- United States
- SoFi launches SoFi Invest and eyes additional lending products (Business Insider), Rated: AAA
- SoFi Now Offering No-Fee Brokerage for Stock and ETF Trades (Think Advisor), Rated: A
- LendingClub forecasts bigger-than-expected first-quarter loss (WSAU), Rated: AAA
- LendingClub Reports 2018 Results and Guidance for 2019 (Lend Academy), Rated: AAA
- Brismo partners with LendingClub to create ‘industry standard’ performance metrics (PR Newswire), Rated: A
- Highest Auto Delinquencies (PeerIQ), Rated: AAA
- Personal Loans May Increase Credit Scores of Most Borrowers (LendingTree), Rated: AAA
- FinTechs Continue to Drive Personal Loan Growth (GlobeNewswire), Rated: AAA
- LoanStreet’s New Commercial Lending Solution Combines Automation and Networking for Financial Institutions (PR Newswire), Rated: A
- Leading Small Business Lending into a Digital and Data Driven Age (LendIt), Rated: A
- How a $ 1.3 Billion Institution Launched Its Own Digital Bank (The Financial Brand), Rated: AAA
- The challenger banks catering to gig-economy workers (American Banker), Rated: AAA
- When Considering Banks, New Survey Finds That Millennials Prefer Technology To Human Touch (Marqeta Email), Rated: A
- Banks Set To Invest In Legacy Systems To Combat Challenger Bank Threat (Fintech Finance), Rated: A
- Atlantic Capital Bank Launches Fintech Partnership with Self Lender (Nasdaq), Rated: A
- Impact of Intelligent Technologies on the Finance Industry (CIO Applications), Rated: A
- Consolidated Analytics Taps Industry Finance Leader Mike Jones as Chief Financial Officer to Facilitate Aggressive Growth and Transformation (PR Newswire), Rated: B
- United Kingdom
- RateSetter Reported ISA Exceeded Expectation in First Year By Attracting £175 Million of Subscriptions (Crowdfund Insider), Rated: AAA
- Zopa’s Latest Report Reveals 1 in 3 Brits in the Dark on Cash ISA Rate (Crowdfund Insider), Rated: AAA
- Is your money safe in an IFISA? (P2P Finance News), Rated: A
- Revolut Launches New Business Mobile App (Crowdfund Insider), Rated: A
- Should bank-style stress tests for P2P lenders reassure investors? (P2P Finance News), Rated: A
- Leasing Foundation to host asset finance technology debates (Verdict), Rated: B
- Strabane firm funding 55 new homes with £7m from peer-to-peer lender (Belfast Telegraph), Rated: B
- China’s online P2P lending industry is undergoing a massive shake out (technode), Rated: AAA
- China’s Recession-Proof Economy Heads to a Stress Test (Bloomberg), Rated: A
- European Union
- European Marketplace Lender October Surpasses €100 Million in Loan Repayment (Crowdfund Insider), Rated: AAA
- Machine learning: Part of Europe’s consumer loans business (AltFi), Rated: A
- 5 Fashion E-commerce Trends Helping Retailers Build a Cult Following (Klarna), Rated: A
- UK-based GBG Acquires IDology in $ 300 Million All-Cash Deal (Finovate), Rated: AAA
- Are Peer-to-Peer Loans (P2P Loans) the Best Option for a Small Business? (ForexTV), Rated: A
- Payday loans increase as households pushed into risky credit from non-bank lenders (ABC.net), Rated: AAA
- 5 of Vietnam’s Top Funded Fintechs (Fintech News), Rated: AAA
- Short Term Loans: For Your Quick Financial Concerns (US Updates), Rated: A
US-based online personal money management startup Social Finance (SoFi) has launched an investment product, dubbed SoFi Invest, offering both active and automated investing options at no fees, while it plans to offer additional lending products, perBloomberg, citing a company letter to investors.
SoFi Invest is already live, but the company aims to further grow and develop its related offerings this year.
According to Bloomberg, which obtained a copy of a letter CEO Anthony Noto wrote investors in the fourth quarter, SoFi Invest had “released an alpha version” of its new brokerage platform inviting employees and select members to “buy and sell individual stocks and ETFs with the tap of a button.” That brokerage platform is now available to anyone using the app, for no fee.
Investors can currently trade only individual stocks and ETFs on the platform; individual bonds and mutual funds are expected to be added in the future.
For the first quarter, the company expects net revenue between $162 million and $172 million, below analysts’ estimates of $181.2 million, according to IBES data from Refinitiv.
LendingClub also forecast a first-quarter loss between $20 million and $15 million, compared to Wall Street estimates of a loss of $5.14 million.
Earnings season is in full swing and today LendingClub announced their results for the 2018 year. The numbers were quite strong in most areas with the company originating $10.9 billion in new loans in 2018, up 21% year over year and a new high water work in yearly originations. For Q4 loan originations were $2.87 billion down slightly from the previous quarter but up 18% year over year.
They lost $128 million in 2018 with a $13 million loss in Q4.
Brismo, the leading international provider of lending performance data, has today announced that standardized performance metrics are available representing the performance of loans made available through LendingClub*.
Lending Performance Analytics
Brismo’s analysis includes a complete historic track record in a format that is free from distortions relating to inconsistent facilitation growth rates or default profiles.
Functions available include:
- Gross facilitation, net lending, change in outstanding principal
- Outbound lending rates and loan term
- Late payments including transition matrices, defaults, recoveries, recovery performance, and net loss
- Historic PDs and LGDs
- Net return, loss coverage and risk adjusted return
- Cohort analysis including return projections
- All analysis can be segmented by facilitator, risk band, asset type etc.
The Fed’s latest report on Household Debt and Credit showed that total household debt increased by $32 Bn (0.2%) to $13.54 Tn in 4Q2018, marking the 18th consecutive quarter of growth. Total debt is now $869 Bn higher than its previous peak, although it remains below its peak on a per-capita basis.
The report also showed that more than 7 Mn auto loans are delinquent for more than 90 days. This is the highest number of seriously delinquent auto loans ever and is driven mainly by subprime borrowers. Over 8% of subprime borrowers are seriously delinquent on their auto loans, but this percentage is still well below its peak of 9.7% seen in 2010.
In FinTech financing news, Nav a small-business lending marketplace, raised $45 Mn from GS Principal Strategic Investments among others. Nav will use the funds to expand its platform and to support more funding partners.
CommonBond, an online student loan refinancer, has raised a $750 Mn credit line from GS, Citi among others. CommonBond will use this credit facility to expand its lending operations.
Americans are increasingly turning to personal loans as another option for their ongoing debt and credit needs. There are many uses for personal loans, and the most prominent are to consolidate existing debt and pay down credit cards, which often carry higher interest rates.
- About 62% of borrowers see their credit scores go up the month after they take out a personal loan.
- After 12 months, around 45% of borrowers still have higher scores than they did in the month of loan origination.
- People with lower scores are more likely to see a credit score bump: 68% of those who started with scores under 620 saw their scores increase in one month, 71% had higher scores after three and six months, and 58% had higher scores after a year.
- People with scores under 620 saw a 20 point, or 3.4%, boost after one month. They also saw a 10 point, or 1.8%, boost after 12 months, on average.
- On the other end of the spectrum, borrowers who started with higher scores are less likely to see a credit score bump. 57% of people with scores of 750 or higher see their scores increase after a month, and about 39% have higher scores after a year.
The FinTech revolution has propelled unsecured personal loans to another record-breaking quarter. TransUnion’s (NYSE: TRU) Q4 2018 Industry Insights Reportfound that personal loan balances increased $21 billion in the last year to close 2018 at a record high of $138 billion. Much of this growth was driven by online loans originated by FinTechs.
FinTech loans now comprise 38% of all unsecured personal loan balances, the largest market share compared to banks, credit unions and traditional finance companies. Five years ago, FinTechs accounted for just 5% of outstanding balances. As a result of FinTech entry to the market, bank balance share decreased to 28% from 40% in 2013, while credit union share has declined from 31% to 21% during this time.
TransUnion also found that FinTechs are competitive with banks, with both lenders issuing loans averaging in the $10,000 range, compared to $5,300 for credit unions. Across all risk tiers and lender types, the average unsecured personal loan debt per borrower was $8,402 as of Q4 2018.
Personal loan originations increased 22% during Q3 2018, marking the fourth consecutive quarter of 20%+ annual origination increases. While the subprime risk tier grew the fastest, prime and above originations (those with a VantageScore 3.0 of 661 or higher) represented 36% of all originations. More than 19 million consumers now have a personal loan product, an increase of two million from a year earlier in Q4 2017 and the highest level ever observed.
LoanStreet Inc., the first fully integrated platform that streamlines the process of sharing, managing and originating loans, now offers a new, powerful commercial loan origination and administration solution for any size financial institution, loan or deal volume. LoanStreet uniquely combines the power of networking financial institutions together with world-class lending technology that automates administrative tasks to drive growth, diversify risk, and enable lenders to better serve their customers.
Small business lending contributed to 24% of the loans originated by US Banks in 2018, accounting for 600 billion last year. Small business lending by large banks remains in legacy mode with deeply entrenched manual processes, a siloed experience and a lack of customization to help meet the unique needs of small business owners.
When IncredibleBank, the online banking division of Wisconsin-based River Valley Bank, made the list of “Top 10 Online Banks” at GoBankingRates.com, it found itself in good company, right alongside Ally Bank, CIT Bank, Discover Bank, and Synchrony.
While not the only community bank on the list, it’s a significant accomplishment for an institution with only $1.3 billion in assets. And equally noteworthy, IncredibleBank is the only digital-first bank offering loans for luxury RVs. These motor coaches — the ones the size of a tour bus with slide-outs that turn them into 1,200 square foot homes — run upwards of $2 million.
Reinsch’s startup, Qwil, focuses on providing working capital for the freelancer who has trouble, like he did, getting paid on time.
Qwil’s underwriting technology assesses the payor’s likelihood of paying. It captures information about the approval status of the invoice: Is it definitively approved, is it likely to be approved or is it simply booked and not approved? It conducts identity verification and fraud checks on each freelancer. Qwil charges a flat fee for the advance, such as 1% of the amount. No interest rate or late fees are charged. And it never goes after the freelancer or small- business person to collect.
Online lenders like OnDeck, Kabbage, Fundbox and Bluevine all look at accounting software data and bank account data to analyze the cash flow of and qualify small business applicants. But the freelancer graphic designer working in a Starbucks or contract copy writer can’t get this type of loan, Ahmed said.
Oxygen’s banking and lending services are bundled into a membership with a flat monthly fee of $29.99.
Ahmed wouldn’t say how many users Oxygen has. The company, which started in a Y Combinator incubator, has been in production since September has been growing users at an 80% monthly rate.
Cogni will offer a checking account and debit card, as well as up to 12% cash back at restaurants and retailers. It will provide “curated financial and lifestyle services” in an app designed for millennials, freelancers and side hustlers.
This month, Joust started a partnership with the Freelancers Union, which has 425,000 members. In a survey, the union found that 71% of its members have trouble getting paid. It also announced an Android version of its app (it had only iOS before).
For a 1% fee it offers a guarantee the payment will be made within 30 days. For a 6% fee it will instantly fund the invoice. Users can also take out PayArmour loans when they are out of work. Eventually Joust plans to provide gap financing for those in-between times.
When Considering Banks, New Survey Finds That Millennials Prefer Technology To Human Touch (Marqeta Email), Rated: A
Millennials are unattached to traditional banks, with only 17% of them expressing firm commitment to their current banking provider, according to new survey data from Marqeta, whose advanced payments infrastructure and open-API platform has pioneered a new standard for modern card issuing. In this research, Millennials (18-34 year olds) were 50% less likely than Baby Boomers (50-65 years old) to say that they couldn’t ever imagine wanting to change their banks.
Marqeta’s research found:
- Only 1-in-6 Millennials said they couldn’t imagine ever wanting to change from their current bank.
- 58% of Millennials would consider banking with Amazon, Facebook or Google if these tech giants enter the banking space.
- 48% of Millennials said they’d consider moving to an independent digital-only bank.
Millennials Are Digital Banking Early Adopters
More than half of Americans aged 18-34 (53%) have used mobile wallets to complete a purchase in-store or on their mobile phone. That’s higher than Americans aged 35-50 (39%) and more than double those aged 51-65 (22%).
It’s also noteworthy that:
- More than half of Millennials (52%) said they were comfortable using TouchID and FaceID to authorize mobile wallet payments — almost double the number of Baby Boomers (29%) who said the same.
- More than twice as many Millennials (57%) than Baby Boomers (27%) said that they have used peer-to-peer banking apps like Square Cash or Venmo.
- Millennials (49%) were twice as likely as Baby Boomers (20%) to pay someone back using a peer-to-peer banking app than a physical currency like cash or check.
Banking Apps Are More Valuable Than Tellers to Millennials
When asked about what the most important service their bank provided was, Millennials reflected much different attitudes than older Americans: Millennials were twice as likely as Baby Boomers to list a mobile app as most important (27% v 14 %), while Baby Boomers were twice as likely to list in person presence (20% v 11%).
Millennials are also abandoning old-fashioned payment methods like checks en masse, with almost half (48%) saying that they couldn’t remember the last time they wrote a check for something other than utilities and rent.
More than three-quarters (80%) of bankers believe challenger banks are an increased threat to their business, while almost one-third (30%) believe they will be the single most disruptive threat in 2019. The survey, commissioned by fintech provider Fraedom, found that in response the challenger bank threat, bankers expect their organisations to invest heavily in updating legacy systems (44%) and new technology (26%) in 2019.
With investing in new technology high on the agenda for commercial banks, the survey found that over half (53%) of respondents believe AI and Machine Learning will be the technologies to have the biggest impact on commercial banking in 2019.
Atlantic Capital (NASDAQ:ACBI) announces its partnership with Self Lender, a leading Fintech company offering consumers a way to build their credit while saving money. Atlantic Capital provides innovative financial technology companies a banking partner that has significant operational expertise and processing scale to meet the demands of a rapidly growing national client base. The Self Lender and Atlantic Capital partnership helps efficiently deliver the credit builder account to thousands of consumers across the United States.
Consolidated Analytics, a one-stop provider of property valuation, asset management, due diligence, fulfillment and advisory services for the real estate finance industry, today announced the appointment of Mike Jones as Chief Financial Officer (CFO). In this role, Jones will be responsible for developing and implementing financial strategies that will support the company’s overarching M&A integration strategy and drive corporate transformation initiatives.
UK-based peer-to-peer lender RateSetter recently announced its ISA has exceeded expectations in its first year, having attracted £175 million of subscriptions, and currently accounts for one-fifth of the platform’s £830 million funds under management. RateSetter unveiled its ISA in February 2018. It allows investments in peer-to-peer loans to be included in a tax-free ISA wrapper up to an investor’s £20,000 annual ISA allowance.
According to Zopa, the research revealed that 1 in 3 British savers (30%) had no idea what interest they’re earning on their Cash ISA and there is a vast difference of knowledge by age with an alarming 42% of people aged between 25 to 44 being in the dark over the rate of interest they were earning on their Cash ISA, in contrast to 21% of over 55s. The research then noted that Generation Z’s were only slightly more aware than Millennials with 39% not knowing their rate of interest.
THE INNOVATIVE Finance ISA (IFISA) is starting to take off after a slow start – in the last tax year, subscriptions rose more than 700 per cent – but potential investors may still be unsure about the risks involved.
Money put into peer-to-peer loans – with or without the IFISA wrapper – is not covered by the Financial Services Compensation Scheme (FSCS).
Digital bank Revolut announced on Tuesday the launch of its new business mobile app. This news comes nearly one year after Revolut debuted its Revolut for Business. Revolut reported that through the mobile app, users may do the following:
- Track corporate card spending in real-time
- View card details and PIN on the go
- Freeze or unfreeze card if it’s misplaced
- Receive instant spending notifications after every card payment
Trade body the Peer-to-Peer Finance Association (P2PFA) requires its platform members to carry out bank-style stress tests on their loan portfolios, but how much confidence should P2P investors have in these models if the cycle turns?
P2PFA member Funding Circle has claimed its loanbook would hold up in a recession, after subjecting itself to the toughest Bank of England stress tests. The P2P business lender has said it could still deliver a three to five per cent return to investors in a downturn.
The first event will feature James Alexander, co-founder of P2P lending company Zopa, as keynote speaker and will take place on 13 March from 8am to 10am at Metro Bank in Holborn, London.
Twenty of the homes will be built in Cookstown, 25 in Coalisland and the remainder in Sion Mills.
The Strabane-based builder secured the funding for the developments from peer-to-peer lender Assetz Capital.
China’s peer-to-peer (P2P) lending industry is in turmoil. In recent months, authorities have ramped up regulatory oversight of the world’s largest P2P lending industry. Investors are losing confidence at their stakes and pulling their funds, diminishing operators’ liquidity; many of them are facing insolvency.
This week, Chinese police froze RMB 10 billion worth of assets owned by over 380 lenders in a large-scale investigation spanning 16 countries. Dubbed Operation Fox Hunt, the investigation has led to the arrest of 62 suspects implicated in P2P fraud since last June.
The total value of the loans managed by online crowdlenders has fallen to RMB 1 trillion. Prior to the clampdown, in 2015, the total P2P loan amount was RMB 1.25 trillion, according to Chinese media (in Chinese).
The reason for the slowdown isn’t clear. Uncertainty over trade with the U.S. — including tariffs, but also export controls and investment restrictions –— could be a factor, especially as other countries show signs of wariness toward Chinese technology companies. Bad investments in real estate and infrastructure could be coming back to bite. A crash in the peer-to-peer lending industry might be contributing.
October, the European lending marketplace formerly known as Lendix, announced on Wednesday it has surpassed €100 million in loan repayment.
The online lender reported that since its launch more than €250 million has been lent to European companies and nearly 40% of this amount has already been paid into the accounts of both individual and institutional lenders through monthly repayments. October then revealed that the lenders have already supported 570 projects for an average amount of €460,000.
Around 70 per cent of financial institutions across the continent say they already use these data technologies to build consumer score cards, which dictate lending, said a survey called, Credit Risk Management 2019 – How Do You Stack Up?
The average coverage rate of non-performing loans in Europe was 46 per cent in 2018, according to the survey.
The deal will give GBG broader reach into the North American market; in a statement, the company said 99% of IDology’s revenues come from the United States.
One of the biggest issues that every entrepreneur will have to face at some point is finding financial backing. Money is going to be essential for your business launch, and there are a variety of methods for obtaining that much-needed financial support. One of the most popular solutions is Peer-to-Peer lending (P2P). This is a useful way of getting the money you need without going through the traditional route of obtaining interest only bank loans. Those banks loans can be slow and expensive, so does P2P offer a viable alternative option? Here’s the rundown of everything you need to know about P2P loans.
Debt-stressed home owners and renters are increasingly turning to alternative lenders offering so-called “payday” loans and consumer leases, as falling property prices plunge more households into negative equity and banks crack down on credit.
Fintech development is accelerating in Vietnam with companies in the sector attracting US$117 million last year, the maximum funding in Vietnamese startups in 2018. Fintech surpassed e-commerce at US$104 million and other sectors, according to funding data by local accelerator Topica Founder Institute, showcasing the eagerness of investors to take part in Vietnam’s fintech opportunity.
Tima – US$3M
Founded in 2015, Tima is a consumer financial marketplace and peer-to-peer (P2P) lending platform. The company has signed partnerships with financial institutions, including VietinBank and Nam A Bank, and claims to have disbursed about US$1.7 billion in loans to 2.8 million borrowers and over 30,000 lenders on its platform.
Tima claims to have raised a US$3 million Series B funding round in October at a near US$20 million valuation and recently began the process of raising a Series C investment round after hiring former LendingClub COO John Donovan to its board of directors.
In such a case, availing instant Short Term loans from an online lender may help you in different ways.