Marketplace lending platforms have offered investors a viable alternative for fixed income market returns however their disclosures and reporting standards are continuing to evolve; while these disclosures can vary by platform, Rupert Taylor from AltFi says lenders should consistently ensure that there is alignment between investors and originators, also noting that, "Lenders should seek platforms that can demonstrate that their overriding motivation is to originate loans at an interest rate that adequately compensates for the risk of default."; appropriately assessing a platform's returns is important for investors and Rupert Taylor advocates for increased demand from investors for platform performance transparency. 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
Wilmington Trust provides insight on the marketplace lending industry in their featured blog post; the blog post includes an edited version of a panel discussion on the growing opportunity for institutional investment in the industry; discussion includes how the industry is defined, its borrowers and lenders, and its outlook. Sponsored Blog Post
The new credit card features a built-in fingerprint scanner that replaces the use of a pin number; the card is currently being tested in South Africa with expansion planned to Europe and Asia and then globally by the end of the year; MasterCard has confidence in the biometric authentication and the firm's chief of security says it can offer customers additional convenience and security. Source
Announced today, the MasterCard Foundation is partnering with the Center for Financial Inclusion (CFI) at Accion on a $4.4 million initiative to promote more robust consumer financial protection laws around the world; CFI's Smart Campaign has existed since 2009 and has certified the consumer protection practices of 68 financial institutions to-date; the MasterCard Foundation contribution will support involvement of more parties (such as regulators, non-bank financial institutions and fintech platforms) and more countries; a particular focus will be on sub-Saharan Africa. Source
Nava Finance Ltd. has announced plans to launch a new marketplace lending platform in the UK in 2017; the platform will be called Nava and will focus on near-prime consumer credit loans with investment only from institutional investors; the founders believe their experience and credit underwriting models can provide competitively priced loans for borrowers and competitive market returns for investors. Source
JPMorgan asset-backed securities (ABS) analysts have highlighted marketplace lending securitizations, noting their growth and trending performance; cite marketplace lending ABS as one of the fastest growing securitization categories, increasing from $3.3 billion in 2013 to $9 billion in 2016; also say performance is better or similar to the broad market's ABS consumer loan securitizations overall with higher returns and lower default rates; additionally, the analysts report that credit characteristics on Avant's securitizations have improved. Source
Marlette Funding has filed for a new securitization portfolio, Marlette Funding Trust 2017-1; the portfolio details were filed by Marlette Funding Depositor Trust; associated parties include Deutsche Bank Securities, Citigroup Global Markets and Goldman Sachs; the portfolio will contain unsecured consumer loans originated by Marlette. Source
MasterCard is launching customizable bots for merchants and banks; they have partnered with Kasisto, the company that created KAI Banking, a conversational AI platform; consumers will be able to manage their money inside Facebook Messenger, asking questions about their accounts, purchase history, spending levels, etc.; transactions will also be able to take place on Messenger with MasterCard’s Masterpass, a digital payment service. Source
Mastercard is the latest company to be added to OnStar Go, a cognitive mobility platform where drivers can browse stores and restaurants and purchase directly on their dashboard; get gas and pay for it without getting out of the car; after its launch in July, Masterpass is currently available in 33 markets, with plans to expand into 36 by the end of this year; the new dashboard will be deployed across two GM vehicles in the US by 2017; "The global momentum we're achieving with banks, merchants and consumers is proof-positive of our efforts to create simple and secure digital payment experiences anywhere consumers want to shop," said James Anderson, Executive Vice President of Digital Payment Products at Mastercard. Source