CEO Tom Burnside from LendingPoint provides his insight on how to be successful in the online lending business in this featured blog post; gives five factors for success; Tom Burnside is optimistic about the industry's growth and potential as well as the success of LendingPoint; in 2016, LendingPoint gained steadily as it continued to focus on providing credit for underserved consumers through fair credit underwriting. Sponsored Blog Post
Jason talks with Forbes about his involvement in marketplace lending, the development of the first LendIt USA event in 2013 and much more; initially founded by Jones, Bo Brustkern and Peter Renton, LendIt started as a meetup and has grown to become the biggest show in lending and fintech in the US, Europe and China; this year's LendIt USA event will feature the market's leading online lenders, new tracks for fintech innovation and PitchIt at LendIt with eight finalists presenting before a panel of judges; LendIt hosts three events throughout the year with its next event in China. Source
FST Biometrics has raised $40 million and is developing a solution for facial recognition that detects your identity while you are in motion; the biometric technology presents a new solution for security identification; by detecting your identity it can be used to unlock doors and provide various other types of security access. Source
R3 has reported it will focus on its Corda platform; the firm was developed to create blockchain inspired solutions; in comments regarding Corda, R3 Managing Director Charley Cooper says, "It is heavily inspired by and captures the benefits of blockchain systems, but with design choices that make it able to meet the needs of regulated financial institutions."; R3 refutes any wasted efforts on blockchain research saying it never intended to use blockchain technology directly; Cooper also notes, "We've said from the beginning that while Corda is a distributed ledger platform, it is not a traditional blockchain platform and was never designed to be one." Source
The Evolution of Home Buying: The Rise of Home Ownership Investments and What It Means for Consumers
Innovation in online real estate is creating new funding opportunities for homeowners and Unison is one of the market's leading fintech firms; in their featured blog post they provide a recent white paper titled, "A New Era for Home Buying: The Rise of Home Ownership Investments" and give insight on how home ownership financing is changing; the firm introduced home ownership investing in 2007 and has been working since then to integrate it into the US housing finance system; through Unison, home buyers receive an investment for their home that tracks with the home's value and has no financial obligations until the home is sold. Sponsored Blog Post
Online lender 4finance has reported its earnings for 2016 with an increase in revenue and net income; revenue increased 24% in 2016 to 393.2 million euros ($413.35 million); it reported another year of net profit with net income increasing to 63.2 million euros ($66.4 million), up from 58.2 million euros ($61.2 million) in 2015; in 2016 the company's net loan portfolio was 493.9 million euros ($519.21 million) and the average interest rate on its loans was 120%. Source
In business for six years, Lufax has expanded to meet a growing market demand for fintech products in China with a number of factors helping its success; beginning as a P2P lending firm with the support of Ping An the firm has been able to expand its business to wealth management and overall sees an underserved domestic market of over one billion people interested in the firm's solutions; it now has over 25.5 million registered users, RMB390.92 billion ($57 billion) of retail assets and RMB111.65 billion ($16 billion) of loans under management; it has been able to successfully navigate the market challenges with help from Ping An and is now approaching an even more global introduction through its potential initial public offering expected for later this year in Hong Kong which could raise approximately $5 billion for the firm. Source
The UK's Department for Media, Culture and Sport has published a digital strategy report outlining its plans for the tech sector post-Brexit; the government plans to invest 17.3 million British pounds ($21.27 million) into artificial intelligence and robotics research and also reported a 1 billion British pound ($1.23 billion) program to improve internet connectivity across the UK; it will also create five international tech hubs, host a competition for fintech products and create a forum for communicating with the tech community; all of its efforts are geared towards helping the UK remain competitive in the tech industry. Source
Funding Circle has announced a new $100 million multi-year investment agreement with Community Investment Management including provisions for additional investment; the $100 million investment will focus on small businesses in the US; the investment supports continued growth for Funding Circle which has reported monthly lending of over 100 million British pounds ($122.92 million) since November. Source
The underserved or underbanked have always had a problem getting access to credit that is affordable. The panel at LendIt USA 2016 entitled, "Providing Access to Credit in Underserved Markets" explored the different types of thin file borrowers around the world.
Lenders first need to understand who they are looking to serve and be sure to define their market. Understanding the type of borrower you are looking to serve will allow you to better evaluate the limitations of the data you will receive from this borrower.
How do lenders look to serve borrowers with a thin file, no file or limited data set from the traditional credit bureaus? They look to compile alternative data to help them evaluate the different borrowers.
These non-traditional lenders will pull some traditional data, as well as alternative credit bureau data and proprietary data such as questionnaires they ask to these borrowers. Alternative data can be phone payment records, bank transaction analysis and social data.
These newer lenders are no longer constrained by technology; banks used to have about thirty variables to analyze a borrower, now companies can look at two or three times that amount and are no longer limited by legacy technology.
LendUp, ZestFinance, China Rapid Finance and Oportun all serve a different type of borrower, but they all extend credit to the non-prime, non-traditional borrower. Serving these types of borrowers has additional impacts as well, the more people that are able to access affordable credit the better it is for broader communities.
To learn more about the latest trends and technology in credit and underwriting please join us at LendIt USA 2017, where we will have a dedicated track covering the market.