Data from the New York Federal Reserve shows delinquent auto loans of approximately $23.27 billion as of December 31; auto loan delinquencies are now the highest they have been since the third quarter of 2008; the increase in auto loan delinquencies appears to be the result of expanded credit from auto financing companies to subprime borrowers; subprime borrowers accounted for approximately $280 billion in fourth quarter auto loans of which 75% were originated from auto finance companies. Source
HNA Capital is a private Chinese company gaining market attention in recent weeks for its acquisition of Anthony Scaramucci's Skybridge Capital and interest in acquiring more asset management businesses including Old Mutual's asset management division; the company has been acquiring assets now worth $145 billion with revenue of $45 billion annually; HNA Capital sees a market opportunity for asset management businesses with market volatility expected during the Trump administration and more investors shifting to actively managed strategies. Source
Monzo's CEO talks about the digital bank's growing business in an interview with TechCrunch; the firm was recently granted a UK banking license with some restrictions; the digital bank has 100,000 users with activity driven by pre-paid Mastercards and mobile applications; Tom Blomfield gives his perspective on the fintech banking market and new PSD2 regulations; Blomfield also confirmed Monzo has already turned down an acquisition offer from a major bank. Source
Several investment funds are reporting lower returns for 2016 including Lending Club's LC Advisors and Colchis Capital Management; both reported their lowest returns since launching in 2011; Lending Club's LC Advisors returned 1.83% in 2016, down from 5.76% in 2015 and 8.02% in 2014 reports the Wall Street Journal; Colchis's P2P Income Funds returned 6.2% in 2016; in the previous four years Colchis returned 9% to investors; higher defaults across higher risk loans have affected the performance; other publicly traded funds invested in marketplace lending have also struggled. Source
Nuoyuan Technology is optimistic about financial innovation in China and globally; the firm is growing its business in China and through its subordinate business, Nuoyuan Online Platform, offers a service that connects borrowers with lenders; Nuoyuan Online has now helped to finance over 5 billion RMB and has over 600,000 users; in their featured blog post they discuss the global market for fintech innovation and their expectations for the future. Sponsored Blog Post
Chase has announced it will launch a digital mortgage lending platform in 2017; Chase will collaborate with technology provider Roostify for the new digital lending offering; the digital mortgage lending platform will allow customers to complete their loan completely through online communication with features allowing for comprehensive loan comparison, processing, connectivity and approval. Source
Alternative data scoring considerations are becoming more prevalent in today's credit market; the Consumer Financial Protection Bureau (CFPB) has announced a public comment period seeking feedback on the potential use of alternative credit sources such as mobile phone bills and rent payments in credit approvals; the CFPB is seeking to identify how it might be able to serve consumers with minimal credit history; it says that approximately 26 million Americans have no credit histories and an additional 19 million consumers lack enough credit information to produce a credit score. Source
Robo advisors have been increasingly gaining market share however Morgan Stanley says they are not likely to overtake incumbents; in a research note the bank says it is predicting a $6.5 trillion market globally for robo advice by 2025; despite the initial growth and market opportunity for robo advisors, the competitive landscape shows investors will still demand human advice; as a result, the hybrid model for robo advice is expected to emerge in the next wave of innovation for the industry; Betterment provides a market leading example of a hybrid model with its new Betterment Plus and Betterment Premium services announced in January. Source
According to a report from Banking Technology, Amazon could potentially be acquiring Capital One; Capital One uses Amazon's AWS cloud services; its credit card business could complement Amazon's current offerings for payment processing and credit cards while also expanding its services for Amazon's merchant network; according to Neil O'Brien, former director of digital banking at Santander US, "There has been speculation for a long time about a tech giant (GAFA – Google, Apple, Facebook, Amazon) buying a bank in the US, but the general sentiment was that banks were an undesirable target because of low margins and more importantly, high regulation."; the potential for a bank acquisition is now likely to increase given recent regulatory developments in the financial services industry. Source
New Zealand-based marketplace lender Harmoney has announced the launch of its services in Australia; the firm has opened an office in Brisbane and plans to begin with $200 million in capital to lend; the firm has also signed agreements for institutional funding for the next three years; rates will start at 8.99% and the firm will offer loans from $5,000 (USD$3,829) to $35,000 (USD$26,801). Source