AdaPia D'Errico, a prominent executive and marketer in real estate crowdfunding, is departing Patch of Land; CEO Paul Deitch, who was recently brought into the company to help it mature and reorganize, bid D'Errico a fond farewell; she will continue to serve in an advisory role through 2017, while considering future options including other aspects of real estate; she is replaced by Robert Greenberg, who joined the company in August as a marketing consultant. 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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Lending Club's stock increased $0.76 for a 15% gain on Monday after reporting third quarter earnings that beat analysts' expectations; company also announced a new partnership with Credigy who will be investing up to $1.3 billion in Lending Club's loans; Lend Academy provides details on the company's earnings report in their article; highlights from the earnings report include revenue of $112.61 million, up from $102.4 million in the second quarter; earnings per share of -$0.04, up from -$0.09 in the second quarter; loan originations also increased with total third quarter volume of $1.97 billion, up from $1.96 billion in the second quarter however still significantly down from their high of $2.75 billion in the first quarter of 2016. Source
A legal case initiated by the city of Miami, Florida has reached the Supreme Court; the case (a combination of two earlier cases) claims that banks, including Bank of America and Wells Fargo, are financially liable for a decade of targeting blacks, Latinos and other minorities for loans with risky terms, including prepayment penalties, negative amortization and no documentation; there is concern that the case may be delayed until the Supreme Court regains a tie-breaking ninth Justice, or result in a return to the lower courts. Source
Though the company started off as a P2P lender, Lufax has diversified their offerings with great success and now views themselves as a Charles Schwab for the 21st century; as CEO Gregory Gibb says, "The truth is, we started there, but it represents less than 10% of our business volume today. So I think we're really very much an online wealth management platform."; Lufax focuses their business on wealth management, credit-rating services and institutional services where 60% to 70% of its solutions are based on traditional credit-rating metrics, with the remaining 30% to 40% centered on big data. Source
Today, the University of Michigan's "Next Billion" initiative writes about Bill and Melinda Gates Foundation research into financial inclusion and fintech; part of the research addresses payment aggregators that use APIs to connect buyers, commercial enterprises and other clearinghouses; the research claims that creating truly open APIs, which don't require complex legal agreements or technical integrations between parties, would be of great benefit to the financial ecosystem, including enhanced innovation and reduced transaction costs; a case study about Selcom, an African payment aggregator, highlights six areas suitable for near-term open API development: payment initiation (including via mobile wallets and online chatbots), check payment status, retrieving account history, easily cancelling a payment and a set of user interface foundation code that can be white-labelled by any customer-facing innovator. Source
DH Corp., Fiserv Inc., Fidelity National Information Services Inc. and other vendors have seen a drop in spending by banking clients, citing slow technology upgrades and delays in interest rate rises; banks have also begun to outsource the technology these firms provide or they have let the current contracts linger as they search for the best long term solution; vendors are beginning to build solutions for digital banking needs in hopes of keeping up with technology trends, but bank partnerships with fintech firms are causing an uncertain outlook ahead for these leading vendors. Source
PeerIQ provides insight on Cross River Bank and its $28 million investment from venture capitalists; the deal highlights Cross River Bank’s partnerships with marketplace lenders and provides a leading example for how banks can seek to gain from online lenders while also mitigating true lender risk; Cross River Bank likely to set a precedent for banking investment in MPL loans; success with marketplace lending partnerships has helped it to achieve a return on equity of 26.5% versus 9.8% for FDIC-insured institutions. Source
The small business lending approval rate from banks nationwide was 23.5% in October, while support from institutional lenders helped marketplace lending platforms to increase their small business approval rate to 63.1% nationwide, according to data from the Biz2Credit Small Business Lending Index; the economy also has been steadily improving with GDP and jobs increasing; however uncertainty over the election has affected the broad market which has seen nine of the past 10 days reporting losses in the stock market and another recently delayed rate increase from the Federal Reserve; following the election, consumers and businesses will be closely watching the affects on the economy and interest rates specifically as the country's new president influences credit markets, marketplace lending and fintech overall. Source
Tesco Bank publicized that modest amounts of funds had been stolen from 20,000 accounts this past weekend, with an additional 20,000 accounts being attacked by suspicious probes; the company manages nearly eight million accounts and they have been blocked from using debit cards since this weekend; Tesco's CEO says that they are confident they know the nature of the attack, but declined to explain at this time, and is asking UK regulators to allow them to make debit transactions allowable again as soon as possible; the UK's Financial Conduct Authority has called the attack "unprecedented in size and sophistication" but acknowledges limited IT expertise within the authority. Source
AltFi published their second installment of "Where They are Now?" - a report on the status of UK crowdfunded companies since 2011; 751 companies are listed; 73.60% of the companies remain active and 11% have closed; top platforms in the UK include: Crowdcube, Seedrs, SyndicateRoom, AngelsDen, Code Investing and Venture Founders. Source