A story by American Banker highlights a potential legislation that will change how Americans pay for college; many people familiar with the Promoting Real Opportunity, Success and Prosperity through Education Reform Act believe it will benefit lenders and loan servicers. Source
Ally Bank, Goldman Sachs GS Bank and Sallie Mae Bank are all paying much higher rates for deposits which can put brick and mortar competitors in a tough spot; banks typically lag a bit when it comes to rates so their current loans can reprice and profits are not hit; though they could lose deposits if they wait to long to raise rates as customers will move to the better rate; Fitch Ratings released a report Wednesday showing online bank rates were 1.18 percent versus brick and mortar rates of 0.075 percent. Source.
Goldman Sachs head of commodities research, Jeff Currie, told Bloomberg TV that bitcoin is a commodity though with less liquidity than gold; he explains, “"It's a commodity. A security, by definition, has a liability attached to it. Take a dollar bill, it has a liability to the US government. Commodities do not have liabilities.”; similar to gold it is not backed by a government or a company but is significantly more volatile. Source.
Junheng Li, founder of an independent research firm focused on Chinese companies provides an update on lending in China with the recent news of tightening regulation. Source
The explosion in data has made the data scientist an essential part of all fintech companies. Source
Federal Reserve Bank of New York President William Dudley said the U.S. central bank is starting to think about adopting its own digital currency; while talks are in their infancy Mr. Dudley does see the value in the technology behind bitcoin; he doesn’t see bitcoin being a rival to the dollar as it is currently to unstable. Source.
Writing a guest post on FT Alphaville Victor Basta, the managing director of Magister Advisors talks bout the struggle digital banks face in making a profit; digital banks have certainly made a name for themselves and offer a better product to the consumer; rising customer acquisition costs and the tough scaling of affiliate agreements are just two of the reasons these banking startups will find it a challenge to reach profitability; the future looks like potential acquisition of digital banks for technology or merging with other fintechs to form a stronger conglomerate. Source.
China’s fintech market has been booming in recent years and now the industry has another concern regarding data privacy; Zhang Yi, chief executive of iiMedia Research, told the FT, “For the most part, these platforms aren’t selling data as their main business or they wouldn’t be able to survive. But employees who manage the data are the main source of data leaks.”; data is being sold on the black market and in most cases it comes from employees of the lender; most lenders say they sell data to third parties but the practice is opaque and not regulated very well. Source.
The fund expects to provide a dividend of 15p per quarter by the end of the second quarter of 2018; this would represent a yield of 7.8%; the fund shared that it had a pipeline of attractive yielding assets of £400m and will increase share buybacks. Source