Investing startup M1 Finance decided in December that charging 25 to 40 basis points was not working, so it decided to allow users to use their platform for free; since shifting to the free model the company has seen more than $1mn a day come onto the platform; rival robo advisors like Betterment and Wealthfront think the move is an act of desperation, though both companies offer or have offered some version free services; CEO of M1 Brian Barnes tells Business Insider, “M1 is very limiting from a trading perspective but it is a phenomenal tool for building a portfolio for the investments you want." Source.
The CEO and Chairman of Laurel Road, formerly Darien Rowayton Bank (DRB), shares how he built a small community bank into a leader in student loan refinancing. Source
Goldman Sachs continues to expand into consumer lending and plans to offer home improvement loans this month; the loans are non-secured personal loans with interest rates lower than credit cards but higher than HELOCs; the company believes the quick financing time will be attractive compared to a HELOC. Source
The new express branches are meant to help customers with routine transactions like withdrawals and deposits; customers looking for further advice or a loan would be able to connect via videoconference or go to a typical branch; they are looking to serve millennials in a more efficient way and allow them to access bankers and wealth managers through a digital experience using iPads; removing some of the human intensive areas of the bank and making it more self serve will cut down on costs and help to serve the younger, digital customers. Source.
Kreditech, looking to launch in India, partnered with Mambu and their Software as a Service banking platform; Kreditechis planning to launch in India this year with their partner PayU, the payments provider; Alexander Graubner-Müller, CEO of Kreditech, tells Banking Technology that Mambu’s cloud-native solution “easily integrates into our architecture, allowing us to quickly scale and adapt to market and consumer demands”.; this will now be the sixth country the company is in and they plan to get it up and running in the first quarter of 2018. Source.
The company shared information about their loan business in a broader update about the company; total lending was $3 billion since Amazon Lending started in 2011; an article by PYMNTS.com in June 2017 reported that the company had surpassed $1 billion in loans; in 2017 over 300,000 small and medium sized businesses joined Amazon Marketplace. Source
Bank of America Merrill Lynch announced it has partnered with fintech firm CellTrust for messaging to clients; the new service will be focused on client to advisor text messages; the partnership will allow the bank to catalogue all communication with time and date stamps, tracking and logging activity; they plan to launch the new program over the next two months. Source.
Online near prime lender LendingPoint to boost expansion into point-of-sale with acquisition of LoanHero. Source
In recent months Jersey City has seen three more companies relocate to the area; companies recently relocating include Yellowstone Capital, World Business Lenders and Principis Capital; this is in addition to BlueVine and Funding Metrics recently opening up operations in the city; one of the main drivers behind the move is the Grow NJ tax program helping businesses save money by relocating. Source.
Since the financial crises banks, for the most part, have focused their time and effort on complying with new regulations and building up capital ratios in case another crisis hits; while they were doing this another industry, fintech, emerged and has eaten into some of the core profit making businesses of the banks; banks have started to catch up with technology and as countries like the US look to pare back some crisis era rules the banks see the next few years as the perfect opportunity to invest wisely in technology; the one thing the banks might not be able to handle is if Amazon, Facebook or Google begin to encroach further into fintech, potentially bring in competition who can immediately match up in size and strength. Source.