Revolut has announced a new partnership with Lending Works that will allow the mobile banking app to offer P2P loans; through the partnership, the app's mobile users can submit loan applications and receive funding; loans will be available for 500 British pounds ($608) to 5,000 British pounds ($6,079) with APRs of approximately 9.9% and Lending Works will use customer data from Revolut in loan underwriting approvals; the partnership is expected to bring a significant amount of new business for Lending Works which was launched in 2014 and has lent a total of 50 million British pounds ($61 million) to consumers. Source
Fintech solutions are rapidly evolving and their growth appears to be creating increased market opportunities for innovative fraud; the frictionless payments market specifically has reported a spike in digital financial crime as money launderers find new and innovative ways to steal identities and develop synthetic profiles; the Financial Times also reports on the use of e-commerce for new types of fraudulent activity, noting that criminals can use fraudulent transaction platforms to setup inexpensive e-commerce sites that elicit funds from internet shoppers; with innovative fraud solutions growing fast, the costs of monitoring and mitigating fraudulent activity are becoming an even greater factor for fintech companies. Source
Berlin-based solarisBank has raised 26.3 million euros ($27.95 million) in a Series A funding round; investors included Arvato Financial Solutions, Japanese SBI Group, FinLeap, Hegus and Yabeo Capital; the company offers a banking platform solution that helps companies connect with innovative banking service modules for business integration. Source
European digital bank N26 has increased its customer base by 200,000 users in just 14 months as digital bank solutions become increasingly more popular in Europe; the company has also reported a new transactions milestone of 3 billion euros ($3.1 billion); the Berlin-based company is targeting tech savvy millennials and has introduced a number of competitive features to attract new customers including a lending product that allows for mobile loans up to 25,000 euros ($26,556); the business has raised over $55 million in capital and is planning to expand to Britain in 2017. Source
A group of House Republicans has sent a letter to Comptroller Thomas Curry requesting his agency slowdown its plans for a fintech charter; the letter was signed by House Financial Services Committee Chairman Jeb Hensarling and 33 other House Republicans; it primarily suggests that stakeholders are not receiving an appropriate amount of time to comment on the full details of the fintech charter and that there is potential for the fintech charter to be overturned by Congress. Source
UK digital bank startup Monzo has listed a new crowdfunding campaign on Crowdcube and is seeking to raise 2.5 million British pounds ($3.09 million) as part of a broader fundraising for a total of 22 million British pounds ($27.18 million); Business Insider provides details on growth plans outlined in the crowdfunding campaign; Monzo is currently showing a seven year plan to an initial public offering which will include an estimated 75 million British pounds ($92.67 million) in new capital in the next five years; Monzo says it will raise capital again in May 2018 and it expects to report a profit after 2020; the firm has been granted a banking license and will begin offering deposit accounts as well as overdraft lending which it expects to help improve profitability. Source
CreditEase Fintech Investment Fund (CEFIF) announced three investments in new fintech companies at LendIt USA 2017; the investments were a series C round in Trumid, an electronic trading platform for the bond market, series B round in WeConvene, an online corporate access management ERP provider for capital markets, and a seed round in WorldCover, an innovative peer-to-peer insurance network; Anju Patwardhan, senior partner of CEFIF, said: "We believe the Chinese fintech market will continue to grow in 2017 and beyond, as many three to five year-old companies have grown into large-scale operations. We expect many of these to mature into high-quality, mid-to-late stage companies." Source
The Office of the Comptroller of the Currency (OCC) has published details on its fintech charter in a 16-page supplement to its existing OCC licensing manual; the fintech charter supplement addresses capital requirements, liquidity, financial inclusion plans, consumer protection and the application process; Lend Academy provides an analysis in their article; the release of the fintech charter will now be followed by an open comment period which ends on April 14; also noteworthy is that Thomas Curry's term as comptroller ends on April 9 however he can serve until a replacement is confirmed. Source
Vista Equity Partners has announced the intended acquisition of DH Corporation which it will subsequently merge with Misys to create one of the world's largest global fintech leaders. Under terms of the proposed acquisition, Vista will acquire all of the firm's outstanding debt and the equity shares of DH Corporation which trade on the Toronto stock exchange. Vista will pay C$25.50 (USD$19.15) per share for a total value of approximately C$4.8 billion (USD$3.6 billion).
The influence of DH Corporation and Misys is likely to be substantial. This week DH Corporation launched Total Lending™ Small Business a digital solution for financial institutions that is intended to improve the online bank lending process and customer experience for small businesses. In January Misys also announced a crowdlending technology solution that provides financial institutions with a platform for offering P2P lending.
These developments combined with a greater interest in fintech partnerships by banks overall and the potential regulatory implications for increased US bank lending in general are likely to influence the market landscape. This week Marlette Funding announced a workforce reduction and OnDeck has also significantly reduced its workforce following its recent earnings announcement. While exponential growth opportunities still exist for fintech companies, cost efficiencies continue to remain a central driver of demand. As broader solutions develop across the industry, it's likely that cost structures and a focus on tighter profitability forecasts will become increasingly important in order to navigate the changes ahead. Source
UK digital bank Starling Bank is now available to a broader set of users; still in a beta testing phase, the firm is now adding additional clients beyond just friends, family and product testers; as enhancements to the platform it recently announced its public API, which will allow for a product marketplace, and it has also partnered with TransferWise; Starling Bank will be offering its users full current account functionality with a contactless MasterCard debit card also including international payment services. Source