MonJa's Monthly Digital Banking and Lending Roundup | September

MonJa’s Digital Banking and Lending Monthly Roundup | September

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

MonJa’s Digital Banking and Lending Monthly Roundup – Why Subscribe?

MonJa's Monthly Digital Banking and Lending Roundup | September

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!


  1. 09/28/2018:  Goldman Sachs launches Marcus in Britain.[CNBC]

One of the world’s largest investment bank, Goldman Sachs recently launched its digital retail banking product Marcus in the UK. Marcus allows consumers to sign up for easy to access savings account and gives them the facility to deposit values ranging between £1 and  £250,000. There is no withdrawal fee and the account will offer a savings interest rate of 1.5%. It will be interesting to see the response to the product in the UK. Also, the launch of digital lending for the UK market seems also imminent.

  1. 09/28/2018: Funding Circles raises 300mn pounds through its IPO. [Bloomberg]

Funding Circle, one of the leading digital lending platforms in the UK has raised around 300 million pounds through its IPO. The company had a flat start with price moving to 440.2 pence on opening day as compared to the 440 pence IPO price. It is currently valued at GBP 1.5 billion as compared to the initial negotiations of IPO pricing the 8-year-old company at GBP 2 billion pounds. But the company is still unprofitable as it invests in rapid growth.

  1. 09/27/2018: Fund raises $200 million to lend cash to startup employees whose liquidity is locked up in equity [Tech Crunch]

Troy Capital Group has raised $200 million for providing liquidity to employees sitting on startup equity. The fund is being backed by Private Equity giant OakTree Capital. The company has been founded by MySpace cofounder Josh Berman, Samit Verma and Brian Sullivan. The company will charge a 7% rate of interest. With companies paying key employees a large chunk in shares and startups remaining private for longer durations, this is a much needed credit product.

  1. 09/26/2018: Nelnet withdraws application for industrial charter [American Banker]

Nelnet had filed an application with the Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions on 28th of June to establish Nelnet bank. The industrial charter was filed in order to establish a subsidiary digital bank which would serve the student loan community. The Lincoln, Nebraska headquartered company withdrew the application and in a press release said it’s a “temporary setback”.

  1. 09/26/2018:  JP Morgan Chase sinks over 11bn into fintech[Lendit.com]

The American multinational company, JP Morgan Chase recently announced its ambition of becoming the most innovative bank in the world. Marianne Lake, The Chief Financial Officer of the company spoke about its extensive $11billion fintech investment, during an interview with Financial Times. The New York headquartered company employs more than 50,000 technology specialists and has a digital bank named Finn.

  1. 09/26/2018:  Covr Financial Technologies raises 10mn series –a-from leading technology venture firms.[Prnewswire]

Covr Financial Technologies, a multi-carrier digital life insurance platform for institutions, has raised $10 million in its Series A funding. It has raised a total of $20 million with the new round seeing all existing investors participating in addition to Allianz Life Ventures joining in as a new investor. Founded in 2012, Covr has a customer base of over 8 million and represents around 20,000 financial advisors. The latest funding will be used to expand its consumer base and introduce innovation in the existing platform.

  1. 09/25/2018 OCC Highlights areas of focus for 2019 supervision.

[AmericanBanker]

The Office of Comptroller of Currency announced the key risk areas that will act as focal points for its examiners in the bank supervision operating plan for the fiscal year 2018-219. OCC identified five risk areas that included cybersecurity, management of consumer compliance changes, underwriting of commercial and retail credit loan, compliance with anti-money-laundering rules, and internal controls related to product delivery. The operating plan will be beneficial for staff and managers in the committee for Bank supervision operating units, for directing horizontal assessments of banks during the supervisory cycle.

  1. 09/24/2018: Credit scoring firm Cortea lands $10m funding[BankingTech]

Cortera, a business-to-business (B2B) credit scoring company, has received $10 million. The funding round was led by Hearst’s Fitch Group Financial venture fund along with the current investors Tomorrow Ventures, Volition Capital, Battery Ventures and Allen & Company. The Florida based company led by CEO Jim Swift now has a combined debt and equity capital of over $578 million. Cortera collects insights on purchase and payments behavior from more than 20 million private as well as public businesses.

  1. 09/24/2018: MBA loans provider Prodigy finance secures one billion dollars funding.[BusinessWire]

Prodigy finance, an alternative student loans provider has received $1billion through debt financing. This investment saw participation from renowned names like Deutsche Bank, Goldman Sachs, and M&G Investments.  Prodigy finance is a borderless platform that helps prospective MBA students to fund their education degrees. With this $1billion funding, the company aims to explore technologies like blockchain, in order to further enhance its business.

  1. 09/21/2018 CFPB face legal minefield in crafting rule on small business loan data. [AmericanBanker]

Consumer Financial Protection Bureau, had released a recent report which puts emphasis on the problems faced by regulators as they consider collecting data from small-business lenders about their borrowers. The bureau requires data since it conducts fair-lending exams of small-business lenders to assess redlining risks. But the prohibition under Equal Credit Opportunity Act on collecting race and gender information from borrowers has created uncertainty on what rules will be able to pass legal scrutiny.

  1. 09/19/2018: P2P lending platform X Financial prices US IPO below midpoint at $9.50 [NASDAQ]

X financial, a peer-to-peer based lending platform in China, raised $105 million through its 11million ADSs (American Depository Shares) which were offered at $9.50, towards the low range of $9 to $11. The lead managers of the deal were Morgan Stanley and Deutsche Bank. The company plans to list itself on the New York Stock Exchange (NYSE) under the symbol XYF. The company will be valued t almost $1.5 billion on a fully diluted basis.

  1. 09/18/2018 Alterna capital solutions adds 30 million. [MarketWatch] Alterna Capital Solutions an alternative financing lender for small businesses announced an asset based credit facility with Well Fargo Capital Finance, a division of Well Fargo& company. Founded in 2018, Alterna has available capital north of $100 million. The company provides customized and comprehensive small business financing solutions.
  2. 09/18/2018: Fintech lender scores 300million funding deal with asset manager. [Altfi]

Thin Cats, one of Europe’s largest peer-to-peer marketplace offering secured business loans has bagged a funding deal of £300m from Insight Investment, a global asset manager. This new deal allows Thin Cats to fund over £600m and it can now fund UK SMEs with loans ranging up to £10m.

  1.  09/17/2018: Lendinvest raises $39.5million to grow its p2p property finance platform [Techcrunch]

A UK-based peer-to-peer lending platform, Lendinvest has announced that it has raised $39.5 million in a Series C round of funding, led by existing investor Atomico and involved participation from GP Bullhound and Tiger Management. The company plans to use this fund to develop technology and to move a step closer towards the traditional mortgage business. Lendinvest assists property buyers in picking up bridging finance, development finance and also provides financing for buy-to-let properties in the UK. It has raised a total of 152 million pounds from investors and its combined funding including investments raised through the platform via lenders have topped 1 billion pounds.

  1. 09/17/2018: Funding Circle Fund Sees US Loan Defaults Rise [PYMENTS]

Funding Circle’s SME Income Fund saw the number of loan defaults has increased in the month of August. According to the report, the average number of defaults per month has been 6 for the year so far. The return for the month of August was also a disappointing 0.1% as compared to 0.4% for the previous months.

  1. 09/13/2018: Ila capital partners with Swiss firm woodman on marketplace lending fund. [Crowdfundinsider]

Ila Capital, a Boston-based firm is entering into a $100 million partnership with Swiss Woodman Group to develop a marketplace lending fund based on machine learning, facilitating lending for both secured and unsecured loans.

  1. 09/10/2018: Peer Street Expands Real Estate investing options for short term. [BusinessWire]

Peer Street announced the addition of Cash Offer Loans, a new investment option that provides investors with short-duration loans. The objective of introducing this platform is to have a level-playing field in real estate investment. It will focus on short duration and high yield loans.

  1. 09/10/2018: U.S. Bank rolls out Simple Loan, offering small-dollar loans to compete with payday lenders. [Star Tribune]

The fifth largest bank in the States, U.S. Bank is launching a digital platform, Simple Loans which will offer small loans to its customers for short durations. The bank plans to keep this option exclusive to the customers who already hold an account in the bank. The product will complete with online and payday lenders and the U.S. bank is among the first mega banks to offer this product.

  1. 09/04/2018: Varo Money bank charter gets OCC approval.[American Banker]

The San Francisco based startup Varo money announced that it has received preliminary approval from the OCC to set up a national bank. Varo money had applied for a national bank charter in the month of June. The approval will enable Varo to set up the first ever all-mobile national bank in the United States. Varo money was founded in 2015 by Colin Walsh, CEO, and Kolya Klymenko, CTO and has raised more than $79 million in funding.

 

  1. 09/03/2018: Lending start-up portal finance nabs 200 million for small business loans in Latin America. [TECHCRUNCH]

Portal Finance, a Bogota-based start-up entered into an agreement with BTG Pactual, Latin America’s largest financial institution. The joint venture is a $200 million project that aims to provide lending services to small businesses in Latin America. This deal draws attention towards the significant demand for small business loans across the region.

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