Monthly finance industry news from October 2017

Bondora in the news

The Independent reported a record number of trade marks were registered in 2016 by financial services firms. They say “The use of trade marks in financial services is popular because it is relatively easy for competitors to copy financial products, meaning that they can become commoditized”.

***

Gründerszene interviewed Bondora’s CEO & Founder, Pärtel Tomberg, who discussed our German investor based and future plans. When discussing our goals, Pärtel said “We want to offer a product where anyone in Europe can borrow and lend”.

***

Les Échos also interviewed our CEO & Founder, discussing Bondora’s history, passing the €100M mark and cross-border ambitions for the future.

***

AltFI News asked a number of industry experts about the potential for Amsterdam to cement its position as European Fintech hub, or if there will be multiple European hubs in the aftermath of Brexit.

October 2017 industry news recap

P2P-Banking covered the highly anticipated annual Lendit Europe conference in October which is known as an ‘Event for Innovation in Financial Services’. 3 predictions put forward for online lending by Renaud Laplanche, CEO of Upgrade, were:

  1. The growth of online lending will accelerate in the next 15 months
  2. An organized secondary market for online loans will emerge in the next 15 months
  3. Continued re-bundling will give birth to at least one major consumer product innovation in the next 15 months

***

CityAM published an interesting piece comparing Lego with P2P lending. One of the most interesting comparisons put forward is that Lego has survived and thrived in the past decade due to its ability to embrace change and technology, diversifying from its traditional product. Similarly, the P2P has done exactly the same by embracing the world of borrowing and investing to create a product that benefits even more people.

***

Business Standard discusses the important topic of trust and transparency in the global P2P markets. As the P2P industry expands in India, the Reserve Bank of India (RBI) is following the UK, US and China in implementing a macro regulatory framework. This shows that they are not only embracing the industry, but they are helping to boost confidence in investors and borrowers.

Monthly finance industry news from September 2017

News from around the world

Banking Exchange published a piece asking if marketplace lending nearing maturity. Keith Noreika, acting Comptroller of the Currency in the U.S., stated “Startup funding fades and shareholders begin to demand performance, or at least progress toward profitability.” However, it’s worth noting that Noreika was previously a lawyer working to protect banks and now “many of his former clients are regulated by the Office of the Comptroller of the Currency,” according to the NYT.

***

American Banker discussed the growing debate concerning the appropriate level of regulation required for P2P businesses. Arthur Levitt, the former Securities Exchange Commision Chairman, remarked that “Fintechs tend to march to their own rules.” However, those opposing Levitt have cited that even established, traditional institutions have experienced plenty of scandals.

***

Forbes looked at ways in which consumers can use P2P loans to pay off high interest debt. One of the major benefits discussed is the fact that P2P loans are unsecured, meaning the borrower is not obligated to tie the amount back to an asset. Additionally, many people who rely on P2P funding can repay their loan at a lower interest rate than what they experience with regular card payments.

***

The Economic Times looked at ways people can supplement their retirement income with P2P lending. The author looks at the rising cost of living and how many retirees are faced with a shortfall in savings. The cited benefits to investing in P2P lending are, diversification, returns uncorrelated to the stock market, and compounding. While the author discuss these benefits in the context of India, the concepts apply to all nationalities.

***

The Sydney Morning Herald reported on how “yield-hungry investors switch their cash to peer-to-peer lenders.” Much of this comes from historically low interest rates that make savings accounts less desirable. Moreover, P2P investing still provides a level of liquidity that’s agreeable to younger investors that want to maintain access to their cash.

Bondora mentions

Lending Times and Crowdfund Insider made note of our recent accomplishment, sharing that 28,639 users have invested 102 million through our platform.

Weekly industry news roundup – September 11, 2017

News from around the world

Forbes had a creative take on marketplace lending suggesting that it could be used to handle high interest debt. The author suggests that the “soft pull” on one’s credit report is less burdensome to a credit score. In many cases the interest rate will be less and therefore more amenable to those with heavy debts.

***

Financial Express offered an overview of the basics behind P2P lending. Transparency, speed and paperless transactions were all cited as benefits to this new form of lending. Meanwhile lenders “in the past few years have seen an average return between 12% and 18% annually.”

***

Small Business Trends examined “7 Things Things to Ask About an Online Funding Marketplace Before Taking Out an Application Online.” The author explains that those in need of capital can benefit most from the combination of reasonable interest rates and faster processing than what’s seen with traditional lending.

***

Banking Exchange offered a detailed look at the consumer credit market. Their research tapped into data concerning millennials and how they’ve adapted technology to manage their finances. “fintechs show some of the best risk-based pricing that we’ve seen,” remarked the senior vice president at TransUnion.

***

ETRetail looked at ways marketplace lenders are strategizing their expansion. Many marketplace lenders are finding growth among smaller borrowers. Major banks have traditionally eschewed this group due to shorter credit histories or smaller borrowing requests that prohibit large fees or heavy interest expense.

Weekly industry news roundup – September 4, 2017

News from around the world

AltFi published an article examining the question of whether or not the marketplace lending sector in the U.S. has recovered. The writer looks at recent upheavals in the industry exhibited by layoffs and a few bankruptcies. Despite these problems P2P lending remains on solid footing and has, in fact improved amid reports that “online lending equity investment was $2.3 billion in the USA in 2016. Through August 3rd of this year the total stood at $2.5 billion.”

***

Forbes released an informative piece covering “Three keys to earning up to 7% with peer-to-peer lending.” The author explains that readers should (1) invest a minimum of $5,000 with diversified holdings, (2) use automated rebalancing tools and finally (3) use P2P investment in conjunction with Tax-deferred accounts.

***

City A.M. addressed various myths surrounding P2P lending. The author helped readers understand that stock market downturns have a different impact on P2P investments and might not be as prone to declines in a poor equity market. She also looked at how interest rate changes influence marketplace lending offering that, “interest rates on P2P platforms are not set by the banks, but by the supply of and demand for money.”

***

StockInvestor asked “Can investors profit from peer-to-peer lending?” They make a strong case for why it is, in fact, possible to profit from P2P investing because “As a result, P2P lenders are able to provide their services more cheaply than banks and other traditional financial institutions. P2P lenders therefore have the ability to achieve higher returns compared to what might be offered by banks. Borrowers can borrow at reduced interest rates even when a P2P lending company’s fee is included.”

***

Inside Trade advocated for P2P investing due to factors like a lower correlation to equities and bonds. Additionally, they explained that diversification is easy with the categorization of borrowers and risk profiles. Finally, they remark on the security of platforms offering that “P2P lending companies use very effective algorithms to determine return rates.”

Weekly industry news roundup – August 14, 2017

News from around the world

Market Insider reported on the the second annual summit for Online Lending Policy Institute in Washington, DC. The author explains that the meeting is designed to be an “opportunity for industry participants to share insights, propose standards, and have an open dialogue with regulators and policymakers to build consensus viewpoints on the regulation of online lending.”

***

Entrepreneur published an article exploring the four ways the online lenders are innovating with purchasing cards. For example, the use of a purchasing card allows the lending authority to measure if funds are being used for their intended purpose.

***

The Financial Times discussed moves by some P2P lenders to safeguard borrowers by offering to “protect them from losses by paying out on a bad loan directly from its own coffers.” As more marketplace lenders enter the market competition is growing giving rise to more favorable terms to lenders.

***

Forbes asked if “Technology firms are the next financial service providers.” The author explores the ways in which blockchain technology, necessary for most P2P firms, works “by reducing transaction costs and removing intermediaries, blockchain technology is poised to increase mass peer-to-peer collaboration, which could make existing financial organizations unnecessary. This ingenious tech is demystifying the existing layered financial systems and shifting the way financial institutions conduct transactions.”

***

CNBC discussed how startups often source P2P firms as a way to access capital before reaching the stage of VC funding. The author explains that “small business loans and lines of credit are now available from many providers.”

Weekly industry news roundup – July 18, 2017

News from around the world

PeerIQ released a 2017 Q2 report indicating that the “quarter saw nine marketplace lending securitizations with quarterly issuance of $3.0 Bn, representing 76% growth over 2Q 2016. To date, cumulative issuance equals $21.9 Bn across 92 deals.” The report adds several other financials to support the notion that P2P lending is a growing industry.

***

Market Realist took a closer look at Amazon’s growing lending business. The site has issued over $1 billion in small business loans over the last 12 months. The loans have been focused in the U.S., UK and Japan. Meanwhile, PayPal still towers over Amazon in total dollars lent. To date their selling hook appears to be offering competitive rates.

***

PRNewsWire recently explained that dv01, the lending market analytics platform, has partnered with a company called Upgrade which historically has offered loans and credit monitoring services. The credit data of users within the Upgrade database will likely bolster the overall analytics within dv01.

***

News.com.au explained that most Australians don’t know about marketplace lending because “Generally P2P providers may have fewer funds to spend on marketing.” Despite this fact, many believe that P2P lending will grow in the country as a result of increasing awareness and trust. The data from the research within the article explains that “63 per cent growth in P2P users in the past six months, while data from some providers shows 195 per cent growth last financial year.”

***

Reuters shared a study showing that women are better at crowdfunding. In a study of 450,000 crowdfunding campaigns across the globe PwC found that women were 32% more successful than men at reaching their target. Moreover, the same study showed that women were slightly more successful as measured by dollars raised than men.

Bondora mentions

Estonian business news portal Äripäev had a closer look at regional alternative finance platforms and their performance in a larger finance industry context. Bondora was brought as one of the few profitable P2P lending companies in Europe in 2017.

Weekly industry news roundup – July 10, 2017

News from around the world

Altfi published a piece looking at various emerging trends in finance. The author discusses how many marketplace lenders are applying for banking licenses. This move enables more P2P businesses to offer more products like credit cards and overdrafts.

***

CreditEase, a fintech company based in China, released an article discussing some of the most groundbreaking companies working in the fintech space today. The author looks at crowdfunding, robo-advisors and of course marketplace lending and explains that the development of these businesses will grow in China over the next decade.

***

CrowdFund Insider discussed recent moves from The European Investment bank Group (EIB) and the European Investment Fund (EIF) to fund SMEs via crowdlending. The French Minister of the Economy and Finance remarked that, “We are committed to our entrepreneurs. This EU capital will strengthen the impact of the French Fintech start-ups.”

***

CXO Today had an interesting take on the emergence of P2P lending in India. The author explains that within the country the space has 20 players and continues to grow. However, for this growth to continue the industry will require additional financial backers.

***

CrowdFund Insider released data that The Netherlands raised nearly €100 million in crowdfunding during the first 6 months of 2017. This total is a welcome change from the stagnant performance of the industry in 2016 in the region.

Weekly industry news roundup – July 3, 2017

News from around the world

Forbes published an article which touched on the “shift from individual to institutional lending” in the peer-to-peer lending world. The authors explained the continued growth of p2p lending explaining that in the UK alone, originations grew by 36% in 2016.

***

Born2Invest offered a quick overview for first-time investors seeking to grow their savings with peer to peer investing. The author stresses the importance of making the investment in P2P lending part of a larger portfolio encompassing other asset classes.

***

Newsmax released a piece looking at how the CHOICE act in the U.S. is helping to give fintechs a boost. Startups and small businesses will have easier access to the capital they need to grow. This is possible as the bill softens the regulatory burden on newer ventures.

***

Nasdaq released an article exploring alternative ways to hedge against a downturn. The author cited peer-to-peer lending as one idea. The author explains how investors have the benefit of modulating their risk exposure by considering different borrowers.

***

The BBC penned a whimsical article offering tips on being more charming. They included an interesting research statistic citing “In one experiment, borrowers who were perceived as looking less trustworthy were less likely to get loans on a peer-to-peer lending site.” The research comes from The Review of Financial Studies.

Weekly industry news roundup – June 26, 2017

News from around the world

American Banker published a piece warning that marketplace lenders should refrain from attempting to replicate the practices of traditional banks. The author suggests that when marketplace lenders become more like a bank they give up some of their competitive edge and characteristics that make them so appealing to investors.

***

Lend Academy took an interesting look at the state of marketplace lending in Japan. While this market has been lagging in Japan compared to the U.S. and UK it has seen explosive growth in recent years. In fact, the marketplace lending industry has been doubling in size in recent years in Japan. Incredibly, “There has been almost no loss of principal for three years across all crowdfunding platforms,” according to the author.

***

INC. took a look at Amazon’s growing presence in the marketplace lending world. The monolithic company started lending in 2011 and “has surpassed $3 billion in loans to small businesses.” However, today the loans are exclusively small business offerings to their marketplace lenders. The author warns that banks could see further loss of business as a result of this growing venture.

***

Nasdaq reviewed which loans can help expand a small business. The piece touches on online lenders explaining that “online lenders often have a faster approval process than banks originating SBA loans.” The article is a good introductory guide to what a small business will need in preparing to apply for a loan.

***

The Huffington Post explained that “American entrepreneurs raised $34.5 billion online 2016.” Moreover, they announced that “P2P lending, and balance sheet lending , grew by 22% in the United States in 2016.” The article splits apart different sectors of the market and examines how each has grown in recent years.

Bondora mentions

In German: Deutsche Handwerks Zeitung cited Bondora among other alternative financial services which allow you to borrow or lend money without turning to banks.

Weekly industry news roundup – June 19, 2017

News from around the world

Politico reported on the Marketplace Lending Association’s first ever meeting with lawmakers and regulators in the U.S. The goal of the initiative is to bring these politicians up to speed on the developing relationship between traditional banks and P2P firms. This event is another step towards the legitimization of the industry.

***

The Economic Times published a piece looking at how the rise of P2P lending doesn’t necessarily portend doom for banks. Rather, the two entities can form a partnership. Banks often have stricter lending parameters that keep many customers from acquiring loans. However, a partnership with a marketplace lender could open up more opportunities.

***

The Los Angeles Times warned that “Online lenders are a growing economic and political force. Big banks worldwide could lose 24% of their revenue over the next few years to fintech firms offering personal and commercial loans.” The author also looks at why some of the rules for marketplace lending might develop independently of banks.

***

Peer 2 Peer Finance News offered a quick guide from small and medium sized enterprises seeking capital through P2P lending options. The author explores how the low overhead of P2P lending can benefit small companies that might otherwise be turned away from everyday banks.

***

Forbes released an article looking at the personal finance habits of millennials. It cites studies revealing that “The Millennials are the biggest generation in history.” This size gives them substantial sway over financial markets. This phenomenon will have major ramifications as they turn to more empowering options like marketplace lending.