Nearshore Systems announced two online lending platform development partnerships at LendIt USA 2017; the software engineering firm was chosen by Dianrong to support the efforts of the firm's new blockchain-based solution; Nearshore was also selected by US-based Hijro to support the development of the firm's trade finance platform built on distributed ledger technology. Source
Baidu is active in artificial intelligence (AI) development and could provide an investment channel for investors seeking to gain from the innovative technology; the company is integrating AI into nearly all aspects of its business and in September launched artificial intelligence platform "Baidu Brain" which integrates AI in search, news feeds, maps, Nuomi and PostBar; the firm is also evolving AI for healthcare and actively developing autonomous driving solutions powered by AI; overall, its business model can easily integrate AI while it also provides products for AI entrance in other markets. Source
The European Investment Fund (EIF) has pumped over $2 billion into venture capital funds and startups in the last four years; with the vote to leave the European Union, venture capitalists in the UK now fear that this important source of funding will disappear as the government looks to officially complete Brexit; the UK is not as fortunate as the US when it comes to endowments that allocate capital to funds, therefore the EIF has filled a much needed role; there currently is no plan to replace the EIF when the UK officially leaves, though lawmakers and lobbyists are looking to see if they can strike a deal to keep the flow of capital coming. 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
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
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
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
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
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
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