LHV Bank Integrates Estateguru Investments in Online Banking Dashboard

Who? What? You might wonder why that is relevant as most readers are unlikely to be LHV Bank customers. LHV Bank is a bank in Estonia.

I think it is highly interesting, as it is – to my knowledge – the first time a bank has integrated p2p lending investments in its customer interface. So the LHV bank customers, not only see their accounts and stock depots, but also their Estateguru investments conveniently listed in their online bank dashboard. Much has been talked about what role could banks have in p2p lending (mere transaction banks? providing credit lines?) and also there is a lot of speculation if PSD2 (open banking) will help fintechs to seize the access to the customer from banks because they could control the user interface in the future. But this is actually a first step a bank takes in the opposite direction. By aggregating “non-bank” information inside the dashboard, they aim to make the banking interface more useful for the customers.

estateguru lhv
(Source: Estateguru)

Press release:

LHV customers can now see their short term property loan investments on LHV internet bank. On the summary view of internet bank, besides public stock exchange investments, one can see also alternative investments like short term property loan investments and cryptocurrencies, thus making it possible to get a quick and comprehensive overview of one’s investment portfolio. EstateGuru and Coinbase are the very first services to be switched on to the platform.

“LHV’s new service is the best example of cooperation between banks and fintech. LHV is most definitely a trendsetter in the banking sector. It is fulfilling to see that short term property lending has become a solid part of investments, and traditional banking has accepted it. EstateGuru has more than 25 000 investors throughout Europe, and the number is rapidly growing among both retail, professional, and institutional investors. We can provide our customers with more added value via interfaces like that of LHV’s  “, commented EstateGuru’s COO Mihkel Stamm.

Alternative investments have become a substantial part of the Estonian investment scene, particularly among new investors. There are more than 13 000 people in Estonia who have invested in crowdfunding platforms. The fixed rate of return on debt instruments and access to the new and attractive asset classes have found their well-deserved place in investors’ portfolios. The better the quality of information, the more successful the investors.

“LHV aims to keep pace with its customers’ investment activities and that’s why we decided to take a step closer to the universe of alternative investments. The added value of this new service for our customer is a better and more comprehensive overview of the assets, thus making the portfolio management more successful “, added the Head of Investment Services at LHV, Martin Mets.

About EstateGuru

EstateGuru is the leading European platform connecting an international community of investors and businesses offering the highest diversification options for investors and flexible terms and speed of funding for businesses. The mission of EstateGuru is to provide hassle-free and flexible financing to property developers and entrepreneurs as well as diversified property backed cross-border investment opportunities to its international investor base—from the small individual investors to the institutions and everyone in-between. EstateGuru has more than 25 000 investors from 45 countries and the total money lent to date is more than 122MEUR. …

About LHV

LHV is the largest domestic financial group in Estonia. LHV’s mission is to help to create Estonian capital. According to LHV’s vision, the people and enterprises of Estonia dare to think big, start things and invest in the future. LHV’s values are to be simple, supportive and effective.

ING Diba Buys Lendico

Bank ING Diba acquires p2p lending marketplace Lendico. According to Finanz-Szene.de the transaction was reported to the German Federal Cartel Authority last week. The bank has confirmed the acquisition.

Lendico went through hard times. It had to cut back on international activities, never really took off on German home turf and realigned from consumer lending to SME lending. Last year the majority stake was sold from Rocket Internet to Arrowgrass.

Speculation is that the bank acquired Lendico in a make or buy decision to save development time for an own platform, which could have taken over a year. While the price of the acquisition was not disclosed, I suspect Lendico could have come cheap, considering the lingering of the business in the past years.

Banco BNI Europe Starts to Lend on Multiple P2P Lending Platforms

Banco BNI Europa was launched in July 2014 as a digital-only bank in Portugal. Banco BNI Europa says it aims to challenge the traditional banking sector through strategic partnerships with fast-moving fintech businesses to launch new products allowing the use of the most advanced technology in terms of risk analysis, consumer experience and rapid entry into the market.

Today Banco BNI Europe announced it will start lending on Fellow Finance.

‘Modern banks expand and grow by partnerships. Fellow Finance enables and offers an easy access to invest and lend in Nordic and Central European consumer and SME loans through its platform. Through their investment account at Fellow Finance, Banco BNI Europa is able to diversify their balance sheet investment into Finnish and German loans easily and cost-effectively. This is an example that banks don’t need to set up their own expensive operations on ground but can effectively enter markets through marketplace lending platforms. It is also an example how banks can also utilize the presence of FinTech among their core business’ says Jouni Hintikka, the CEO of Fellow Finance.

‘Investing via Fellow Finance in consumer and SME loans offers us a great opportunity to easily expand our operations and we are very satisfied with the analytical and professional approach of Fellow Finance in credit intermediation’ echoes Pedro Pinto Coelho, Executive Chairman of Banco BNI Europa.

Last week BNI Europe announced it will fund German SME loans through Funding Circle. According to Pedro Pinto Coelho, Executive Chairman of Banco BNI Europa, ‘an investment in German SME – the staple of European economic stability – is a highly attractive asset class. And Funding Circle is the professional partner that convinced us with their risk assessment and credit analysis. …’.

To date Banco BNI Europa has struck fourteen fintech partnerships with European fintech leaders across the continent. The bank had 141 per cent growth by the end of 2017 taking its total assets above €500m, and cited its focus on ‘innovative products’ as an explanation for the improved performance.

Breaking: Zopa will Launch a Bank

P2P lending marketplace Zopa, the first p2p lending platform, established in 2005, announced today that it will launch a bank in 2018, offering FSCS protected saving deposits. This will not replace the p2p lending product, which will continue to operate.

Zopa CEO Jaidev Jardana says “We launched in 2005 to create a richer life for everyone by making money simple and fair. We have lent over 1.8 billion GBP and inspired a 100 billion GBP global industry. We have built a profitable, scalable and viable business. Yet we’ve only just begun. We want to launch a next generation bank to drive greater choice for borrowers, savers and investors, which is good for consumers and good for the economy. We are uniquely placed to re-define customer expectations of what a bank should deliver in the 21st century. Over the last 11 years we have delivered great value to borrowers and investors whilst prudently managing credit risk. Combining our pioneering data and tech-led culture with an obsession with fairness and customer experience, we are best placed to shape the future of personal finance in the UK.”

An announcement sent via email to investors reads:

I wanted to write to you, on behalf of everyone at Zopa, to share some important news.

We launched Zopa in 2005 to create a richer life for everyone by making money simple and fair. Since then, we have lent over 1.8 billion GBP, inspired a 100 billion GBP global industry and helped our lenders earn over 75M GBP of interest. We have built a profitable, scalable and viable business. Yet we’ve only just begun.

We want to offer consumers even more choice, which is why, subject to regulatory approval, we are planning to launch a next generation bank to complement our existing peer-to-peer products.

We will continue to offer our peer-to-peer investment products.

Launching a bank, to sit alongside our existing peer-to-peer business, will allow us to create new and innovative savings and borrowing products. At launch, Zopa will offer FSCS protected deposit accounts to savers and overdraft alternatives to borrowers.

As an existing Zopa customer, we will give you the first opportunity to try out our new products. We will also actively welcome your input as we shape them.

The application process should take about 15-24 months, and we will keep you updated when we have news to share.

We believe we are uniquely placed to re-define what you should be able to expect from personal finance products in the 21st century.

Over the last 11 years, we have built an innovative, profitable and well-managed business. We have proven that we can deliver great value to borrowers and investors whilst prudently managing credit risk.

We know how to originate quality loans seamlessly online and meet our risk expectations. No new bank has that track record, and no incumbent bank has the digital expertise that we do.

We put our customers at the heart of all our decisions and obsess over how we can use technology to offer you simple, smart choices. We are looking forward to offering more products to even more people in the UK.

For now, thank you for investing through Zopa. I look forward to sharing this exciting journey towards the next generation banking we all deserve

Lendico and PostFinance Launch Joint Venture in Switzerland

PostFinance one of the largest five retail banking institutions in Switzerland will partner with Lendico to launch joint venture Lendico Schweiz, which will facilitate loans to SMEs in Switzerland.

From the last quarter of 2016 onwards, the company will facilitate crowdfunding for small and medium-sized enterprises (SMEs) in Switzerland. It is entering the market in close collaboration with PostFinance, a subsidiary of postal carrier Schweizerische Post.

Together the partners would like to establish a new form of SME financing in Switzerland. The aim of the joint venture is to provide the numerous Swiss SMEs with a modern alternative to traditional bank financing. The two partners are contributing their complementary expertise in customer contact and the entire lending and repayment process to the joint venture.

Sources say PostFinance was barred by regulation to directly lend to SMEs and had to find a third party partner to enter this market.

‘With 110 years of experience in Swiss banking services and around three million customers, we can think of no better partner than PostFinance for our entry into the Swiss market. As part of the continued expansion of an international credit marketplace, this joint venture represents a significant step in our business development,’ says Dr Dominik Steinkühler, co-founder and managing director of Lendico.

Hansruedi Köng, CEO of PostFinance, is delighted to be able to join forces with Lendico, a partner which has established itself and enjoyed success internationally in a rapidly expanding industry. ‘Our vision for this cooperation is to take crowdlending in Switzerland from niche status to the mass market. The combination of Lendico’s innovative capacity and our structures in Switzerland offers the best conditions for Lendico Schweiz AG to become a market leader in the future.’

Commerzbank will Launch P2P Lending Platform Main Funders Next Week

At a press conference this morning in Frankfurt, Michael Kotzbauer of Germany’s second largest bank Commerzbank and Birgit Storz of Main Incubator announced that the new platform Main Funders will launch next week. Main Funders is part of a broader digitalisation strategy of Commerzbank and the first project Commerzbank and Main Incubator built together. Main Incubator previously invested in several Fintech startups.

The aim of the new platform is to bring together SMEs seeking loans in the range of 200K to 10M Euro for up to 5 years and professional investors (institutional and large companies). Both will be already customers of Commerzbank and Commerzbank will make use of its regional sales force to bring borrowers onto the marketplace.

Kotzbauer explains strateg of Commerzbank with context Main FundersBorrowers will list their project n the platform, visible only to logged in investors, which in can browse the listings and select those that match their interests. Main Funders will assign credit grades to the loan requests and set the interest rate, taking into account that all loans will be unsecured. Since borrowers already have a credit history with Commerzbank, Storz says that the process, including the handling of the contracts, will take only a short time frame.

Main funders charges borrowers 0.45% of the loan amount multiplied with the duration and  investors 0.2%.

Unlike on other platforms investors won’t have to ‘park’ cash to be able to invest but rather will be able to pay for funded loans after all contracts have been signed, an advantage to avoid cash drag.

Once the loan is fully funded, the loan will be serviced by a third company (not Commerzbank or Main Funders).

Main Funders says it is uniquely positioned compared to other p2p lending marketplaces in that it is able to facilitate very large loans and benefits from the relationship and trust Commerbank already has to target customers.

With Main Funders Commerzbank aimes to:

  • increase customer satisfaction
  • strengthen its competitive position
  • react to rgulatory requirements
  • create a basis that will allow it to build further innovative loan products upon

Storz declined to give a figure on the expected loan volume in the first year, saying it is important to be able to react and adapt quickly in such an innovative product offering.

Some questions in the press conference targeted whether Commerzbank is cannibalizing the own products and if there is no conflict of interest in the decision of whether to finance a loan itself or put it on the platform.

Kotzbauer said that Commerzbank is reacting to the wish of some of their customer to diversify financing options. The decision of whether to finance the loan request themselves or put it on the platform is made after consulting with the borrower on his financing needs and wishes and not discriminating by credit grades or other parameters.

Main FundersCommerzbank is one of the first large banks in the world to have developed its own platform (together with its incubator). Other banks have taken the route to acquire lending startups (e.g. Barclay Africa Rainfin, Westpac with SocietyOne, or Banca Sella at Smava and Prestiamoci). Several banks are investing into consumer and SME loans on p2p lending marketplaces, especially in the US and the UK.

The initiative of Commerzbank is likely going to give a boost to awareness and credibility of p2p lending in Germany, even though it remains close to the conventional process with the restriction to existing customers and institutional investors. Continue reading