MonJa’s Digital Banking and Lending Monthly Roundup – Why Subscribe?
Digital banking and lending is evolving rapidly. Recent fintech-banking partnerships and innovation in technology with the introduction of AI, ML and blockchain herald a new era in lending. Fintech’s are changing the competitive ecosystem, empowering lenders to process loans faster and smarter. In a world full of noise, understanding how the technologies and developments may impact your financial institution’s credit decisions and credit portfolio is of critical importance. With MonJa’s Digital Banking and Lending Monthly Roundup, it’s easy to stay up to date on what’s happening in the space. Get the latest updates, analysis and commentary on digital banking and lending segment!
29/01/19 Digital Lending’s $1.4T Travel Payments Plan (PYMNTS)
Everyone wants to travel. The millennial generation in particular is enamored with “experiences” which can shared on social media. This has created opportunities for fintech lenders to facilitate travel financing. Uplift, a B2B platform is powering travel providers to offer flexible payments to travellers. If startups can capture even a small percentage of the trillion-dollar industry, it will translate into a billion dollar niche.
25/01/19 Asset backed peer to peer lender raises cash for broker platform (ALTFI)
Ablrate, an asset–backed loan company is going to launch a platform for peer to peer lending which would make it easier for brokers and third parties to facilitate and raise funding. The Company has originated over £44 million in loans and has revenue north of £1.7 million. This is an interesting model which could see multiple stakeholders participating in the ecosystem.
25/01/19 Crowd2fund targets £2 million fundraise (ALTFI)
London based fintech lender plans to loan £40 million over the next twelve months and £3 billion within the next 3 years to generate £180 million in revenue- states Chris Hancock, C.E.O, Crowd2fund. It is looking to fundraise £2 million for the above targets.
25/01/19 US online lender Kabbage eyes to enter India market to tap digital space (BUSINESS STANDARD)
Kabbage, a Softbank-backed online loan provider to small businesses, is cautiously waiting to enter the Indian market by increasing its headcount in Bengaluru office to 125. India has over 50 million small businesses that account for almost 40% of the $2 trillion Indian economy. With its head quarter in Atlanta, it’s planning to make Bengaluru its second headquarter.
24/01/19 Fintech firms react to HMRC clampdown on ISA money deposits (ALTFI)
Peer to peer lenders might face trouble in finding traditional banks to hold eMoney from ISA investors. HMRC (Her majesty revenue and customs) warned that it does not consider eMoney wallets as suitable for cash subscriptions and investor funds.
23/01/19 Online lending platforms in blockchain partnership (ALTFI)
Marquee online lenders like SoFI, Avant, OnDeck and FundingCircle are entering into a blockchain partnership with Spring Labs. The goal is to leverage blockchain to reduce fraud, improve ID verification and reduce origination related costs. The Company closed a $15 million funding round and has on board Gary Cohen, ex-Goldman Sachs president and former economic advisor to Trump, as advisor.
23/01/19 Goldman, Citi Drop Chinese Peer-to-Peer Lenders After Crackdown (BLOOMBERG)
After a government clampdown due to rising frauds and defaults by p2p lenders in China, some of the major investment banks have dropped the sector as a candidate to be taken to the public markets. In a major blow, Wall Street biggies like Goldman Sachs and CitiGroup have stepped back from Chinese p2p IPOs in recent months.
23/01/19 Lending Express gets over regulatory hurdle to expand its offering (FINDER)
The Australian online lender, Lending Express announces its launch in California. It had already received approvals for launch in 45 other US states. It has exceeded $100 million in loan origination for Australian small and medium size businesses.
23/01/19 Fintechs Start To Feel The Pain From Government Shutdown (FORBES)
With the shutdown of Federal Government, stuck regulatory work is having a major impact on fintechs. Startups that were planning to go public via IPO or online lenders looking to sell originated loans to investors are facing delayed approvals from federal government. With the shutdown over, hopefully things will be back on track.
21/01/19 Are fintechs better off taking the ILC route to banking? (AMERICAN BANKER)
Industrial Loan companies can prove to be a last resort for fintech companies. “The lack of certainty on where the Fed stands on key issues — like the application of the Bank Holding Company Act or what it might charge a fintech to become a bank — could drive fintechs to explore the ILC charter,” said Sam Taussig, head of global policy at Kabbage Inc.
21/01/19 Stripe Links Small Businesses To Funding Circle Finance (PYMNTS)
As a result of the collaboration between Stripe and Funding Circle, Stripe users will be able to seek financing from Funding circle seamlessly by integrating their sales data to the platform. With this partnership, Funding Circle will be able to reach millions of businesses to provide better financing services. Similar partnerships will become a norm in the coming years.
21/01/19 Alternative Finance No Longer SMBs’ Last Resort (PYMNTS)
SMBs are still not fully aware of the Alternative financing options available to them. But sustained marketing push seems to be bearing fruit. Credibly’s SMB Forecast Report stated that over 60% of SMBs directly went to an alt-lender, bypassing the traditional banking system altogether. The time taken to raise the loan was a deciding factor in favor of alt-lenders.
20/01/19 Barclays-backed online lender MarketInvoice gets $72 million in funding (CNBC)
MarketInvoice, a British Lending start up secured $72 Million in new funding. The funding is a mix of equity and debt from investors, led by Barclays and Santander. The funding received will be utilized for increasing business in the UK and to develop partnerships with banks.
17/01/19 Goldman Eyes FinTech As Investment — And As Strategy (PYMNTS)
Goldman has made a sustained push in fintech in general and fintech lending in particular. Marcus, its in-house lending and deposit taking online platform, has recorded $35 billion in deposits last year. The Wall Street titan is also making independent bets. It recently offered a $95 million credit facility to Capify, an alternate SMB loan provider in Australia.
15/01/19 Fintech banking ambitions worry US Fed (ITNEWS)
The US Federal reserve expresses doubt about giving Fintech firms a way into financial infrastructure of country. This situation has put the central bank and the regulators in an awkward situation as regulators have been opening the door for deeper participation of fintech lenders into the financial ecosystem.
11/01/19 Alternative lenders try to fill void left by shutdown (AMERICAN BANKER)
As a result of the standoff (now over) in Washington, many financial lenders were seen trying to help individuals and businesses affected by the longest shutdown in US history. StreetShares, which mostly caters to military services, is offering bridge funding to small businesses caught in the political storm.
07/01/19 Could Regulatory Clarity on Alternative Lending Hurt Bank-Fintech Partnerships? (BANK INNOVATION.NEWS)
Alternative lending is drawing attention of prospective borrowers and government both. The Government Accountability Office
(GAO) has instructed financial regulators in it’s December report to examine the role of alt-lenders and especially their leveraging alternative data for credit decisioning.
Plaid is the plumbing of the fintech universe and helps links bank accounts with fintech services like Robinhood and Venmo. It has raised $250 million and is valued at $2.7 billion. The CEO of Plaid predicts that credit cards will face an onslaught of fintech lenders. A rise in interest rates will also see credit unions and community banks pivot towards digitizing for rationalizing costs.
03/01/19 Chesapeake Bank Strengthens Alternative Lending Through Cash Flow Product (BANKING EXCHANGE)
Virginia based Chesapeake bank is trying to bridge the gap between customer’s expectations and banking hours by moving loan applications online and seamless. The alt-lending service has been introduced to digitize the users’ loan experience.
02/01/19 Tighter Reg Shrinks China’s P2P Lending Mkt By 50 Pct In 2018 (PYMNTS)
Chinese government is all set to shut down weaker peer to peer lending platforms as the sector has been rocked by multiple scandals due to lack of regulation. The number of players has dwindled, with 50% platforms shutting down in 2018. It is expected that this number may rise to 70% in 2019.
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