Credit Card Debts (Wallet Hub), Rated: A
- A Different Kind of Gender Gap: Homeownership Is More Common Among Single Women Than Single Men (LendingTree), Rated: AAA
- OCC sees sharp drop in mortgages serviced by large banks (American Banker), Rated: A
- How Do Underwriters View Mortgage Lending? (Progress in Lending), Rated: A
- Subprime personal loans will flourish in 2019 thanks to startups and Donald Trump (Quartz), Rated: AAA
- Galaxy Digital Leads $ 30 Million Funding for Social-Crypto Startup Good Money (CoinDesk), Rated: A
- Half of Americans think using sharing services is risky (Biz Journals), Rated: A
- Investors’ Harbour Launches New Fund That Will Finance the Development of Hawaii’s Newest Master-Planned Community (Investors’ Harbour), Rated: B
- Dharma-based Crypto Lending Platform Bloqboard Launches New Feature to Empower Lenders (Crypto Coin Spy), Rated: B
- Wyre partners with bZx, the protocol that powers decentralized margin lending (Cryptoninjas), Rated: B
- United Kingdom
- P2PFA member lending exceeds £10bn (P2P Finance News), Rated: AAA
- Peer-to-peer platform ThinCats secures £200m funding deal (AltFi), Rated: AAA
- Iwoca adds Barclays and HSBC to Open Banking connections (Finextra), Rated: A
- Tide accounts for 1 per cent of UK’s SME banking market (AltFi), Rated: A
- UK recruiters say challenger banks and fintech businesses are now more appealing to candidates than traditional banks (Onrec), Rated: A
- Sancus tightens credit processes amid no-deal Brexit fears (P2P Finance News), Rated: A
- OakNorth to launch lending operation in Manchester as demand for its SME loans in the North of England continues to rise (Fintech Finance), Rated: B
- Starling Bank Adds Onedox to Its Marketplace (coverageR), Rated: B
- China Lending Expands B2B Offerings With Supply Chain Service (PYMNTS), Rated: AAA
- Best/Worst Bets In Chinese Fintech (Seeking Alpha), Rated: A
- European Union
- P2P Lender Bondora Reports Almost €8 Million in Originations for November (Crowdfund Insider), Rated: AAA
- LendIt Fintech Europe 2018 Slide Presentations Now Live (LendIt.com), Rated: A
- Spotcap increases credit lines to EUR 300M (Spotcap email), Rated: A
- YouHodler – Top Crypto Lending Platform on the Market (NewsBTC), Rated: A
- Alternative finance ‘becoming vital’ for SMEs in north (The Irish News), Rated: A
- Klarna Joins Shopify Plus Partner Program To Power High-Growth Merchants (PR Newswire), Rated: AAA
- Cred Opens Crypto Corporate Lending Platform To Developers (PYMNTS), Rated: A
- Payday loan applicants asked to hand over bank passwords, inquiry hears (The Guardian), Rated: AAA
- 400 Online Lending Sites, Fintech Platforms Being Shut Down (Tempo.co), Rated: AAA
- LBH Urged to Expose Identities of Violating Online Loan Services (Tempo.co), Rated: B
- South Korea is getting its first fintech unicorn (Business Insider), Rated: A
- How these Amazon and Xiaomi alums are helping the unbanked with blockchain (Tech in Asia), Rated: A
- Latin America
- Brazilian Fintech Nubank Launches Debit Card To Reach 120M Clients (Forbes), Rated: AAA
- Experian to acquire African credit info firm Compuscan for $ 263m (Fintech Futures), Rated: AAA
FDIC Embraces FinTech (PeerIQ), Rated: AAA
Formation of new banks post-crisis is historically low. More banks have failed since 2009 than have new banks opened.This trend could leave some communities severely underbanked.
The FDIC wants to encourage new banks to startup and wants innovative FinTech firms to be part of that process. The agency wants to streamline its application process and is seeking comments on how that can be done.
The OCC’s Special Purpose National Bank (SPNB) charter allows FinTechs to operate as banks.
Fintech startup Plaid raises $ 250M at a $ 2.65B valuation (TechCrunch), Rated: AAA
The company is today announcing a $250 million Series C investment led by famed venture capitalist and the author of the Internet Trends reportMary Meeker, who will join its board of directors as part of the deal. The funds were raised at a valuation of $2.65 billion, according to sources close to the company. Capital from Meeker’s investment came from Kleiner Perkins’ growth fund — where Meeker has been a partner since 2010 — not from the reported billion-dollar-plus solo fund she’s in the process of raising.
U.S. Consumer Credit Market Poised for More Growth in 2019 (TransUnion), Rated: AAA
Low unemployment rates and continued positive growth in both GDP and real disposable income are among the key drivers that will propel the U.S. consumer credit market in 2019. Partly due to the strong performance of these economic indicators, TransUnion’s (NYSE: TRU) 2019 consumer credit forecast found that originations and consumer balances are expected to increase for most credit products, while serious delinquency rates will likely decline or remain steady.
A few outliers in the forecast come by way of serious credit card delinquency rates and originations as well as mortgage originations. Credit card delinquency rates are expected to rise from 1.94% in Q4 2018 to 2.04% in Q4 2019 as a shift toward more non-prime consumers with access to credit cards will likely negatively impact originations and consequently the serious delinquency rate.
TransUnion Forecast: Top Consumer Credit Trends for ‘19
Trend #1: There’s Room for Growth in Personal Loans
Personal loans continue to display signs of strength, and total balances are expected to climb 20% to an all-time high of 156.3 billion by the end of 2019.
Trend #2: Affordability May Impact the Auto Industry
It’s also worth noting that the number of auto loan originations is expected to end 2018 at 28.5 million and grow to 29.4 million in 2019. This is a significant increase from recent years (27.5 million in 2017, 28.3 million in 2016, 28.0 million in 2015). This growth is expected to be driven from both ends of the risk spectrum. Yet as the growth continues, the serious delinquency rate is anticipated to remain muted, ticking up to 1.44% in Q4 2019, an increase from the expected 1.43% in Q4 2018 and the 1.43% mark observed in Q4 2017.
Trend #3: Homes Becoming More Expensive, but Home Equity Increases Could Be a Boon to Consumers
Mortgage originations have declined the past several quarters, a trend that is expected to continue into 2019. Rising interest rates, increasing home prices, and supply constraints are driving lower origination numbers. Average balances will continue to trend upward in 2019, growing from an anticipated $208,831 at the end of Q4 of this year to $218,490 by the end of Q4 2019, a 4.6% increase.
Trend #4: More Near Prime Consumers will Carry a Credit Card
Near prime consumers are expected to increase their origination share to 19.1% in 2019, up from 18.3% in 2018.
Credit Card Debt Study: Trends & Insights (Wallet Hub), Rated: AAA
Americans repaid $40.8 billion in credit card debt during Q1 2018 – the second-largest quarterly payoff ever. But we added almost $38 billion back to our tab in Q3 and Q2 2018. We also began the year owing more than $1 trillion in credit card debt for the first time ever, after adding $87.3 billion to our tab in 2017.
The $38 billion in credit card debt added during Q2 and Q3 2018 has nearly wiped out consumers’ large first quarter pay-down.
We ended 2017 with $87.3 billion in new credit card debt, and WalletHub projects a $70 billion increase in 2018 by the end of the year.
2019’s Cities with the Highest & Lowest Credit Card Debts (Wallet Hub), Rated: A
A Different Kind of Gender Gap: Homeownership Is More Common Among Single Women Than Single Men (LendingTree), Rated: AAA
- Single women own considerably more homes than single men do. On average, single women own around 22% of homes, while single men own less than 13% of homes.
- Oklahoma City was the metropolitan area where single men own the largest share of owner-occupied homes, at 16%. Even though single men own a greater proportion of homes in Oklahoma City than they do elsewhere in the country, they still own fewer homes than single women, who own 24% of residential properties in the area.
- New Orleans was the metropolitan area where single women own the largest share of owner-occupied homes. In this area, single women own nearly twice as many homes than single men do: 27% compared with 15%.
P2PFA member lending exceeds £10bn (P2P Finance News), Rated: AAA
PEER-TO-PEER Finance Association (P2PFA) platforms have cumulatively lent out more than £10bn, according to the trade body’s latest data.
Peer-to-peer platform ThinCats secures £200m funding deal (AltFi), Rated: AAA
The money comes from BAE Systems Pensions and is the second significant loan funding deal struck by ThinCats in the last few months.
Iwoca adds Barclays and HSBC to Open Banking connections (Finextra), Rated: A
iwoca, the UK’s fastest growing small business lender, today announces it has connected to Barclays and HSBC banks under Open Banking.
Tide accounts for 1 per cent of UK’s SME banking market (AltFi), Rated: A
Digital business bank Tide has reached 56,000 SME customers, accounting for one per cent the UK’s 5.6m SMEs. The bank has more than doubled the number of customers using its services in the last 12 months.
UK recruiters say challenger banks and fintech businesses are now more appealing to candidates than traditional banks (Onrec), Rated: A
- 55% of recruiters and HR managers have seen an increase in hiring rates over the last five years
- Half of UK recruiters and HR managers have seen an increase in demand for AI, cryptocurrency and blockchain skills
- 55% say the number of roles requiring these emerging tech skills has outstripped the number of available candidates
- 32% of recruiters say traditional banks are the least appealing FS organisations to candidates, whilst cryptocurrency businesses are top
Sancus tightens credit processes amid no-deal Brexit fears (P2P Finance News), Rated: A
SANCUS BMS has prepared itself for a no-deal Brexit and tightened its credit processes to protect itself from a market slowdown, its chief executive has said.
Starling Bank Adds Onedox to Its Marketplace (coverageR), Rated: B
Founded in 2015 with £1m in funding, Onedox helps people manage household bills and expenses by allowing them to connect their different accounts including gas, electric, internet, mobile, and insurance. The service – which is free of charge – allows users to stay on top of their bills while receiving personalized recommendations for saving money by switching to new providers.
China Lending Expands B2B Offerings With Supply Chain Service (PYMNTS), Rated: AAA
China Lending Corporation has announced the launch of its new supply chain financing services, which include a business factoring program.
In addition, China Lending has acquired 98.04 percent equity interest in Hangzhou Zeshi Investment Partners, which will enable China Lending to launch its new supply chain financing services in the near future, including financing products design, related corporate financing solutions, investments and asset management, and more.
Best/Worst Bets In Chinese Fintech (Seeking Alpha), Rated: A
China’s financial technology, or fintech, sector, has suffered this year due to a slowing economy and stricter financial regulation. In the peer to peer lending sector, hundreds of firms have shut down due to inability to comply with regulations or insolvency. So, what can we expect from this industry in the near future?
P2P Lender Bondora Reports Almost €8 Million in Originations for November (Crowdfund Insider), Rated: AAA
Peer to peer lending platform Bondora says loan originations almost hit €8 million during the month of November. This follows a record-breaking month of October
In November, Bondora issued €7,894,070 of new loans, just ahead of the record set for originations in the previous month of €7,802,163.
LendIt Fintech Europe 2018 Slide Presentations Now Live (LendIt.com), Rated: A
Thanks to everyone who joined us at LendIt Fintech Europe 2018. Below you will find all of the presentations from the event. You can also view the photos from LendIt Fintech Europe 2018.
- Joel Perlman, OakNorth Holdings – The OakNorth Growth Story – from Startup to Profitable Unicorn
- June Ou, Figure – Blockchain: Creating the Future of Financial Services
- John Goodall, Landbay – Misconceptions of the UK Buy-to-Let Market Today
Get the full schedule here.
Spotcap increases credit lines to EUR 300M (Spotcap email), Rated: A
It’s been a busy and rewarding 12 months for us here at Spotcap as well: by year-end, we will have issued nearly EUR 300 million in credit lines to businesses in our five markets.
YouHodler – Top Crypto Lending Platform on the Market (NewsBTC), Rated: A
YouHodler is a crypto-backed loan service provider. This established blockchain platform allows users to acquire loans instantly, by leveraging their cryptocurrencies for EUR or USD.
The company offers the highest loan-to-value ratio in the entire industry – up to 80%. And, unlike its competitors, it accepts five of the top cryptocurrencies as collateral, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ripple. Short-term loans are available at a low interest rate of just 2.5%.
Alternative finance ‘becoming vital’ for SMEs in north (The Irish News), Rated: A
THE ability for small businesses in Northern Ireland to access alternative forms of finance has become a vital factor in their successful growth, the head of a Belfast accountancy firm insists.
Since the financial crash and credit crunch, the funding void left by traditional lenders has been filled by boutique funders and alternative finance, which can allow SMEs to access finance for a variety of different needs, from long term investment through to funding for short term working capital.
Klarna Joins Shopify Plus Partner Program To Power High-Growth Merchants (PR Newswire), Rated: AAA
Klarna announced today that they are among the first payment service providers to join the Shopify Plus Technology Partner Program, focusing on high-growth and high-volume merchants. This integration will allow merchants in Germany, the UK and the US to easily implement Klarna’s smoooth payment suite and offer a superior customer experience and thereby unlock additional growth potential.
Cred Opens Crypto Corporate Lending Platform To Developers (PYMNTS), Rated: A
In a press release on Tuesday (Dec. 11), Cred revealed the rollout of its developer platform CredX (not to be confused with the new credit card accounts payable solution recently launched by Finexio). The Crypto-Lending-as-a-Service (CLaaS) solution enables other crypto companies — including exchanges, crypto wallets or mining services — to integrate Cred’s lending functionality into their own solutions. Its set of application program interfaces (APIs) enable businesses to use crypto as collateral to access corporate financing products.
Payday loan applicants asked to hand over bank passwords, inquiry hears (The Guardian), Rated: AAA
A new parliamentary inquiry has begun scrutinising the behaviour of payday lenders, buy-now-pay-later firms, and credit repair agencies.
Vulnerable Australians are agreeing to share their internet banking passwords so payday lenders can see their transaction history before lending them money, an inquiry has heard.
400 Online Lending Sites, Fintech Platforms Being Shut Down (Tempo.co), Rated: AAA
Communication and Informatics (Kominfo) Minister Rudiantara said the ministry had shut down 400 financial technologies (fintech), consisted of sites and applications, related to fraud cases on online loan services that are recently rampant in Indonesia.
LBH Urged to Expose Identities of Violating Online Loan Services (Tempo.co), Rated: B
The Indonesian Fintech Joint Funding Association (AFPI) asked the Jakarta Legal Aid Institute (LBH) to open the identities of 25 peer to peer (P2P) lending organizers or registered online loan services that are said to have made violation.
South Korea is getting its first fintech unicorn (Business Insider), Rated: A
South Korean fintech Toss has raised an $80 million funding round led by US-based firms Kleiner Perkins and Ribbit Capital, with participation from Altos Ventures, Bessemer Venture Partners, PayPal, and Qualcomm Ventures, among others. This brings Toss’ valuation to $1.2 billion, making it the latest fintech unicorn globally, and Korea’s first.
Toss started out offering peer-to-peer (P2P) payments, but has since added other services —including insurance, investments, savings accounts, credit score management, and a financial dashboard that allows users to see all of their finances in one place — by partnering with third parties. Toss already has 10 million registered users, meaning it reaches around 20% of Korea’s population with its services.
How these Amazon and Xiaomi alums are helping the unbanked with blockchain (Tech in Asia), Rated: A
“A lot of the traditional models are not applicable to onboard those people into financial systems,” says Sarah Zhang, co-founder of Singapore-based Points.
That’s where Points – also called PTS – picks up the slack. Founded last year, the blockchain-powered startup uses AI and big data to assess factors like an individual’s occupation, bill payments, and shopping activities to calculate a credit score.
Brazilian Fintech Nubank Launches Debit Card To Reach 120M Clients (Forbes), Rated: AAA
Brazilian fintech Nubank has launched a debit function for its card offering as well as the ability to withdraw cash from ATMs, in a move that aims to extend its reach to as many as 120 million customers.
The startup created in 2013 and valued at over $4 billion has initially offered a no-fee credit card as its key product. Just over a year ago, the company launched a digital bank account, with deposits tied to interest-bearing government securities.
Experian to acquire African credit info firm Compuscan for $ 263m (Fintech Futures), Rated: AAA