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Fasanara Bi-Weekly Digest



American Fintech Gone, Women Peak in Banks and Appetite Accounts

Happy Tuesday!

In This Edition:

  • Three banks in America have gone bust within the past month

  • New Open Banking-powered credit assessment product launches

  • FinTech credit: Online lending platforms in Sweden and beyond

  • BrickVest Limited served with court order over “materially inaccurate” accounts

  • Have we reached “peak fintech”?

  • Women have greater appetite for alternative finance than men.


Three banks in America have gone bust within the past month

Three banks in America have collapsed over the past month, bringing the total number of failures this year to four. In a country with some 4,700 federally insured lenders, that is a small number. But given that the total last year was zero, the trend is worth watching. Many banks are struggling in an era of low interest rates and hot competition. The more margins stay low, the more likely banks are to move into unsuitable areas to boost them. Many companies are already carrying more debt than they can handle, while households are showing signs of strain, too. The latest survey carried out by the New York Federal Reserve, released last week, showed record-high consumer loan balances and worsening delinquency trends in car loans, student loans and mortgages.

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New Open Banking-powered credit assessment product launches

A new Open Banking-powered solution to assess creditworthiness has been launched by Credit bureau fintechs ClearScore and Credit Kudos. It uses the data-sharing initiative Open Banking, which mandates high street banks to share anonymized customer data with approved third parties, to give lenders access to more up-to-date information than was previously available to them such as real-time income and expenditure and also an indication of future liquidity. This may open up the credit market to thousands of underserved users who have previously been rejected. Lenders will also be able to re-evaluate their portfolios to create more personalised product offerings. The use of Open Banking data is the start of an important and positive change in the lending sector.

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FinTech credit: Online lending platforms in Sweden and beyond

New digital technologies in banking and finance, commonly referred to as ‘FinTech,’ have the potential to transform established banking business models. This article studies online lending platforms, which are new players in the financial sector that allow individuals or firms to obtain loans directly from investors via the internet. To date, online lending is still small relative to total bank lending. However, online lending has expanded rapidly not only in China, the US and the UK, but also in Sweden. In 2018 Swedish platforms originated more than SEK 2bn of new loans – exceeding the 2017 volume by 51 per cent. The authors discuss how online lending platforms differ from commercial banks and how they are regulated. Moreover, they analyse market developments, such as the growing linkages between platforms and the banking sector. Against this backdrop, they review potential financial stability implications that may appear if online lending continues to grow in importance.

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BrickVest Limited served with court order over “materially inaccurate” accounts

Four subsidiaries of BrickVest, the fintech which offers investment opportunities in commercial properties, have gone into administration. The administrator, ReSolve, said it was looking for possible suitors to buy the four subsidiaries. One of the subsidiaries that has fallen under administration was issued with a High Court order, saying it had filed accounts that were "materially inaccurate".  The order comes as filings at Companies House also reveal that BrickVest founder Thomas Schneider stood down as a director of BrickVest Limited on October 30 and that another BrickVest Limited director Matthias Arnheiter quit on October 5. BrickVest has other businesses including BrickVest IM and BrickVest Markets, which continue to trade. The BrickVest website is also still live and investors can register on the platform. No details for the reason why the subsidiaries have fallen into administration were given.

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Have we reached “peak fintech”?