ItBit Hit With String of Departures in Bitcoin-to-Blockchain Transition
A slew of recent #departures from #itBit suggest a changing future for a startup originally founded as a #bitcoin exchange service.
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P2P Lending Platforms Revamp The Consumer Lending Industry
Peer-to-peer (P2P) #lending, one of the hottest #fintech industries, has experienced tremendous growth in the past five years and is expected to be worth US$ 150 billion by 2025, according to PwC.
After the financial crisis in 2008, P2P lending emerged as a new method for consumers to get loans easily and quickly, bypassing traditional #banks that had tightening their #consumer lending policies.
The model quickly grew in popularity, attracting borrowers with the new platforms’ perceived low interest rates, simplified application process, and quick leading decisions.
In 2014, an estimated US$ 5.5 billion worth of loans have been issued in the US alone with an average growth of 84% per quarter since 2007.
Growth has been largely influenced by technological breakthroughs and demographical shifts. Most particularly, the Millennial generation – those born between the early 1980s and the early 2000s &8211; has set new standards in the financial services #industry.
P2P lending and Millennials
Image credit: Rawpixel.com via Shutterstock
This demographic is demanding greater convenience, mobility, real-time update, and are using entirely different channels.
Tech-savvy and socially-minded, Millennials are changing the face of finance and have embraced fintech solutions. A recent report by Oracle and Wharton Fintech suggests a notable increase in the use of non-bank options by this demographic in solutions such as mobile wallets, mobile money and overall alternative payment solutions.
In the P2P lending area, Millennials are ten times more likely to use P2P lenders than those 50 and older, according to the Fair Isaac Corporation. The demographic is becoming a larger portion of the consumer loan market as they seek credit to finance major purchases or refinance their student debt.
“The Millennials are prime targets for P2P lending as they value the convenience of transacting online and are less loyal to banks,” according to PwC.
P2P lenders vs. banks
While the industry is experiencing strong growth, lending from large banks, on the other hand, has decreased dramatically. In the US, the ten largest banks lent US$ 44.7 billion in 2014, a drop of 38% from its peak of US$ 72.5 billion in 2006, according to Techcrunch.
That said, banks shouldn&8217;t be afraid of these new players as P2P lenders &8220;are unlikely to pose a threat to banks in the mass market,&8221; according to Neil Tomlinson, Deloitte&8217;s head of UK banking.
Image credit: Stokkete via Shutterstock
In a report released earlier this year, the consulting firm argued that these new platforms &8220;will not be significant players in terms of overall volume or share.&8221; It said that P2P lenders cannot compete with banks in mainstream markets and should in fact focus on profitable niche segment markets where their knowledge can be a competitive advantage.
The report encourages banks to start collaborating with P2P lenders to deliver superior UX capability, maintain customer relationship, gain access to data to improve the bank&8217;s risk scoring, as well as provide an option to under-served segments.
For these platforms, collaborating with banks would allow them to increase awareness among borrowers and investors, gain scale and lower their customer acquisition costs.
A number of banks have already teamed up with P2P lending startups: JP Morgan Chase provides loans to its SME customers using OnDesk&8217;s platform; Metro Bank deploys customer deposits through Zopa; and RBS and Santander UK are both regering SME customers rejected for a loan to Funding Circle.
Featured image by Anton Gvozdikov, via Shutterstock.com.
The post P2P Lending Platforms Revamp The Consumer Lending Industry appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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Silicon Valley Bank Building Out Payments Services
Watch out #payments industry, #Silicon #Valley #Bank is coming. The bank for startups — officially named SVB Financial Group &8212; said last Friday that it was boning up its payments infrastructure and #services by “leveraging strategic partnerships to offer scalable and sustainable payment solutions to our clients, at every stage ofRead More
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Blockchain Researchers Debate Future of Consensus Tech at IBM Event
Forty #blockchain #researchers met in Chicago this week to hash out #consensus mechanisms that might be employed by distributed ledgers.
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N26 Adds Investing Just Days After Becoming a Bank
N26, the German banking startup that has been called the Simple of Europe, announced that it had been granted a banking charter last week. Wasting no time, the company announced today it has added investment services to the account through a partnership with the roboadvisor vaamo. This pairing of servicesRead More
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Ethereum Creator Vitalik Buterin Addresses ‘Classic’ Blockchain
#Ethereum #creator #Vitalik #Buterin issued new statements today addressing the increasing support for Ethereum #Classic.
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FinTech Infographics: The Evolution of FinTech
The #FinTech industry offers #technology solutions and services to solve financial isues. This #evolution started with the birth of the signature verification system Pantelegraph, invented by Giovanni Caselli in 1865. The system set the initial milestone for the glorious development of FinTech.
For 2 centuries, both Technology and Finance had developed significantly. The financial ecosystem had grown, more complicated businesses with many kinds of stakeholders took part in a fair and legalized playground. Mean while, Technology has been moving forward, going beyond what it had developed and through the industry disruption, especially Finance.
Dealbook/NYT wrote an article about the Evolution on Fintech, this is based on a study from the university of Hong Kong. We tried to summarize this information in an interactive graphic.
Have a look!
Infographics: The Evolution of FinTech
#Infographics | The evolution of FinTech – Information source: the NYT
2009, #Cryptocurrency was introduced at the first time
Over last decades, FinTech gains impressive achievements. The 1st-version cryptocurrency #Bitcoin, introduced in 2009, offered an equivalent type of transaction and goods exchange. It is a new kind of asset, a new investment. It is opening a cashless world where people can go shopping with a handy device or even their own unique identity.
The evolution of FinTech &8211; Information source: the NYT
2011, Google launched Google Wallet
The desire of a convenient and safe payment method initiated the launch of e-Wallet. Its first shapes are credit/debit cards, visa/master cards in the system of mPOS (mobile Point of Sales). In 2011, Google pioneered to release Google Wallet. This year, the mobile phone giants Apple and Samsung released their e-Wallet, Apple Pay and Samsung Pay. Before the introduction of this payment solution, the American FinTech company PayPal offered Payment Gate to connect merchants and buyers, which enforces online payment to be used widely. Paypal was launched in 1998 and still holds its position in the market as a Top FinTech of over the last decades.
2015, mobile banking is more popularly used than physical branch and Alibaba released “Smile to Pay”
With the whole FinTech industry’s development and the community&8217;s adoption of its products (e-Wallet, Cryptocurrency, Crowdfunding, etc.), more people use Mobile Banking than Physical Bank in 2015.
The most latest milestone has been created by Chinese E-commerce giant, Alibaba. In 2015, Alibaba launched &8220;Smile to Pay&8221;. The launch of &8220;Smile to Pay&8221; had impressed people greatly because it solves the issue of identity / identification in payment and finance.
The evolution of FinTech &8211; Information source: the NYT
The road of FinTech expanded with promising products when more and more labs researched and applied Technology into Finance. Moreover, the financial ecosystem has shown the opportunities for FinTech Startups to join and solve many FinTech problems.
The post FinTech Infographics: The Evolution of FinTech appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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Has Ethereum’s Hard Fork Created a New Kind of Double Spend?
In a new opinion piece a former Deloitte consultant asserts the ramifications of #ethereum’s #hard #fork are a case for private blockchains.
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How Regions Bank Provides an Amazon-like Experience
#Regions #Bank tied with Amazon.com in a recent ranking of web experiences. How does a super-regional bank match the efforts of one the most sophisticated digital companies in the world, one that obsesses over customer #experience? “Our customers ask for the same thing they did 20 years ago,” Andy Hernandez, EVP and headRead More
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Fintechs can help incumbents, not just disrupt them
While true for other financial services, it’s most striking in corporate and investment banking.
McKinsey Insights & Publications
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