MonJa’s Digital Banking and Lending Monthly Roundup | March 2020

In Commercial Lending, Industry News, Small Business Loan Underwriting, Underwriting Automation by Yulia GnatyukLeave a Comment

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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!


03/24/2020  Alt Lender Become launched a feature to help SMBs stay on top of coronavirus developments (Business Insider)

Become, the alternative lending platform that empowers SMBs to find and optimize funding solutions has introduced “COVID-19 business loan updates” feature on its platform aiming to keep business owners informed on all loan-related impacts of the virus to help them navigate these uncertain times. As there is a huge drop in consumer spending due to ongoing pandemic, the companies seeking loans have increased from 2,210 in week 12 of 2020 from just 822 in week 7. At the same time, approval rates for the business have dropped from 15% in week 8 to 4% during week 12 this year.

03/23/2020 SMB Loan Underwriting Prepares For Turbulent Times (Pymnts)

SMB underwriting is a complex and challenging process, especially for new companies that lack a credit history and have limited traditional data. This presents a market gap in the industry which has given an opportunity to various fintech players to come up with their new technologies such as automated underwriting, open banking etc. Wiserfunding, a London based Fintech company with its SME-Z score solution enables traditional and alternative lenders to better allocate funds to SMEs and manage risk better.

03/23/2020 Peer-To-Peer Lenders Seek BoE Bailout (Pymnts)

Amidst the COVID-19 spread across the globe, UK P2P lenders are seeking help from BoE (Bank of England) for access to stimulus funds. RateSetter, the biggest P2P player has over $800 million pounds on its loan book. As the government now regulates the P2P industry, the industry body of P2P space, 36H Group is strategizing to help the lenders in the space.

Assetz Capital, recently has secured funding from British Business Bank and is able to make over 100 million pounds ($115.4 million) in loans with the new capital. Marketplace lenders are seeing enhanced demand but don’t have the liquidity to provide for the same.

03/22/2020 Bankshot Banks are well positioned to help customers weather this crisis (American Banker)

With the government’s support and the capital levels built up since the 2008 financial crisis, banks are looking to provide relief to the majority of its customers. 90% of households have a bank account which means that if the right vehicle is chosen for individual relief, the banking industry would be a viable medium to provide the aid. As per the article in American Banker, an unsecured 18-month line of credit, offered by American banks pegged to the Federal Funds Rate of 0.025% could be that vehicle.

03/21/2020 Fintechs Seek US Government Funds to Help Make Business Loans (Yahoo Finance)

The rising spread of COVID-19 across the globe has put small businesses under crisis. Major financial technology firms, including PayPal Holdings Inc. are joining hands to help the SMBs from this financial crisis and are pushing the government to provide funding. Recently, an appeal made by the industry group Financial Innovation urges the government to provide capital to the technology firms and permits for dispersing Small Businesses Administration loans. With their wide reach, tech companies can be the perfect conduit for supporting small businesses.

03/19/2020 Banks, FinTechs Wield Open Banking For SMB Finance (Pymnts)

Iwoca, one of the largest business lenders in Europe, has announced the launch of its new platform, OpenLending. The goal is to power the integration of fintech and banks and will further help the lender increase its lending capabilities to over 2 million UK businesses. OpenLending also offers an API that brings connectivity between the ecosystem and helps banks, accountants, Fintechs etc. customize their loan offerings on a single portal.  Iwoca to date has signed with 14 partners for OpenLending and is looking to add Xero (accounting software company) as a new partner.

03/19/2020 Square Gets Regulatory Clearance to Open a Bank and Is Upgraded to Neutral at BTIG (The Street)

Square, which has lost more than half its market capitalization since February 20, 2020, was recently upgraded to Neutral at BTIG because it had received the regulatory clearance to open a bank in Utah. It also plans to launch Square Financial Services in 2021 as an independent direct subsidiary of the company. The article noted, “The company said in a statement that the Federal Deposit Insurance Corp. cleared its application for deposit insurance related to its Industrial Loan Co. bank charter. And Square said the Utah Department of Financial Institutions approved its charter”.

03/17/2020 JP Morgan and alternative lender Glenhawk, strike deal to grow loan book to £200m (Altfi)

JP Morgan has entered into a deal with alternative lender Glenhawk to support its loan book to £200 million by the end of 2021. It was the first time that JP Morgan has invested in a private securitization backed by UK bridging loans.

A new senior funding line with JP Morgan will be used to support Glenhawk’s funding the needs of professional, residential and commercial borrowers through the provision of short-term lending solutions.

03/06/2020 Tech investor T. Rowe Price builds large stake in Funding Circle (Altfi)

The US asset management firm T. Rowe Price has built a stake of 7% in Funding Circle and become one of the largest investors in the firm. Funding Circle suffered a major price drop after its IPO in October 2018. The share price was 440p in October 2018 and now is at an all-time low of 70p, a fall of 80%. The marketplace lender has also been affected by the weakness across global stock markets due to COVID-19.

03/03/2020 How N26, Revolut and Monzo are taking on the US market (Altfi)

The UK digital fintech players Monzo, Revoult and a German player N26 are capturing the market of the big four US banking giants naming – Bank of America, Ciitbank, JP Morgan Chase and Co and Wells Fargo and US upstarts like Chime. Around 14 million in the US do not have bank accounts and increasing demand for more sophisticated, transparent and personalized banking services is creating an opportunity for European digital banks to enter the US market. The German fintech giant N26, having a customer base of around 5 million customers globally, was the first one out of the three to launch in the US and is based in New York. It has launched its services with Californian online bank Axos offering a checkout and Visa debit card. Other giants, Revoult and Monzo have also started issuing cards in the US market. Revoultestablished a partnership with MasterCard at the end of 2019 and Monzo initially offered a ‘few thousand cards” to American customers at its launch in Los Angeles and has teamed up with domestic lender Sutton Bank.

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