An open source movement helped propel technology in the 80s and 90s and industry professionals are speculating on the need for another open source movement in today's current environment; while open source is not favored because of its intellectual property disadvantages it does have significant advantages for innovation; Crowdfund Insider details some of the areas where it is being discussed including third party data sharing and loan stacking; it has also been a topic recently debated at LendIt USA 2017 and is in ongoing development and discussion with the Online Lending Policy Institute, ID Analytics, the Marketplace Lending Association and numerous other industry groups. Source
News Roundup
This page contains an archive of the Global Newsletter summaries and the weekly fintech news roundups.
Every day the Fintech Nexus news team scours the globe for the most important stories of the day to include in our daily newsletter.
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Kristin Lemkau, chief marketing officer at JPMorgan, says the bank has limited its web ads to 5,000 from 400,000 in an effort to improve the quality of ad displays; marketers have taken a programmatic advertising approach which features ads across the web based on browsing habits versus investment in individual sites; the new limitations for JPMorgan use a more customized white listing approach and are also the result of fewer ads on YouTube following recent issues. Source
According to a new report from Accenture, nearly half of investment in insurtech startups globally is going towards artificial intelligence (AI) and internet of things (IoT) technology; the report, titled, "The Rise of InsurTech," includes analysis from CB Insights data on 450 insurtech deals over the last three years; the report was released with the launch of Accenture's Fintech Innovation Lab in London, which will include a focus on insurtech. Source
Yirendai is being sued by shareholders for inadequate transparency, regulatory activity and risk management regarding Chinese government regulations; the company has requested the court toss the case; the case is focused on worst case revenue predictions that the company says were never realized. Source
Quint owns a number of fintech companies that focus on the consumer credit sector including Moneyguru.com; the company was founded in 2009 and currently has operations in the UK, US, Australia, Poland, China and South Africa; the £10 million ($12.5mn) infusion comes in the form of a debt facility from Tosca Debt Capital and this will see CEO and Founder Greg Cox's ownership stake increase to 90%; Richard Williams, Partner at Tosca Debt Capital, stated, "The deal will enable Quint to achieve its full potential in terms of growth and importantly ensure shareholder value is maximised over the next few years." Source
The Office of the Comptroller of the Currency (OCC) released its fintech charter in March; many state regulators oppose the charter saying the OCC doesn't have the authority to offer the charter and that the charter is dangerous, unnecessary and violates state sovereignty; Brian Knight from the Mercatus Center at George Mason University discusses these arguments and how state legislation may evolve with the introduction and debate of the fintech charter. Source
American Banker discusses the evolution of online lending fraud and the industry's vulnerabilities; the combination of synthetic identities and multiple loan inquiries known as loan stacking have increasingly become a threat in the industry; while a number of new systems have been implemented to mitigate fraud the nature of the business makes it more susceptible with fraud prevention solutions becoming more prevalent. Source
TechCrunch analyzes rates at marketplace lending platforms, identifying a trend towards increased delinquencies and borrowing rates for lower credit quality borrowers; platforms have been increasing rates for lower credit quality consumers to potentially offset some of the higher risk of defaults; analysts have speculated that the changes occurring in the lower credit quality categories could be a sign of recession however other economic factors appear to be stable; TechCrunch identifies a significant change occurring in the labor market that could be influential for borrowers over the long term; the automation of jobs is affecting the labor market and the result could disrupt a number of historically stable industries while also changing the tech industry substantially. Source
Kroll Bond Rating Agency has released a report on its asset-backed securitization rating methodology highlighting its methodology for marketplace lenders; discusses marketplace lending characteristics and platform analysis; also reports on key factors for transaction structuring. Source
The New York Department of Financial Services continues to thoroughly investigate the business practices of online lenders; a proposal is in process that would require increased regulation for online lenders; specifically new regulations would be instituted for all lenders making personal loans of $25,000 or less and business loans of $50,000 or less and would also apply to online lenders involved in soliciting loans and buying loans. Source