Articles by Dan Orlando
BB&T has earmarked $50M for a deep dive into “emerging digital technology,” the company announced last week. The bank will look to either invest in, or acquire companies in the space.
“The sizable investment” is meant to improve the customer-experience for BB&T’s client base while simultaneously lowering operating costs.
“This sizable investment in financial technology companies represents an important strategic milestone in our digital business transformation,” said BB&T chairman and CEO Kelly S. King via release.
”We’re excited about the possibility of new partnerships and innovative approaches to provide the best possible experience for our clients.”
The bank began its focus on digital business in 2015 following the appointment of W. Bennett Bradley as chief digital officer.
“A significant investment in fintech puts BB&T on an aggressive pace to more quickly navigate our digital road map and further foster a culture of innovation throughout the company,” Bradley said in the same release.. “Things are changing rapidly and we, like many financial institutions, have to move faster to meet and exceed our clients’ expectations. While an investment in fintech is just one component of our digital transformation, it’s a powerful way for us to gain greater access to new technologies and talent.”
BB&T currently handles more than $220B in assets and a market capitalization of $37B.
Fundbox announced the launch of Fuse, a new credit-integration service, on Monday morning. Via Fuse, SaaS business providers can now access Fundbox from within their workflows with just three lines of code.
“For small business owners, the process of applying for financing continues to be an arduous and demotivating journey that for many, does not end well,” the company stated in a release. “Since 2008 when the economic bubble burst, most banks made their small business underwriting processes more stringent in an attempt to mitigate potential risks from defaults.”
According to the Biz2Credit Small Business Lending Index, in December 2017 only 25.3% of small business loan applicants are being approved for funding, leaving the other 74.4% struggling to find alternative avenues through which to pay vendors and stay afloat.
Thus, not only are small business owners hampered, but SaaS providers that cater to these budding enterprises take a blow as well.
Citing a 2016 survey developed by the SaaS growth marketing agency, Cobloom, the average SaaS provider serving small businesses faces between 5-7% customer churn on an annual basis. A significant factor for this volatility is strains on customer’s cash flow.
Fundbox believes that they can alleviate this situation by offering easy access to its lending products via the SaaS services themselves.
“For our SaaS partners, we intentionally created a solution that was easy to integrate, increases service value and customer stickiness with just a few lines of code,” said Sebastian Rymarz, chief business officer at Fundbox via statement. “And for small business owners, we’ve ‘democratized’ access to credit and the underwriting process right from within your favorite business app or platform.”
“We’re excited to partner with Fundbox and to add Fuse to our service,” said Ryan Jackson, founder and CEO of Paid, via release. “Anyone who works closely with small business owners knows that time and cash flow are their two most important assets. With Fundbox Fuse, our customers get the convenience of accessing credit without having to leave our workflow and we get the additional service value and retention stickiness.”
Those cherished-yet awkward-family moments you navigated this holiday may be responsible for Bitcoin’s recent rollercoaster ride.
While that may be painting with a bit of a broad brush, it does appear that that the post New Year’s dip that befell the cryptocurrency world was tied to a festive hype-bubble.
Between Thanksgiving and the December holidays cryptocurrency was a hot topic around the dinner table while people spent extended time with their families, John Omar, head of the Chain Operator blog and cryptocurrency trading course, told deBanked.
Omar explained that not only were those that were already schooled in the ways of crypto-trading discussing their financial gains over apple cider and stuffing, but family and friends who were previously unaware or unfamiliar with the likes of Bitcoin were having their interests piqued.
This spurred a rapid uptick in pricing on the way to to unprecedented gains in Bitcoin and other crypto counterparts.
“No, this is not the end of crypto,” Omar told deBanked. “This is far from the end. What we’re seeing is a price correction after 2 months of unprecedented growth. It’s not even a historic price correction. There have been more dramatic movements. There are a few reasons why the price is correcting at this time: potential regulation from Korea, China and France, and people who bought into cryptocurrencies after the holidays selling off to realize profits.”
Emerson Taymor, founding partner of the strategies firm Philosophie, agrees with Omar’s stance.
“Bitcoin and the market has seen much more significant drops in its past and always rebounded with a vengeance. It is a healthy correction, but far from the end,” he said.
Like Omar, Taymor also attributes the recent drop to “regulatory headwind” overseas.
While he believes that cryptocurrencies best days are not necessarily behind them, there will be losers on the path to determining a clear winner.
“Remember, cryptocurrency is much more than the “stock price,” Taymor said. “We are seeing a fundamental shift in how technology is going to be created. I believe we will have another big run up for the next 6-12 months and then we will have the real bubble bursting. Much like the Dot Com bubble, we will see people lose a lot of money and companies implode like Pets.com and Webvan, but we’ll also discover the next Amazon!”
Lisa Robins has been appointed as global head of transaction banking at Standard Chartered, the company announced on Wednesday.
A 38-year veteran of international business, Robins joins the Standard Chartered team from Deutsche Bank, where she had served since 2011. Before this tenure, she spent 23 years with JP Morgan Chase.
“For more than a century, Standard Chartered has been a leading trade bank supporting economic flows across Asia, Africa and the Middle East,” Simon Cooper, CEO, of corporate and institutional banking at the company said via release. “Transaction Banking is in our DNA and is integral to our future. As a banking veteran with deep experience running international transaction and commercial banking across complex markets, Lisa will ensure that the business goes from strength to strength as we deliver our network and innovative solutions to our clients.”
Robins also commented on her new role, stating that she was “excited” to get started as she has been an admirer of her new employer for some time.
“I have admired its many critical strengths like the Bank’s commitment to its global network, diverse talent, breadth of products and market leading platforms,” said the Stanford and Tufts graduate. “I am very much looking forward to leveraging my experience, built over many years across various growth markets, to see how we can further accelerate growth for the business and support the banks’ wide and deep base of clients to become an even stronger competitor in the industry.”
Robins was awarded ‘Transaction Banker of the Year Award’ by The Asset’s Triple A awards and also by The Asian Banker in 2013. In 2016, she was conferred the IBF Fellow award by the Institute of Banking and Finance Singapore which recognizes industry veterans who exemplify thought leadership and commitment to industry development.
The Consumer Financial Protection Bureau (CFPB) will be taking a closer look at the Payday Rule.
The legislation, which was finalized in October by former CFPB head Richard Cordray, mandates that lenders must certify that borrowers can afford a loan via background checks before issuing them. Also, the amount of loans to a single customer must be capped.
“January 16, 2018 is the effective date of the Bureau of Consumer Financial Protection’s final rule entitled ‘Payday, Vehicle Title, and Certain High-Cost Installment Loans’” a statement from the CFPB reads. “The Bureau intends to engage in a rulemaking process so that the Bureau may reconsider the Payday Rule.”
Yesterday, the Consumer Bankers Association (CBA) threw their support behind the decision to “reconsider” the restrictions.
“The CFPB’s decision to revisit its small-dollar rule is welcomed news for the millions of American consumers experiencing financial hardship and in need of small-dollar credit,” said CBA president & CEO Richard Hunt via statement.
“Under the current rule, many banks are forced to sit on the sidelines and prevented from offering affordable and popular small-dollar credit options to help meet the needs of their customers. As the CFPB reconsiders this rule, we encourage the Bureau to work with bank regulatory agencies to examine the use of bank offered small-dollar lending products, such as deposit advance products, and ensure any final rule treats all banks equally.”
Should no changes be levied against the Payday Rule, compliance is set to be enforced on August 19th of 2019.
This month, the Small Business 7(a) Lending Oversight and Reform Act of 2018 was put forth by a bipartisan team of lawmakers. If approved, the bill will increase the Small Business Administration’s (SBA) oversight authority over the 7(a) loan program, which aids small businesses and entrepreneurs as they set out to launch or grow their enterprises.
Via press release, the pending legislation was credited with “preserving” the 7(a) loan program by strengthening the SBA’s Office of Credit Risk Management by outlining in statute the responsibilities of the office and the requirements of its director, enhancing SBA’s lender oversight review process, including increasing the office’s enforcement options, requiring SBA to detail its oversight budget and perform a full risk analysis of the program annually and enhancing the organization’s “Credit Elsewhere” test.
“The 7(a) loan program has leveraged billions of dollars to help America’s small businesses thrive,” said Senate Small Business and Entrepreneurship Committee Chairman Jim Risch (R-ID) via the release. “By bolstering the SBA’s oversight office and providing the Administrator with flexibility to increase the program’s maximum lending authority in the event it would be reached, this bill will ensure the strength of the program into the future, guaranteeing that entrepreneurs will have access to the critical capital they need to build and grow their businesses.”
He continued, stating that the “bipartisan and bicameral support for this effort underscores just how important the 7(a) program, and the capital it provides, is to our nation’s small business owners.”
“The House Small Business Committee has a long tradition of working across the aisle to promote opportunity and job growth for America’s small businesses and, central to that effort, is ensuring entrepreneurs can access adequate capital to grow their operations,” said Congresswoman Nydia Velázquez (D-NY) in agreement.
“Since its inception, the 7(a) initiative has provided new and existing ventures with financing to grow and create jobs in local communities,” she added. “Under this legislation, SBA will have more tools to meet small businesses’ needs. I’m particularly pleased the bill includes provisions from my legislation allowing SBA to raise its 7(a) lending cap, so there’s no interruption in the flow of loans to small firms.”
Small business lending saw a 2017 surge, according to the U.S. Small Business Credit Monthly Report from PayNet, with 11 of 18 sectors experiencing a lending increase over the past 12 months.
Experts believe 2018 will continue to foster a friendly environment for smaller enterprises.
“A combination of small business optimism and favorable tax changes will likely spur increased demand for small business loans in 2018,” Gerri Detweiler, education director at Nav, tells deBanked. “This, combined with personal credit scores and business credit scores at all-time highs, means 2018 should be another record year for small business lending.”
Detweiler added that big banks have begun to fine tune their incorporation of alternative data sources into underwriting decisions. She believes that those who continue to do this well are on track for a “very good year” in 2018.
Head of marketing at Fundbox, Greg Powell, also believes in the strength of alternative data as a catalyst for small business growth due to more flexible vetting processes.
“Over 60% of small businesses are looking to make a capital investment in the year 2018,” he said. “On the supply side, you have a growing wealth of options that small businesses can choose from. That for me would be a cause for a lot of optimism of starting out a new business in the year 2018.”
“What we’re seeing is a fundamental shift in the way that businesses can be underwritten,” Powell continued,” adding that Fundbox and others like it are able to reach small businesses that no one else can.
Fundbox bypasses the need for a small business owner’s personal credit score or personal guarantee by putting more focus on factors such as the value of the borrower’s previous three months worth of transaction value and a flexible benchmark of $50K or more in annual revenues.
Lending standards such as this have led to a loan application climate that is “a lot more fluid than in the past,” according to Powell.
Proposed legislation would enable New Mexico to offer small loans to state employees that are paid back via deductions from their paychecks.
Put forth by Democratic state Senator Bill Tallman, the bill would put a 30 percent ceiling on interest rates for loans obtained via the program and limit repayment to 12 percent of gross salary or wages.
According to the Associated Press, Tallman says the bill is aimed at lowering debt burdens on state workers.
Should it pass, Tallman’s initiative would serve as another step for the state in its current battle against predatory lending tactics. As of this month, small lenders in New Mexico are held to a maximum of 175 percent interest on all loans finalized from January 1, onward.
Doug Farry, executive vice president of Employee Loan Solutions Inc., which deploys the employee lending service, True Connect, believes such a strategy can prove successful at the state level.
“It’s a benefit program,” said Farry while discussing the bill. “There’s no reason why it can’t work for a state government as well as a county or city.”
Aimed at empowering workers that face obstacles when applying for credit via traditional avenues, True Connect mainly serves private employers but has seen increased interest in the public sector. This includes government organizations such as Santa Fe Public Schools and others within the state of New Mexico.
At no cost to their participating employer and without submitting a credit score, workers can sign up for small loans via the company’s website.
Typically the funds are deposited with in one business day, and the loan is repaid over the course of 26 paychecks at a flat rate of 24.9% interest.
New Mexico’s decision regarding the practice is yet to be determined, but should the bill pass, the state may soon have followers.
Farry says that True Connect is currently in talks with multiple state governments about including a similar system in their benefits package.