Boris Batin and Alexander Dunaev have grown a successful lending startup after partnering together and launching ID Finance in 2012; the company is an online balance sheet lender that has been expanding throughout Russia, Europe and South America; the partners claim a digital lending business model that can launch and obtain profitability in nine months; part of their success is attributed to identifying challenging markets with growth potential that traditional banks have not entered. Source
SupportPay is an app that provides a unique solution for managing child support payments; in 2016 the firm was one of only a few female led fintech venture capital fundraises; Sherri Atwood raised $4.1 million for development of SupportPay which offers a digital solution for receiving child support and tracking child care expenses; the increased transparency the child support app provides has helped the firm gain interest from state agencies and legal firms managing divorce cases involving child support. Source
CNBC reports on institutional developments in the marketplace lending industry with statistics on the growing securitization market for marketplace loans; in 2016 securitizations backed by marketplace loans totaled $7.62 billion, a 300% increase from introduction in 2013; securitizations are expected to continue at a strong pace with SoFi dominating the 2016 securitization market with 58% of issuance and leading in 2017 with a $564 million securitization portfolio; other institutional investors are also reporting interest including Jeffrey Gundlach of DoubleLine Capital, Zurich Insurance Group, and property and casualty insurer Chubb. Source
President Donald Trump has issued an executive order requiring the Treasury secretary and regulators to come up with a plan to overhaul Dodd-Frank and its over 400 regulations; the banking industry's tighter regulations have been a factor helping the success of marketplace lenders since the financial crisis and deregulation in the sector could create new challenges and increased competition for marketplace lenders; as the government begins to take deregulatory actions for traditional banks it also seems that marketplace lending has reached a phase likely to see increased regulations and involvement from regulators; these two forces along with other market factors could change the competitive landscape for the marketplace lending industry. Source
Lend Academy shares details about some of the emerging platforms in the real estate market; new platforms have been providing innovative services to help make real estate transactions easier and make homeownership more affordable; companies mentioned are offering lower down payments and some participate in purchasing equity of the home; new platforms are also significantly reducing the expected transaction time for buying and selling a home. Source
Biz2Credit has announced a new partnership with Tradeshift for expanded small business access to capital; Tradeshift is a cloud-based business procurement network supporting over 800,000 businesses; companies that use Tradeshift will gain access to the Biz2Credit platform for financing options; Biz2Credit says the partnership will help Tradeshift's clients secure financing more quickly and easily. Source
Customer acquisition is a key factor for both traditional banks and online lenders; both use similar marketing tactics to reach customers and expand customer accounts; expensive marketing strategies have led many financial services companies to focus on providing free financial health and planning tools for their customers as part of their marketing strategy for customer acquisition; FICO provides examples from Prosper and Discover in their featured blog post; notes some of the things needed to develop successful financial health and planning tools. Sponsored Blog Post
LendingCrowd has launched its innovative finance individual savings accounts (IFISA); the account has a minimum investment of 1,000 British pounds ($1,250); the account investment will be automatically allocated to a portfolio of LendingCrowd loans; the portfolio will target a rate of return of 6% for its investors; the IFISA product has been well received with the Lending Works IFISA launch attracting more than 500,000 British pounds ($624,850) within three hours. Source
Legislators have reintroduced a bill that would enable alternative credit scoring to be used by Fannie and Freddie for evaluation of mortgage loans; these government sponsored enterprises currently use a FICO credit scoring model which legislators believe is outdated; legislators have now proposed the Credit Score Competition Act which would allow for use of alternative credit scoring models that also take into consideration a broader range of factors. Source
Chinese bitcoin exchanges OKCoin and Huobi have announced they will pause bitcoin withdrawals for one month; the companies report that the halted withdrawals will allow them to improve their anti-money laundering capabilities and improve their processes for mitigating fraudulent transactions. Source