About FinEX Asia
FinEX Asia is a new fintech asset management company with global reach. Our fintech solution makes it easy and efficient for Asian investors to finally tap into the U.S. consumer credit asset class.
FinEX Asia provides:
Our API solution allows us to simultaneously plug into multiple U.S. marketplace lender platforms to maximize diversification.
Our blockchain solution allows us to securely lock down the underlying consumer credit asset and to ensure data integrity and safety.
Risk and Tax Optimization.
We have a proprietary, machine learning-based risk model that allows us to pick the best quality consumer loans, which in turn reduces default risk. Our structure also optimizes tax withholding requirements for investors.
Transparency and Control.
All investments returns are monitored in real time, allowing for instantaneous reporting.
Fast & Efficient.
Our fintech solution ensures greater cost efficiency that allows us to share our savings with our investors and maximize returns.
FinEX Asia’s shareholders and management team mainly consist of senior professionals in the fields of FinTech, finance, and technology. Dianrong is a strategic technology partner.
Dianrong is FinEX Asia’s strategic technology partner. A leader in online marketplace lending in China, Dianrong originates US$500 million in monthly assets for 4 million retail lenders. Founded in 2012, Dianrong offers small and medium-sized enterprises and individuals a comprehensive, one-stop financial platform supported by industry-leading technology, compliance and transparency. The company’s sophisticated and flexible infrastructure enables it to design and customize lending and borrowing products and services, based on industry-specific data and insights, all supported by online risk-management and operation tools. Dianrong’s specific offerings include marketplace lending-related services and fintech solutions. The company was named in 2016 to the executive directorship of the National Internet Finance Association of China, led by the People’s Bank of China. Dianrong is headquartered in Shanghai. Click here to learn more about Dianrong.
FinEX Asia is the world’s first FinTech marketplace platform and asset management company that integrates blockchain with artificial intelligence technology. It connects Asian investors to US consumer credit and other high-quality and low-volatility assets. With its advanced FinTech infrastructure, FinEX Asia can provide risk modelling, blockchain-based data security systems, real-time performance monitoring and liquidity in the secondary market, allowing investors to make better investment decisions.
Fintech is the dynamic intersection between traditional finance and technology. It now includes a variety of technologies and applications:
Blockchain or distributed ledger technology stores information in a distributed and secure way across the Internet. The primary benefit is data security and the complete transparency of the data transacted within the system, which can never be changed or deleted.
Online lending platforms quickly and easily connect borrowers and lenders to expand attractive consumer lending options. Marketplace lenders use technology to facilitate and service the loans, but do not participate in the financial transaction itself.
Supply Chain Finance
Blockchain technology maps and manages large, complex supplies chains and bridges the financing gap for many smaller suppliers. These complicated supply chains are common in consumer electronics, automobile manufacturing and garment production.
Credit Factory 2.0
This is the risk management and credit evaluation framework that combines Big Data and traditional credit-evaluation processes through a powerful fintech quantitative system. This credit infrastructure reduces manual operations and ongoing risks.
FinEX Asia selects investment targets across cross-border online credit platforms. A cross-border and cross-platform system connection relies on mature blockchain technology.
Blockchain is a secure distributed ledger technology (DLT) that integrates new technologies in mathematics, cryptography and economic principles. Transactional data is scattered across each of the connected books. As no one can temper with the data, the information in the system remains correct and complete. This is an extremely important technology for ensuring the safety and authenticity of data in cross-border and cross-platform transactions. Since it ensures that the data cannot be tampered with, the authenticity is assured, thus it has higher security and transparency than traditional transactions. FinTech has made international investment more secure compared with the traditional ways, and has ensured better risk management.
Because blockchain does not require third-party verification procedures or reconciliation in the process of data maintenance (it usually operates in the back office), it helps significantly reduce cross-platform and cross-platform transaction costs, yet allowing for more transparent audit and supervision procedures. The cross-border FinTech trading platform provided by FinEX Asia also spares investors of the needs for direct investment review procedures, withholding of income tax, and other trivial matters.
AI models perform granular analysis using big data and complex computational engines. With the help of AI deep learning, FinEX Asia is able to classify asset quality more carefully, breaking through the existing framework to discover high-quality products that are not easily found by the traditional model, and identifying risks more thoroughly before reducing them.
Individuals or institutions who are qualified as professional/accredited investors recognised under all applicable laws and regulations governing securities dealings and investment activities in the corresponding jurisdiction(s). The definition of professional/accredited investor varies from country to country. Please see below for examples from Hong Kong and Singapore.
Professional / Institutional / Accredited Investors
In Hong Kong, professional investors (Professional Investors) are divided into three categories:
In Singapore, the two types of investors below are considered as professional investors:
Marketplace lending is the application of advanced technology platforms to bring online borrowers and lenders together to make lending fast, flexible and affordable.
Borrowers benefit from:
Banks typically raise capital through banking deposits and then lend at much higher rates to borrowers. This is driven in part by the banks’ high cost structure, including branch networks, higher capital reserve requirements and a reliance on manual processing.
Alternatively, marketplace lending relies on advanced technology platforms to bring online borrowers and lenders together to make lending fast, flexible and affordable. Fintech significantly lowers operating costs, often 50% less than traditional banks, which benefits borrowers and lenders.
FICO, originally Fair, Isaac and Company, is a data analytics company based in San Jose, California focused on credit rating services. Since 1956, the U.S. consumer credit market has trusted FICO scores to rate the creditworthiness of individual borrowers.
According to FICO’s score standards, the three major credit bureaus – Equifax, Experian, and TransUnion – produce credit reports for every individual using a massive number of consumer credit records. The reports correspond to different FICO scores.
Much like individual debt instruments, potential borrowers are assigned a score from 250 to 900. The higher the score, the lower the risk of default and the greater chance of on-time payments.
FICO is vital for the U.S. consumer. Maintaining a high credit score means easier access to securing a car loan, purchasing a home or even paying for groceries. Low FICO scores dramatically limit access to credit. So, when it comes to rating consumer credit, FICO matters most.
What your FICO Score means to lenders:
Much like individual debt instruments rated by S&P or Moody’s, potential U.S. borrowers are evaluated and assigned a FICO score from 250 to 900. The higher the score, the lower the risk of default and the greater chance of on-time payments. Marketplace assets are sourced from borrowers with very strong FICO scores.
U.S. consumer credit scores are getting better. This can be seen from FICO credit scores. In a 12-year period from 2005 to 2017, the FICO average score has rose from 688 points in 2005 to 700 points in 2017. In October 2009 it was once dropped to a low of 686 due to the financial tsunami, but it did not drop further.
U.S. Consumer Credit
Consumer credit is a superior, but often overlooked, asset class for many investors. Importantly, consumer credit is resilient to market movements and enjoys a high-yield, fixed income return that outperforms other asset classes over time. It is also a short tenor asset class that allows flexibility.
Consumer credit is everywhere today, but typically, the U.S. market enjoys the strongest consumer-credit ecosystem:
Though U.S. consumer credit is an attractive asset class, several access hurdles remain for Asian investors:
Intimidating Onboarding process
Investors wanting to invest in U.S. consumer credit must onboard themselves with the marketplace lenders and each platform’s onboarding requirements are different. Onboarding processes such as Know-Your-Customer (KYC)/ Anti-Money Laundering (AML), as well other due diligence can be time consuming and costly
Risk of Platform Concentration
Due to the onerous onboarding process, a typical investor will likely only onboard with one or two marketplace lenders. That works against asset diversification.
U.S. withholding tax issue
If a non-U.S. investor invests directly into consumer credit assets, the investment returns may incur significant U.S. withholding tax, which limits the attractiveness of this asset class. Additionally, unfamiliarity with the U.S. market or the underlying product, coupled with language barriers, are other potential problems.
Many natural disasters (such as forest fires, hurricanes and snowstorms) are related to the local geography and climate and occur almost every year. As a result, the current rate of bad debt covers almost all the natural disasters that have occurred, which gives a default rate of about 3%.