Marketplace Lending News Roundup – November 17

News

During the week I share the latest marketplace lending and fintech news on Twitter as it happens. Then every Saturday I take the most interesting news items and blog posts from the past week and share them here.

Losses Pile Up at Fintech Firm SoFi as Rates Rise from The Wall Street Journal – The Wall Street Journal is reporting today that SoFi lost money in Q3 to the tune of $12m as they “optimized for investing over profitability this quarter”.

Banks Pushback Hard on CECL; FinTech Earnings Recap from PeerIQ – The latest PeerIQ newsletter discusses trends in CECL and gives a good overview on earnings of five public fintech companies.

Blockchain slashes approval time on syndicated loans, BBVA says from American Banker – The syndicated loan space could become a major use case for #blockchain technology as shown by this recent deal from BBVA.

Online lending: US fintechs gain from behaving more like banks from Financial Times – Interesting piece about the evolution of online lending with a focus on OnDeck and comments from CEO Noah Breslow who says “I still think we are a fintech but a ‘tech’ is a stretch”.

Starling Bank hits the high street with Post Office partnership from AltFi – Here is a new kind of partnership. In the UK digital challenger bank StarlingBank has partnered with the post office to enable customers to deposit and withdraw cash.

Revolut Unveils New Tech to Reduce Fraud for its 3M+ Customers from Crowdfund Insider – Leading UK neobank Revolut is leveraging the power of machine learning as it fights card fraud and money laundering.

AI must be scrutinized by regulators, top Fed official warns from American Banker – As banks and non-banks use artificial intelligence more Federal Reserve board governor, Lael Brainard, has warned about its “potential risks to bank safety and soundness, consumer protection or the financial system”.

Monzo to offer cash deposits via PayPoint from Finextra – Earlier this week we heard Starling Bank partnering with the UK post office and today Finextra is reporting that Monzo is partnering with PayPoint (with 28,000 locations in the UK) to allow their customers to deposit cash.

Want to be a fintech startup? Here are 10 things you need to consider from Ron Suber from NJ Tech Weekly – The godfather of fintech Ron Suber is at it again. Here is coverage of a presentation he did in September where he discussed the opportunities for startups entering the space today.

Look at issuing digital currency, IMF head tells central banks from Financial Times – The head of the IMF has gone on the record to say central banks should look seriously at issuing digital currency in order to “fill the void left by the decline of cash”.

Are you a minority borrower? You might want to think twice about using an online lender. from The Washington Post – A new study from UC Berkeley finds that “algorithmic credit scoring using big data is no better than humans at evening the playing field when it comes to determining home mortgage interest rates.”

Are we in an online lending bubble? from Tearsheet – While I don’t think we are in an online lending bubble Zack Miller makes a good point about acquisition costs. These costs have to come down for the industry as a whole to become profitable.

Is Fintech Bad For Your (Financial) Health? from Cornerstone Advisors – Great piece by Ron Shevlin on fintech and financial health. Improved financial literacy is not the answer, we need to change people’s habits.

Another Chance at Bipartisan Financial Regulatory Reform? from Mercatus Center – Great piece by Brian Knight on why the Madden decision has been bad for consumers and the possibility for bipartisan reform in the new Congress.

A fintech’s bait for banking’s big fish from American Banker – One of the more interesting fintech startups to emerge in the last couple of years is Self Lender. They have a unique approach to building credit for low to moderate income consumers and are getting good traction.

PayPal and Square quietly grow small business lending using data as their edge over banks from CNBC – PayPal and Square are becoming sizable small business lenders with their large captive databases.

From the Lend Academy Forum

The Lend Academy forum is where investors go to discuss p2p lending. Below are some topics that were being discussed this week.

LC increases interest rates 11/8/2018 – LendingClub has increased interest rates for A and B grade loans.

New Money Bonus – A Prosper investor has received an email offering an investment bonus for adding new funds.

How did this note ever receive an A1 grade? – Forum members discuss loan selection strategies looking at a particular loan that recently charged off.

Is LC no longer interested in retail investors? – The number of loans allocated to the fractional market appears to be decreasing.

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