SunTrust Bank, Ally Ventures and Amazon Alexa Fund teamed up with others to raise $16mn for Greenlight Financial Technology; Greenlight makes smart debit cards for kids and college students to spend more wisely; The company also offers a mobile app complete with parental controls so parents can teach their kids how to spend; this is a further jump into financial services for Amazon as it looks to enter the space through the partnership model. Source
Peter Renton, Founder of Lend Academy and Co-Founder of LendIt shares his latest quarterly investment results; Renton earned an overall 5.01% return for the 2017 calendar year with his investments in LendingClub, Prosper, P2Binvestor, Peerstreet, Streetshares, AlphaFlow, Money360 and YieldStreet. Source
Customers using Zelle within their banking app have fallen prey to a scam where they send money for tickets but never receive the ticket; since the transaction is instantly done the scammer then closes their account and by the time the bank fully settles the payment the money is gone; banks in the Zelle network, and Zelle itself, have said do not send money to anyone unless you know and trust them; when money is lost customers are asking who should be responsible for replace the funds, should the bank refund them or Zelle; the relationship between the banks and Zelle is not entirely clear from the user perspective, with more frauds occurring customers are starting to ask more questions. Source.
BOA filed a lengthy regulatory filing this week; in it they mention the risks of cryptocurrencies to their business; the bank wrote: “The widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services as we grow and develop our internet banking and mobile banking channel strategies in addition to remote connectivity solutions.”; they also discussed the regulatory consequences of cryptocurrencies which could limit the ability for the bank to track movement of funds. Source
The recent funding of Greenlight Financial Technology is part of a recent trend that has financial services firms as of all sizes focusing on education; according to the Center for Financial Services Innovation 57 percent of Americans are financially unhealthy; one of the biggest issues financial education has had is that it’s hard to define; companies have been trying to offer different types of education through online courses and other tools that help customers to better understand their full financial situation; fintech companies are not the only one’s offering such services, big banks like JPMorgan Chase and Wells Fargo have recently added focused products and tools to help customers. Source.
Bank lending is once again off to a slow start in 2018, but signs show the slowdown will only be temporary; the recent tax cuts could help to spur more borrowing; interest rate rises on the other hand could hurt companies looking to potentially borrow; as the economy keeps trending positively banks should see lending pick up in the coming months. Source.
According to a New York Federal Reserve report, online mortgage lenders approve loans faster, experience fewer defaults and encourage more refinancing; not surprisingly they are also able to respond to customers as demands shift; the report studied banks and fintechs to better understand the market; lending from fintechs has grown by 30% annually since 2010, from $34 billion to $161 billion, representing 8% of the market. Source
In this week’s PeerIQ Industry Update they cover the latest minutes from the FOMC meeting, the new NY Fed report on mortgage lending and Lending Club’s earnings report; the FOMC is on track to raise rates 3 times in 2018 and the new rates could affect ABS pricing; the NY Fed report on the role of technology on mortgage lending said fintech lenders are reducing processing times by 20 percent and default rates by 25 percent; Lending Club reported record revenue and a net loss, their stock dropped 18 percent on the news; PeerIQ also gives a report on their recent partnership with Cross River Bank. Source.
Capital One is looking to ensure innovation at the bank is beyond add ons that might solve a particular problem; the bank is looking to take a fuller look at innovation and not just trying to be first to market with a new product; Capital One has rolled out a chatbot, an Alexa skill and more as they look to try and make banking part of their customers everyday experience; Sanjiv Yajnik, president of financial services at Capital One, tells TearSheet “The real power is shifting the way in which you think about the product. Customers today are demanding products and services that are seamlessly integrated into their lives.” Source.
Deloitte tracked 86,034 blockchain projects since 2009 that are hosted on GitHub; according to their data over 26,000 blockchain projects were started in 2016 and financial services firms are leading the way in blockchain; 92% of blockchain projects have failed or were started as an experiment; The Finanser shares other findings from the Deloitte report. Source