As these platforms hit their first setbacks they have many questions to answer over their business models, underwriting competency and regulatory compliance.
Euromoney goes behind the headlines about marketplace lending to examine the robustness of online consumer lending, how securitization is becoming the funding mechanism of the industry and what the regulators might now do to quell the market's concerns over the growing pains of this industry.
Fintech: Laplanche looks to Upgrade marketplace lending
October 2017
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Ex-Lending Club chief poised to retry securitization; technique ‘essential’ to online lending business.
Year in data 2016: There are signs that the fintech boom is slowing
December 2016
Euromoney has reported at length on the growing pains of marketplace lenders, some of the biggest fintech companies to have emerged in the much larger US market, including several that have already floated publically and saw their share prices collapse last year.
Capital markets: Has Brexit killed CMU?
November 2016
Capital markets activity in Europe is dominated by the UK, so the Brexit vote could have dealt a mortal blow to the European Commission’s plans to promote it through the capital markets union initiative. To survive, CMU will have to get global.
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Macaskill on markets: SoFi's Cagney – The Donald Trump of fintech?
June 2016
Cheerleaders for marketplace lending took comfort from two events in late May that seemed to signal a potential recovery in a sector that had been rocked by the near failure of Lending Club, the leading listed specialist in online lending.
Freddie Mac losses may mean further bailouts
June 2016
Profit windfalls from GSEs evaporate; SoFi approved to become seller and servicer.
Securitization U-turn behind catastrophe at Lending Club
May 2016
Jefferies deal scuppered by loan date changes; Laplanche, Mack investors in Cirrix fund.
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Lending Club bombshell rocks marketplace lending
May 2016 Renaud Laplanche out and three senior managers either fired or resign after ‘violation of business practices’.
RateSetter calls for revolution
May 2016
Rhydian Lewis, co-founder of UK marketplace lender RateSetter, is calling for the death of banking as we know it, and visited the House of Commons in London in April as part of his campaign.
If risk retention was attached to the marketplace lenders, the business model would shift abruptly and prematurely select winners and losers not by the underwriting competencies but by their ability to attract low-cost sticky capital - Ram Ahluwalia
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Marketplace slowdown as investor skittishness takes hold
May 2016
As Prosper fires a quarter of its workforce, the gulf between legacy lenders and pure technology plays grows ever wider.
Marketplace lenders: Old hands in new market
May 2016
Many investors in marketplace lending have learned the hard way about volatility in sub-prime credit.
Fintech 2016: The fintech revolution gathers momentum
May 2016
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After a record year for fund raising, large fintech companies are now emerging in marketplace lending and payments, with many more newcomers deploying venture capital money raised in $25 million to $50 million chunks to transform capital markets and traditional banking mainstays such as mortgage lending. The fintech start-ups are building revolutionary applications for blockchain, attacking every specialist niche in the financial world and keeping the image of fintech clean with business ventures aimed at inclusion.
Fintech 2016: OnDeck seeks scale through international expansion
April 2016
Specialist small business lender grows fast; more banks seek to white label its offering.
Growing pains of marketplace lenders
April 2016
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The fintech darlings of online lending are becoming victims of their own success. Questions over loan performance and industry structure have put the young sector firmly in the regulators’ sights. What started out as a market known for its transparency is becoming increasingly complex, not least through the growing use of securitization and involvement of the biggest banks and asset managers. Marketplace lending needs to grow up fast.
Marketplace lenders: The law of agency
April 2016
WebBank of Salt Lake City, Utah; Cross River Bank of Teaneck, New Jersey; NBT Bank of Norwich, New York and Comenity Capital Bank of Columbus, Ohio: these are hardly household names. But their involvement with the new breed of online marketplace lenders has arguably been far more important than that of the likes of JPMorgan and Citi.
Marketplace lenders: Challengers target MPL connections
April 2016
In May 2015, UK upstart Metro Bank forged an alliance with marketplace lender Zopa, the first such tie up in this market and a potential blueprint for other UK challenger banks to take on the high-street incumbents.
KPMG and CB Insights reported last month that there are now 19 fintech unicorn companies of which 14 are providing payments or marketplace lending - Fintech revolution
Funding Circle to launch marketplace lending ABS in Europe
April 2016
Deutsche Bank mandated for Reg-S sterling deal.
Marketplace lending ABS: The next big short
March 2016
Marketplace lending ABS is following a worryingly familiar path.