Revolut to take on payday loans industry
Revolut is certainly not averse to enter new areas and has recently announced that it is launching a new reason why workers should get their salaries paid into a Revolut account by essentially providing clients with the ability to draw them down in advance of payday. So what’s the difference between that and a payday loan? One may well ask but I suppose there are arguments for and against. What is obviously attractive is that Salary Advance schemes are an unregulated sector of the market. I have an interest in this as some years ago I part owned and founded a cheque cashing company which my partner and I sold to an American competitor. I didn’t like the business as it seemed to me to encourage people to do things that they could not possibly afford. Salary advances do the same thing and there is of course no doubt that those punters that use the schemes will surely end up in a worse position that they would otherwise be in. The regulators know this but are reluctant to wade into a sector which might well be seen as disadvantaging poorer clients. The fact is that at the lower end of the market place there are sometimes legitimate reasons why loans should be made but certainly not in any case. For example the purchase or repair of a new boiler in the middle of winter is certainly legitimate. A pony on a runner in the 3.30 at Chepstow is not. These schemes do not differentiate and consequently will always produce unwanted outcomes. BTW Klarna and other buy now, pay later providers will find they have a large number of the same clients.
Lloyds Bank entering residential property rentals.
Interesting take by Matthew Lynn on Lloyds Bank Citra Living brand which has major ambitions in the property rental market. He points out the upsides, high demand, cash generated, a fragmented and largely unprofessional market, market size and a prodigious growth rate over the past decade. He is also upfront on the downsides diminishing demand from students, immigrants and a fairly dismal overall yield of around 3.6% with little chance of it rising. There are also political and regulatory risks of mainstream banks entering into a politically sensitive area any more than they are already through mainstream mortgage lending. And Lloyds are not the only one a lot of other large non financial groups are looking for other ways of making some money. Retail for example. One presumes that these people have done their sums properly but I can’t help feeling that banks should be involved as part of the process of ensuring leveraged finance should be available to proper businesses to finance production, trade, research etc. It seem they have lost the skill sets necessary to do this and are instead clutching at the increasingly difficult straws of becoming property companies or wealth managers. Wealth management in particular when you are managing money that other people have made at a much faster rate than the banks have.
UK Branch closures controversy heats up.
I could have chosen any number of articles to cite concerning this highly controversial strategy. In fact Ben Marlow writing in the Telegraph took a rather socialist position in the Daily Telegraph that those clients who are not tech savvy, the old etc should not be forgotten about. He is of course right but I fail to see why the government might intervene to get privately owned banks to subsidise loss making activities. If the government thinks this way then it should start paying the bill for it. It is not the traditional banks fault that interest rates are at virtually zero. Nor that money printing, QE, funny money or whatever you want to call it has essentially destroyed a key part of the way resources are allocated. Contrary to popular opinion RBS and other outfits did not have to be nationalised. Politicans failed everybody except the very rich in 2008 everybody else is still picking up the tab.
Howard Tolman is a well-known banker, technologist and entrepreneur in London,
We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.For context on Alt Lending please read the Interview with Howard Tolman about the future of Alt Lending and read articles tagged Alt Lending in our archives.
Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.
Revolut to tackle payday loans business
Revolut is actually not averse to enter new areas and has not too long ago introduced that it’s launching a brand new motive why employees ought to get their salaries paid right into a Revolut account by primarily offering shoppers with the flexibility to attract them down prematurely of payday. So what’s the distinction between that and a payday mortgage? One could properly ask however I suppose there are arguments for and towards. What is clearly enticing is that Wage Advance schemes are an unregulated sector of the market. I’ve an curiosity on this as some years in the past I half owned and based a cheque cashing firm which my accomplice and I offered to an American competitor. I didn’t just like the enterprise because it appeared to me to encourage individuals to do issues that they may not probably afford. Wage advances do the identical factor and there may be after all little question that these punters that use the schemes will certainly find yourself in a worse place that they might in any other case be in. The regulators know this however are reluctant to wade right into a sector which could properly be seen as disadvantaging poorer shoppers. The very fact is that on the decrease finish of the market place there are generally authentic the reason why loans ought to be made however actually not in any case. For instance the acquisition or restore of a brand new boiler in the midst of winter is actually authentic. A pony on a runner within the 3.30 at Chepstow just isn’t. These schemes don’t differentiate and consequently will at all times produce undesirable outcomes. BTW Klarna and different purchase now, pay later suppliers will discover they’ve numerous the identical shoppers.
Lloyds Financial institution coming into residential property leases.
Attention-grabbing take by Matthew Lynn on Lloyds Financial institution Citra Residing model which has main ambitions within the property rental market. He factors out the upsides, excessive demand, money generated, a fragmented and largely unprofessional market, market dimension and a prodigious development price over the previous decade. He’s additionally upfront on the downsides diminishing demand from college students, immigrants and a reasonably dismal general yield of round 3.6% with little probability of it rising. There are additionally political and regulatory dangers of mainstream banks coming into right into a politically delicate space any greater than they’re already by way of mainstream mortgage lending. And Lloyds usually are not the one one lots of different massive non monetary teams are searching for different methods of creating some cash. Retail for instance. One presumes that these individuals have accomplished their sums correctly however I can’t assist feeling that banks ought to be concerned as a part of the method of making certain leveraged finance ought to be obtainable to correct companies to finance manufacturing, commerce, analysis and many others. It appear they’ve misplaced the talent units vital to do that and are as a substitute clutching on the more and more troublesome straws of turning into property firms or wealth managers. Wealth administration specifically when you’re managing cash that different individuals have made at a a lot quicker price than the banks have.
UK Department closures controversy heats up.
I might have chosen any variety of articles to quote regarding this extremely controversial technique. In reality Ben Marlow writing within the Telegraph took a fairly socialist place within the Day by day Telegraph that these shoppers who usually are not tech savvy, the outdated and many others shouldn’t be forgotten about. He’s after all proper however I fail to spot why the federal government may intervene to get privately owned banks to subsidise loss making actions. If the federal government thinks this manner then it ought to begin paying the invoice for it. It’s not the standard banks fault that rates of interest are at just about zero. Nor that cash printing, QE, humorous cash or no matter you wish to name it has primarily destroyed a key a part of the best way sources are allotted. Opposite to in style opinion RBS and different outfits didn’t should be nationalised. Politicans failed all people besides the very wealthy in 2008 all people else continues to be selecting up the tab.
Howard Tolman is a widely known banker, technologist and entrepreneur in London,
Now we have a self imposed constraint of three information tales per week as a result of we serve busy senior Fintech leaders who simply need succinct and essential info.For context on Alt Lending please learn the Interview with Howard Tolman about the way forward for Alt Lending and skim articles tagged Alt Lending in our archives.
Day by day Fintech’s authentic perception is made obtainable to you for US$143 a yr (which equates to $2.75 per week). $2.75 buys you a espresso (perhaps), or the price of per week’s subscription to the worldwide Fintech weblog – caffeine for the thoughts that might be price $ hundreds of thousands.