Initial results from a congressional investigation shows that minority business owners are more likely to seek a loan from a fintech firm and potentially pay a higher fee; Rep. Emanuel Cleaver (D-Mo.) wants to further explore whether or not these lenders are aggressively targeting these borrowers and offering higher rates; the investigation has focused on online lenders and their underwriting practices for emerging minority owned businesses. Source.
There have been a lot of executives recently who have expressed their opinions about cryptocurrencies; while many people agree that the technology behind bitcoin has huge potential, there are a wide variety of opinions about cryptocurrencies; Lend Academy shares quotes from Jamie Dimon (JP Morgan), Larry Fink (Blackrock), Mike Novogratz (Galaxy Digital Assets Fund), James Gorman (Morgan Stanley),Axel Weber (UBS), Christine Lagarde (Head of the International Monetary Fund) and Lloyd Blankfein (Goldman Sachs). Source
Business Insider interviewed Renaud Laplanche last week at LendIt Europe; on his exit from Lending Club, Laplanche stated, “It was very, very frustrating. I'm not commenting on the story, but the best way to actually understand what really happened is to read the filings. I think the press made it sound a lot worse, a lot more sensational, than it really was.”; he is taking what he learned from building Lending Club and applying it to his new company Upgrade; Laplanche stated that he hopes to launch a new product each year with possible expansion into mortgages, auto loans, credit cards, home equity and lines of credit. Source
Once seen as a niche segment of finance online lenders are now originating billions in loans each year; the bigger they get the questions start to arise if they can handle an economic downturn and are their underwriting models good enough; American Banker digs into the overall industry by looking at securitization growth, whether or not traditional banking is dead and more. Source.
PayPal’s shares have climbed close to 75 percent in 2017 and now is considered more valuable than American Express; their market cap has doubled since spinning off from eBay in 2015; while it now finds itself on the heels of Morgan Stanley and Goldman Sachs there is still some who fear they might be valued a bit too high; acquisitions, product diversification and partnership agreements have helped push the company in the last year. Source.
Writing an opinion piece on CoinDesk the Managing Director and CTO of the DTCC Rob Palatnick explores the progress of blockchain technology in finance; he says that while we are still in early days of implementation the industry has learned how important collaboration is to mitigate risk, enhance efficiencies and drive down cost; working together will help to avoid the many silos that exist today and allow for blockchain technology to reach its potential; he also looks at some of the recent consortiums and the work the DTCC has done so far in the space. Source.
In PeerIQ’s weekly industry update they cover the IMF’s recent global growth forecast being raised and the recent securitization deals in online lending; while global growth is up the IMF also pointed out that a third of banks by assets might struggle to attain profitability; recent securitization deals from Marlette Funding and SoFi highlight a busy quarter in the sector; the newsletter also takes a deep dive into bank earnings for JP Morgan, Citi, Bank of America and Wells Fargo. Source.
AlphaFlow is an investment platform for real estate that allows investors to easily build a diversified portfolio; Sturm shares what platforms they are working with, their due diligence process, the types of loans they invest in, how they’re planning to work with offline hard money lenders and more. Source
Speaking on a panel at the annual meeting of the Institute of International Finance in Washington, CEO Jes Staley stated, “There are some tectonic shifts going on, driven by tech and the geopolitical environment…All the banks are very focused on the payments space. That may be where the battleground of finance is fought over the next 15 years.”; cybersecurity is also a top concern for financial firms and the co-head of Deutsche Bank AG’s corporate and investment bank expressed concerns on whether regulators are holding fintech firms to the same regulatory standards. Source
American Express is looking to use the same style data that has made PayPal and Square so successful in small business lending; Gina Taylor Cotter, senior vice president and general manager of global commercial financing at American Express. tells American Banker,“We have done some research on this and we are trusted providers, so this puts us neatly between banks that may have a longer application process and the online lenders who are fast, but maybe a bit more expensive." Source.